Gadget insurance policies in the UK increased from 7.87 million in 2023 to 8.46 million in 2024, representing annual growth of 7.5%, according to analysis of Financial Conduct Authority data by independent insurance consultancy Broadstone.
Premium income rose from £496 million in 2023 to £604 million in 2024, marking a 22% increase over the same period.
The analysis revealed that nearly two-thirds of policies were sold as stand-alone cover rather than as add-on products. The distribution between add-on and stand-alone sales showed some variation, with no clear trend emerging in recent years.
Payout ratios remained relatively stable, with add-on policies maintaining a 41.8% payout ratio. Stand-alone products saw their payout ratio decrease from 59.3% in 2023 to 42.9% in 2024.
Claims frequency declined across both product types between 2022 and 2024. Add-on policies experienced a drop from 12.8% to 7.8%, while stand-alone policies fell from 10.4% to 7.8%. Individual claim payouts increased during this period, likely reflecting higher device values and changing claims patterns.
“While some niche insurance products struggle to justify their value, gadget insurance is thriving,” said Cormac Bradley, senior actuarial director at Broadstone. “It is delivering consistent consumer benefit and adapting to market realities.”
Bradley noted that the product line appears to engage younger consumers while maintaining fair value metrics.
“Driven by the rising importance – and cost – of devices in people’s everyday lives, consumer demand is strong and becoming an essential product,” Bradley said. “It’s one of the few product lines that appears to be engaging younger consumers while maintaining fair value metrics.”
The analysis suggested that the product category likely attracts a higher proportion of policyholders under 40, given the central role smartphones and mobile devices play in younger consumers’ lives.
Bradley highlighted that the growth represents a significant opportunity for insurers, supported by a stable regulatory outlook. He cautioned that insurers must remain aware of shifting trends to support further expansion.
“For example, tech inflation and evolving risk profiles which may necessitate dynamic pricing,” Bradley said.
The 22% premium growth in 2024 indicated that insurers were restoring margins after years of constrained profitability, the report noted. The combination of lower claim frequency and higher individual payouts suggested consumers were willing to pay for comprehensive cover as devices became more expensive and essential for work and leisure activities.
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