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TABLE OF CONTENTS:
0.0 EXECUTIVE SUMMARY 2
The market across ten European countries was worth approximately €2.18 billion in 2007'2
within which warranties and insurance linked to brown goods account for the lion’s share'3
'with this segment also likely to have been the most rapidly growing between 2003 and 2007 3
Extended warranty schemes operated by manufacturer brands are most widespread in the UK 3
Retailer warranty programs often incorporate protection in the event of accidental damage'4
'and are more likely to be run in conjunction with an external insurance company or broker 4
A number of factors will assist continuing growth in the warranty and insurance market'4
'including the launch of new schemes, improved cross-selling and product innovation 5
The dynamics of the warranty and insurance market are complicated by a range of factors'5
'including the growing use of the Internet as a sales channel for white and brown goods 5
Use of remote distribution interfaces and alternative marketing approaches could also grow 6
1.0 INTRODUCTION 8
Rationale 8
Most published data focuses disproportionately on the underlying consumer product markets'8
'ignoring the fact that manufacturers and retailers can make large profits from warranties 8
Warranties and insurance linked to mobile devices are covered in separate research publications 8
Evolving distribution channels both favour and compromise extended warranty provision 8
Finaccord 8
PartnerBASE™ 10
Methodology 10
The survey extends to 820 manufacturers and retailers of non-mobile consumer products 10
Definitions 12
Warranty and insurance products for non-mobile consumer goods come in a variety of formats'12
'and are frequently marketed to consumers under alternative titles 12
2.0 EUROPEAN OVERVIEW 15
Introduction 15
Underlying market data 16
White goods 16
The market for white goods is mature and slow-growing in most European territories 16
Households in Belgium make the highest annual average expenditure on white goods 18
Brown goods 20
The popularity of LCD and plasma televisions boosts the European market for brown goods 20
On average, households in the Czech Republic commit the least expenditure to brown goods 22
Furniture 24
With a value of €27 billion in 2007, Germany is by far Europe’s largest market for furniture'24
'with average expenditure per household more than eight times that of neighbouring Poland 27
Manufacturer extended warranty programs for white and brown goods 29
Manufacturer warranty schemes are most widespread in Belgium, Italy, Spain and the UK'29
'although it is only in the UK that protection ever includes cover for accidental damage 30
Most manufacturer brands adhere primarily to a captive model for extended warranty programs 31
Retailer extended warranty programs for white and brown goods 33
Retailers in France are most likely to have developed their own extended warranty schemes 33
In five countries, at least a half of retailer programs incorporate cover for accidental damage 34
Retailers adhere to a broad range of operating models for their extended warranty programs 35
Retailer extended warranty programs for furniture 37
Extended protection programs for furniture exist in five out of the ten countries'37
'and are always organised by means of one of two operating models 38
Market size for warranties for white goods, brown goods and furniture 40
Overview 40
Across ten European countries, the total market size is worth in excess of €2.18 billion 40
White goods 41
Much of the value of the market for warranties for white goods is due to France and the UK'41
'and four out of the ten countries stand out as having relatively developed markets in this area 42
Brown goods 43
There is apparent scope for extended warranties linked to brown goods to develop in future'43
'especially in markets such as the Czech Republic, Italy, Poland and Spain 44
Furniture 45
Extended warranties linked to furniture add up to a much smaller market at present'45
'as a consequence of several factors which limit its potential to develop 46
Growth rates 47
In general, markets for warranties linked to brown goods have been growing most rapidly 47
3.0 BELGIUM 50
Introduction 50
Research scope 50
Underlying market data 51
Growth in sales of white and brown goods outstrips growth in sales of furniture in Belgium 51
Survey results - white and brown goods 54
Manufacturer extended warranty schemes 54
Over a half of major manufacturer brands in Belgium possess an extended warranty scheme 54
Retailer extended warranty schemes 55
Several major Belgian retailers operate extended warranty schemes through external partners'55
'with CAPProtection identifiable as a prominent indigenous protagonist 55
Survey results - furniture 57
Retailer extended warranty schemes 57
Extended protection programs for furniture have been introduced to the Belgian market 57
Survey results - average prices 58
On average, extended warranties in Belgium are slightly less expensive than in the UK 58
Market size 59
Belgium hosts the sixth largest market for warranties linked to non-mobile products in Europe 59
4.0 CZECH REPUBLIC 61
Introduction 61
Research scope 61
Underlying market data 62
Sales per household of brown goods are low in comparison to those for white goods and furniture 62
Survey results - white and brown goods 65
Manufacturer extended warranty schemes 65
Several manufacturers offer free warranty extensions as a part of promotional packages 65
Retailer extended warranty schemes 66
Thus far, two major retail chains have introduced extended warranties to the Czech Republic 66
Survey results - average prices 67
On average, extended warranties in the Czech Republic are significantly cheaper than in the UK 67
Market size 68
The Czech market for extended warranties remains at a very early stage of development 68
50 FRANCE 71
Introduction 71
Research scope 71
Underlying market data 72
Sales of brown goods comfortably outgrow sales of white goods and furniture in France 72
Survey results - white and brown goods 75
Manufacturer extended warranty schemes 75
The majority of manufacturers operating warranty schemes do so on a purely internal basis 75
Retailer extended warranty schemes 76
Major French retailers utilise a variety of operating models when organising extended warranties 76
SFG states that it is growing its business at an average rate of growth per annum of around 20% 76
SPB and Finaref have introduced innovative new guarantees to the French warranty market 76
Survey results - furniture 78
Retailer extended warranty schemes 78
Where offered, extended guarantees are usually offered at no extra charge to customers 78
Survey results - average prices 80
On average, extended warranties in France are slightly less expensive than in the UK 80
Market size 81
Extended warranties sold in conjunction with brown goods take the largest slice of the market 81
6.0 GERMANY 83
Introduction 83
Research scope 83
Underlying market data 84
Sales of white goods, brown goods and furniture achieve virtually no real growth in Germany 84
Survey results - white and brown goods 87
Manufacturer extended warranty schemes 87
Only Domestic & General and Wertgarantie have established manufacturer relationships 87
Retailer extended warranty schemes 89
Around a half of Germany’s major retailers of white and brown goods operate warranty schemes 89
KarstadtQuelle Versicherung is active in the market on behalf of three KarstadtQuelle brands 89
Survey results - average prices 91
On average, extended warranties in Germany are a great deal cheaper than in the UK 91
Market size 92
The German warranty market size splits more or less evenly between white and brown goods 92
7.0 ITALY 94
Introduction 94
Research scope 94
Underlying market data 95
Consumer expenditure on white goods, brown goods and furniture reaches €22.34 billion in 2007 95
Survey results - white and brown goods 98
Manufacturer extended warranty schemes 98
Almost a half of manufacturer brands surveyed in Italy operate extended warranty schemes 98
Retailer extended warranty schemes 99
Italy’s market for extended warranties has experienced substantial development in recent years 99
Estendo, which was founded in 2004, has clearly been an important protagonist in this respect 99
Survey results - furniture 101
Retailer extended warranty schemes 101
Extended protection programs for furniture appear to be rare in the Italian market 101
Survey results - average prices 102
On average, extended warranties in Italy are significantly less expensive than in the UK 102
Market size 103
The value of the extended warranty market is likely to have developed rapidly in recent years 103
8.0 NETHERLANDS 105
Introduction 105
Research scope 105
Underlying market data 106
Sales of white goods, brown goods and furniture were valued at around €7.33 billion in 2007 106
Survey results - white and brown goods 109
Manufacturer extended warranty schemes 109
The majority of manufacturers operating warranty schemes do so on a purely internal basis 109
Retailer extended warranty schemes 111
Actua Assurantiën has established a position of dominance in the extended warranty market 111
Survey results - furniture 113
Retailer extended warranty schemes 113
Several major furniture retailers in the Netherlands offer furniture protection programs 113
Survey results - average prices 114
On average, extended warranties in the Netherlands are slightly less costly than in the UK 114
Market size 115
The Dutch market size is the fourth largest among the ten territories covered by the investigation 115
9.0 POLAND 117
Introduction 117
Research scope 117
Underlying market data 118
Sales of white goods in Poland surge ahead at an average rate per annum of 26.5% 118
Survey results - white and brown goods 121
Manufacturer extended warranty schemes 121
Free warranty extensions are offered by several manufacturers as a part of periodic promotions 121
Retailer extended warranty schemes 122
Several major Polish retailers of electronic goods have launched extended warranty schemes 122
Survey results - average prices 123
On average, extended warranties in Poland are significantly cheaper than in the UK 123
Market size 124
Poland’s market for extended warranties is developing from a comparatively low base 124
10.0 SPAIN 127
Introduction 127
Research scope 127
Underlying market data 128
The Spanish market for white goods, brown goods and furniture reaches €13.62 billion in 2007 128
Survey results - white and brown goods 131
Manufacturer extended warranty schemes 131
Over a half of the 35 manufacturers surveyed in Spain operate extended warranty programs 131
Retailer extended warranty schemes 133
Several providers are attempting to develop Spain’s extended warranty market 133
Survey results - average prices 135
On average, extended warranties in Spain are substantially cheaper than in the UK 135
Market size 136
Insurance and warranties linked to white goods account for around 60% of Spain’s market value 136
11.0 SWEDEN 138
Introduction 138
Research scope 138
Underlying market data 139
The markets for white and brown goods record average annual growth in upper single digits 139
Survey results - white and brown goods 142
Manufacturer extended warranty schemes 142
Just two manufacturers of white or brown goods possess their own extended warranty schemes 142
Retailer extended warranty schemes 144
Sweden’s larger retailers of brown and white goods operate schemes for extended warranties'144
'with Solid Forsäkring among the foremost partners of retailers in this field'144
'although the link of Moderna Försäkringar with DSG International is producing rapid growth 144
Survey results - average prices 146
On average, extended warranties in Sweden are a great deal cheaper than in the UK 146
Market size 147
Sweden’s market for insurance and warranties linked to non-mobile products is relatively small 147
12.0 UNITED KINGDOM 149
Introduction 149
Research scope 149
Underlying market data 150
Sales of brown goods substantially outpace sales of white goods and furniture in the UK 150
Impact of the Competition Commission enquiry 153
The Competition Commission enquiry has caused retailers to review their sales practices'153
'in the wake of recommendations aiming to rectify a distortion of normal competition 153
Survey results - white and brown goods 154
Manufacturer extended warranty schemes 154
Domestic & General is by far the most prolific partner of manufacturer brands in the UK'154
'although Homeserve is keen to become an enduring force in the UK warranty market'154
'and considered acquiring Domestic & General during 2007 before shelving the plan 154
Retailer extended warranty schemes 156
Domestic & General faces a broader array of competitors in the market for retailer schemes 156
Domestic & General perceives strong potential in expanding its business in international markets 156
Survey results - furniture 158
Retailer extended warranty schemes 158
Furniture protection programs are quite commonly offered by furniture retailers in the UK 158
Valspar’s Guardsman operation offers a variety of services oriented to furniture care in the UK 158
Survey results - average prices 160
The average price of extended warranties in the UK is high by the standards of continental Europe 160
Market size 161
The size of the UK market offers a guide to the development potential in other countries 161
Distribution interfaces and channels used for extended warranties 162
Some potential exists to sell warranties through alternative distribution channels and interfaces'162
'as shown by the progress made by Warranty Direct, acquired by Cardif Pinnacle in April 2008 162
Alternative marketing approaches used for extended warranties 164
Multi-appliance warranties and packaging with banking products are increasingly influential 164
GRAPHICS / TABLES
Organisations covered by the research segmented by type and by country 11
Value of sales of white goods in Europe, 2003-7 16
Value of sales of white goods in Europe, 2003-7 (data) 17
Value of sales per household of white goods in Europe, 2003-7 18
Value of sales per household of white goods in Europe, 2003-7 (data) 19
Value of sales of brown goods in Europe, 2003-7 20
Value of sales of brown goods in Europe, 2003-7 (data) 21
Value of sales per household of brown goods in Europe, 2003-7 22
Value of sales per household of brown goods in Europe, 2003-7 (data) 23
Value of sales of furniture in Europe, 2003-7 25
Value of sales of furniture in Europe, 2003-7 (data) 26
Value of sales per household of furniture in Europe, 2003-7 27
Value of sales per household of furniture in Europe, 2003-7 (data) 28
% of manufacturers of white and brown goods offering extended warranties, 2008 29
% of extended warranties offered by manufacturers of white and brown goods covering accidental damage,
2008 30
Operating models used for extended warranties offered by manufacturers of white and brown goods, 2008 31
Operating models used for extended warranties offered by manufacturers of white and brown goods, 2008
(data) 32
% of retailers of white and brown goods offering extended warranties, 2008 33
% of extended warranties offered by retailers of white and brown goods covering accidental damage, 2008 34
Operating models used for extended warranties offered by retailers of white and brown goods, 2008 35
Operating models used for extended warranties offered by retailers of white and brown goods, 2008 (data) 36
% of retailers of furniture offering extended warranties, 2008 37
Operating models used for extended warranties offered by retailers of furniture, 2008 38
Operating models used for extended warranties offered by retailers of furniture, 2008 (data) 39
Approximate value of the market for extended warranties for white goods, brown goods and furniture in Europe,
2007 40
Approximate value of the market for extended warranties for white goods in Europe split by country, 2007 41
Approximate value of the market for extended warranties for white goods as a percentage of the value of sales of
white goods in Europe split by country, 2007 42
Approximate value of the market for extended warranties for brown goods in Europe split by country, 2007 43
Approximate value of the market for extended warranties for brown goods as a percentage of the value of sales of
brown goods in Europe split by country, 2007 44
Approximate value of the market for extended warranties for furniture in Europe split by country, 2007 45
Approximate value of the market for extended warranties for furniture as a percentage of the value of sales of
furniture in Europe split by country, 2008 46
Approximate average annual growth rates of markets for extended warranties for non-mobile consumer products in
Europe split by country, 2003-7 (data) 48
Total value of sales of white goods, brown goods and furniture in Belgium, 2003-7 51
Value per household of sales of white goods, brown goods and furniture in Belgium, 2003-7 52
Total value and value per household of sales of white goods, brown goods and furniture in Belgium, 2003-7
data) 53
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Belgium, 2008 54
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Belgium, 2008 56
Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by
retailers in Belgium, 2008 57
Average price of extended warranties as a % of price of the underlying products in Belgium, 2008 58
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Belgium, 2007 59
Total value of sales of white goods, brown goods and furniture in the Czech Republic, 2003-7 62
Value per household of sales of white goods, brown goods and furniture in the Czech Republic, 2003-7 63
Total value and value per household of sales of white goods, brown goods and furniture in the Czech Republic,
2003-7 (data) 64
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in the Czech Republic, 2008 65
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in the Czech Republic, 2008 66
Average price of extended warranties as a % of price of the underlying products in the Czech Republic, 2008 67
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in the Czech Republic, 2007 69
Total value of sales of white goods, brown goods and furniture in France, 2003-7 72
Value per household of sales of white goods, brown goods and furniture in France, 2003-7 73
Total value and value per household of sales of white goods, brown goods and furniture in France, 2003-7 (data) 74
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in France, 2008 75
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in France, 2008 77
Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by
retailers in France, 2008 79
Average price of extended warranties as a % of price of the underlying products in France, 2008 80
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in France, 2007 81
Total value of sales of white goods, brown goods and furniture in Germany, 2003-7 84
Value per household of sales of white goods, brown goods and furniture in Germany, 2003-7 85
Total value and value per household of sales of white goods, brown goods and furniture in Germany, 2003-7
(data) 86
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Germany, 2008 88
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Germany, 2008 90
Average price of extended warranties as a % of price of the underlying products in Germany, 2008 91
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Germany, 2007 92
Total value of sales of white goods, brown goods and furniture in Italy, 2003-7 95
Value per household of sales of white goods, brown goods and furniture in Italy, 2003-7 96
Total value and value per household of sales of white goods, brown goods and furniture in Italy, 2003-7 (data) 97
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Italy, 2008 98
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Italy, 2008 100
Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by
retailers in Italy, 2008 101
Average price of extended warranties as a % of price of the underlying products in Italy, 2008 102
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Italy, 2007 103
Total value of sales of white goods, brown goods and furniture in the Netherlands, 2003-7 106
Value per household of sales of white goods, brown goods and furniture in the Netherlands, 2003-7 107
Total value and value per household of sales of white goods, brown goods and furniture in the Netherlands, 2003-7
(data) 108
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in the Netherlands, 2008 110
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in the Netherlands, 2008 112
Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by
retailers in the Netherlands, 2008 113
Average price of extended warranties as a % of price of the underlying products in the Netherlands, 2008 114
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in the Netherlands, 2007 115
Total value of sales of white goods, brown goods and furniture in Poland, 2003-7 118
Value per household of sales of white goods, brown goods and furniture in Poland, 2003-7 119
Total value and value per household of sales of white goods, brown goods and furniture in Poland, 2003-7
data) 120
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Poland, 2008 121
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Poland, 2008 122
Average price of extended warranties as a % of price of the underlying products in Poland, 2008 123
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Poland, 2007 125
Total value of sales of white goods, brown goods and furniture in Spain, 2003-7 128
Value per household of sales of white goods, brown goods and furniture in Spain, 2003-7 129
Total value and value per household of sales of white goods, brown goods and furniture in Spain, 2003-7 (data) 130
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Spain, 2008 132
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Spain, 2008 134
Average price of extended warranties as a % of price of the underlying products in Spain, 2008 135
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Spain, 2007 136
Total value of sales of white goods, brown goods and furniture in Sweden, 2003-7 139
Value per household of sales of white goods, brown goods and furniture in Sweden, 2003-7 140
Total value and value per household of sales of white goods, brown goods and furniture in Sweden, 2003-7
(data) 141
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in Sweden, 2008 143
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in Sweden, 2008 145
Average price of extended warranties as a % of price of the underlying products in Sweden, 2008 146
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in Sweden, 2007 147
Total value of sales of white goods, brown goods and furniture in the UK, 2003-7 150
Value per household of sales of white goods, brown goods and furniture in the UK, 2003-7 151
Total value and value per household of sales of white goods, brown goods and furniture in the UK, 2003-7
(data) 152
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by manufacturers in the UK, 2008 155
Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to
white and brown goods offered by retailers in the UK, 2008 157
Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by
retailers in the UK, 2008 159
Average price of extended warranties as a % of price of the underlying products in the UK, 2008 160
Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile
consumer products in the UK, 2007 161
Distribution interfaces and channels used by consumers for purchasing extended warranties for electronic
appliances in the UK, 2007 163
Importance of extended warranties packaged with bank accounts / credit cards and multi-appliance warranties in
the UK, 2007 165
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