Demand for insurance when purchasing electronics has increased
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In less than nine months of electronics sales, demand for insurance in retail chains has increased by 10–22% year on year. According to market participants, the trend is associated with a drop in consumer demand and an increase in credit rates, which is why retailers and banks are more actively selling additional services. Citizens also more often take out insurance for equipment from outdated brands due to the lack of authorized service centers, warranty problems and fears of theft, experts say.
The number of additional service and insurance programs sold in Inventive Retail Group stores (restore:, Samsung, Xiaomi) increased by 10% in the three quarters of 2023 compared to the same period last year, the company told Kommersant. “Last year, the peak purchase of such programs occurred in the fourth quarter. Now we see uniform demand across quarters and expect growth by the end of the year,” said PR Director of Inventive Retail Group Lyudmila Semushina.
The M.Video-Eldorado network also increased the number of issued insurance policies for electronics. According to the retailer, in less than nine months of sales it increased by 12% year-on-year: “Most often our customers insure smartphones, TVs, built-in appliances, washing machines and refrigerators.”
At MTS, in less than a year, the number of applications submitted for insurance of gadgets increased by 22% year-on-year, the network clarified. “Most often smartphones are insured. For example, we note the highest increase in the price segment from 110 thousand to 140 thousand rubles, the number of insurance applications for such devices increased by 414%,” they reported. The cost of comprehensive service insurance is about 10–18% of the cost of the gadget and includes an extension of the factory warranty for an additional year, replacement of the display, as well as risks from fire, theft, exposure to electric current, mechanical damage as a result of an accident, natural disasters, etc., they specified. in company.
One of the top managers of a large chain of electronics stores told Kommersant that sales of additional services are growing due to low demand for electronics from customers. This forces retailers to actively sell additional services. “Also, due to the increase in lending rates and a decrease in the number of issued loans, the banks themselves are interested in obtaining insurance,” he added, explaining that previously they mainly insured electronics that were purchased on credit or in installments.
Also in Russia, the demand for the services of private repairmen for household appliances and electronics is growing (see Kommersant on September 22). Experts suggest that in this way citizens are trying to extend the life of electronics from well-known brands.
The founder of Smart Solutions and former top manager of Vestel, Huseyn Imanov, agrees that the popularity of insurance is associated with a decrease in demand for electronics and the desire of retailers to increase margins. Also, according to him, buyers more often take out insurance for equipment from new Chinese and Turkish brands – “the consumer is not yet accustomed to new names on the market, therefore, due to distrust in the quality of equipment, Russians prefer to insure themselves.”
The increase in demand for insurance is also associated with the lack of authorized service centers of departed vendors, says TelecomDaily CEO Denis Kuskov. “Consumers are afraid of both poor-quality repairs of expensive gadgets and increased risks of theft, so taking out additional insurance seems logical,” he says. The expert believes that the demand for insurance will continue to grow mainly in relation to defunct brands.
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