UK Extended Warranty Market Research, 2032
The UK Extended Warranty market size was valued at $ 3.54 billion in 2022, and is projected to reach $ 8.93 billion by 2032, growing at a CAGR of 9.9% from 2023 to 2032.
Extended warranty, also known as a service agreement, service contract, or maintenance agreement, refers to a policy that extends the warranty period of consumer durable goods beyond what is provided by manufacturers to consumers on the purchase of new items. If the damage is caused by manufacturing faults or low quality, it often covers the expenses of repair or replacement of the product. Extended warranty is generally provided for automobiles and electronic & electrical appliances, and is usually offered by the manufacturer, retailer, or third-party service provider. Increased awareness of extended warranty policies among consumers has led to the development of extended warranties in the insurance market. The rise in extended warranty usage is driven by the need to protect expensive items against unexpected repairs or replacements of parts. As more individuals invest in electronic devices and appliances, the demand for extended warranty services grows, contributing to the expansion of the market for extended warranties.
Key Takeaways
- By coverage, the Accidental Protection Plan segment held the largest share in the Extended Warranty market for 2023.
- By distribution channel, the retailers held the largest share in the supply chain management market for 2023.
- By Application, the home appliances segment is expected to show the fastest market growth during the forecast period.
- By end users, the Business segment is expected to show the fastest market growth during the forecast period.
- By Sales type, point of sale held the largest share in the Global Extended Warranty market for 2023.
In addition, the extended warranty market is expected to witness notable growth owing to a surge in awareness for extended warranties, a rise in penetration of laptops, smartphones, and tablets, and rising product complexities. Moreover, the expansion of products and services and the untapped potential of emerging economies are expected to provide lucrative opportunities for the growth of the market during the forecast period. On the contrary, the decline in sales of PCs limits the growth of the extended warranty market.
Segment Review
The UK extended warranty market is segmented based on coverage, distribution channel, application, end-users, sales type, and region. By coverage, the market is bifurcated into standard protection plan and accidental protection plan. By distribution channel, the market is segregated into manufacturers, retailers, and others. By application, the market is divided into automobiles, consumer electronics, home appliances, mobile devices and PCs, and others. By end user, the market is divided into individuals and business. By sales type, the market is divided into point of sale and after sale.
By Distribution Channel
Manufacturer segment is projected as one of the most lucrative segments.
The key players profiled in the extended warranty market analysis are Assurant, Inc., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield, LLC, Endurance Warranty Services, LLC, Edel Assurance, and SquareTrade, Inc. These players have adopted various strategies, including partnership, collaboration, product launch, and developments to increase their market penetration and strengthen their position in the industry.
On the basis of coverage, the standard protection plan dominated the extended warranty market size in 2022, owing to the fact that a standard protection plan provides coverage for an additional two to three years of coverage against product failure. Furthermore, these extended warranty plans are mainly suitable for consumers looking for an uncomplicated usage experience and longer life for their devices. However, accidental protection plan is expected to witness the fastest growth, owing to an increase in accidental damages to consumer durable goods, along with the rise in the availability of affordable accidental plans
By Coverage
Standard Protection Plan segment is projected as one of the most lucrative segments.
Competitive Analysis
Competitive analysis and profiles of the major players in the extended warranty industry include Assurant, Inc., American International Group, Inc., AXA, AmTrust Financial, Asurion, CARCHEX, CarShield, LLC, Endurance Warranty Services, LLC, Edel Assurance, and SquareTrade, Inc. Major players have adopted product launch, partnership, collaborations, and acquisition as key developmental strategies to improve the product portfolio and gain strong foothold in the extended warranty industry.
On October 2023, Shippo collaborated with Cover Genius to introduce an insurance solution for eCommerce merchants and ensure a positive shipping experience for their customers.
Top Impacting Factors
Surge in awareness for extended warranty
Extended warranty provides customers with an additional layer of protection against unexpected repair costs that may arise from product defects or accidental damage. This is likely to boost the awareness for extended warranties. In addition, consumers are often concerned about the safety of their products and services post-expiry of seller’s warranty, which creates the need for insurance/warranty claim. Thus, coverage for extended warranties has surged among individuals and businesses, which is expected to drive the market growth. An increasing demand for insurance against unanticipated product failures, the incorporation of cutting-edge technologies like blockchain to improve operations, and the growing public awareness of extended warranties are the factors propelling the market for extended warranties. Furthermore, the market for extended warranties is expanding due to the growing popularity of smartphones, laptops, household appliances, and other related devices. These products highlight the benefit of extended warranty services in giving customers peace of mind and additional value. Numerous products have a high price tag at the time of purchase, hence awareness for extended warranty for those products has increased tremendously.
According to a survey conducted by AmTrust, 51% of the respondents are aware of the extended warranty contracts. In addition, consumers are often concerned about the safety of their electronic products post expiry of seller’s warranty, which increases the coverage for extended warranty among the consumer electronics & mobile devices segment. Moreover, providing an extended warranty helps in building customer loyalty. Thus, rise in awareness for extended warranty propels the market growth. As consumers become more informed about the benefits of extended warranty plans, they are increasingly recognizing the value of protecting their investments against unexpected breakdowns and repair costs. This heightened awareness drives the demand for extended warranties, especially in industries like automobiles and consumer electronics, where products are prone to technical issues and malfunctions. Ultimately, the combination of technological advancements, customer loyalty initiatives, and increased awareness collectively propels the growth of the extended warranty market, creating a win-win situation for both consumers and providers.
Rise in penetration of laptops, smartphones, and tablets
The increased penetration of laptops, smartphones, and tablets, coupled with the increased adoption of extended warranty plans, has notably transformed the consumer electronics industry. Nowadays, smart phones and gadgets have become an internal part of every individual’s life, which is creating a need to protect these devices against damage and extending the lifetime value. Furthermore, consumers are more inclined to invest in extended warranty plans to ensure uninterrupted usage and to minimize potential disruptions caused by unexpected hardware or software issues.
Therefore, provision of extended warranty for these goods has fostered market competition, which in turn drives the market growth. Moreover, the rise in prices of raw materials continues to imply pressure on profit margins of manufacturers and retailers of consumer electronic products. This has induced the manufacturers and consumers to opt for warranty plans to protect their valuable assets and ensure a seamless user experience.
Furthermore, extended warranty solutions for electronic items are continuously evolving and are expected to maintain their dominance during the forecast period. Thus, continuous rise in use and adoption of laptops, smartphones, tablets, and other brown goods fuel the growth of extended warranty in the market, as consumers continue to prioritize the longevity and reliability of their devices.
The rise in the penetration of laptops, smartphones, and tablets has been a key driver of growth in the extended warranty market. Consumers value the protection and peace of mind that extended warranties offer for their electronic devices, making these plans an essential consideration when investing in high-tech products. The increasing ownership of these devices, coupled with the complexity of modern technology, highlights the significance of extended warranty services in meeting the evolving needs of consumers in the digital age.
Key Benefits for Stakeholders
- The study provides an in-depth analysis of the global Extended Warranty Market forecast along with current & future trends to explain the imminent investment pockets.
- Information about key drivers, restraints, & opportunities and their impact analysis on global confidential computing trends is provided in the report.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
- The quantitative analysis of the market from 2022 to 2031 is provided to determine the market potential.
UK Extended Warranty Market Report Highlights
| Aspects | Details |
 By Coverage |
|
 By Distribution Channel |
|
 By Application |
|
 By End-Users |
|
 By Sales Type |
|
 Key Market Players | Endurance Warranty Services, LLC, SquareTrade, Inc., Asurion, AmTrust Financial, CarShield, LLC, Assurant, Inc., CARCHEX, Edel Assurance, AXA, American International Group, Inc. |
Analyst Review
In accordance with several interviews conducted of the top level CXOs executives, the adoption of extended warranty has increased in last few years, due to the growing number of extended warranty providers that help consumers to acquire long-term product security. In addition, the proliferation of complex and expensive consumer electronics and appliances has increased the utility for extended warranty protection, which is expected to drive the growth of the market.
In addition to this, the supply side of the extended warranty market is driven by the expansion of e-commerce. The ease of online price comparison has compressed retail margins, creating a need for online and brick-and-mortar merchants to augment revenue and boost profitability by selling extended warranties.
Moreover, key players in the extended warranty market such as AmTrust Financial, Assurant, and AXA, account for a significant share of the market, followed by some other top vendors in the local and regional markets. With larger requirements for warranty services, companies introduced various strategies to strengthen their market position capabilities. For instance, in October 2023, Assurant partnered with Hyundai Motor UK to provide a five-year extended warranty for all eligible used car purchases. The five year Hyundai Promise warranty proposition is available for all vehicle types, covering petrol, diesel, hybrid and electric vehicles, with the latter featuring Assurant’s EV One warranty programme, which launched in the UK market in 2020. Such strategic initiatives by the market players are expected to contribute to significant growth of the extended warranty market across the globe.
Moreover, market players have expanded their business operations and geographical footprint by making strategic collaboration and partnerships. For instance, in April 2024, Cupra UK has launched a five-year extended warranty across its model range. The warranty covers 90,000 miles or five years, and includes the upcoming CUPRA Born VZ. The warranty covers the repair or replacement of defective parts, as well as additional coverage for the vehicle's battery.
For instance, in January 2024, Carplus, a leading car financing brokerage service launched their Extended Warranty program to provide comprehensive coverage, securing the clients investment beyond the limitations of manufacturer warranties. These strategic advancements propel the growth of the extended warranty market.
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