Can gadget growth help attract the next generation of insureds?

Gadget insurance is one of the unsung success stories of the UK’s general insurance market, providing both policy volumes and premium growth last year. The cover is also scoring highly on fair value for consumers and has a high uptake amongst younger consumers, who have a high financial and emotional attachments to their gadgets.

This attachment and the need for protection means that gadget insurance presents a unique opportunity to build early relationships with younger consumers.

According to FCA data, insurance policies covering gadgets surged from 7.87 million in 2023 to 8.46 million in 2024. Premium income also saw significant increase from £496m in 2023 to £604m in 2024.

Significant growth for gadget insurance reflects the rising importance of tech devices in everyday life. Although it is often thought of as an add-on insurance, the growth in gadget cover has been driven by standalone sales.

Will Pritchett, insurance industry lead for the UK, Ireland and Africa at Accenture, said: “In 2024, approximately two-thirds of gadget insurance policies in the UK were sold as standalone cover, rather than bundled as add-ons

“Add-ons sold through mobile network providers or retailers remain significant, as consumers often opt for the convenience of buying insurance at the point of purchase, especially for expensive devices.

“FCA regulations on add-on insurance sales has also encouraged a shift toward more transparent standalone options. Recent acquisitions of specialist gadget insurers by larger UK insurance firms have led to the rise of white-label gadget insurance products.

“Most standalone products offer a multi-product option that is in high demand – with people owning more devices than ever. A single comprehensive policy that protects all devices is simpler and more cost-effective than insuring each item separately.”

Gadget growth

Smartphones, tablets and wearables are essential tools for work, personal finance, shopping and socialising.

Meanwhile, their monetary value continues to rise, as do the risks from mobile payments and online transactions, such as fraud and cyber crime. This creates opportunities for insurers to integrate cyber cover as an add-on or premium enhancement.

Cormac Bradley, senior actuarial director at insurance consultancy Broadstone, said: “Insurers can grow gadget insurance by expanding beyond traditional sales routes and embedding cover at the point of purchase through retailers, mobile networks and buy now, pay later platforms.

“Growth in premiums can come from pricing more closely aligned to usage and risk, for example through tiered cover, dynamic pricing or family or multi-device bundles. Policies that are flexible, subscription-based and personalised will help drive both volume and value.”

Carriers should consider a number of strategies to continue driving growth, including partnering with tech brands or social media influencers to build trust and visibility.

They also need to enhance digital experiences to match the expectations of tech-savvy consumers. In addition, insurers should offer flexible, affordable coverage that reflects the lifestyles of younger generations.

Fair value

Although many add-on products face regulatory scrutiny from the FCA, gadget insurance has maintained high scores for fair payouts from the regulator.

Pritchett explained: “Insurers need to maintain scoring highly in fair value for consumers. Being close to product developments and claims data to ensure insurers are proactively ahead of the fluctuations in such a fast-moving market.

“With technology risk increasing every day and as insurers start expanding their products to respond to this, they need to consider how they’re completely transparent in what is and is not covered.

“If insurers start to provide more complex cover this can start to cause confusion at point of claim, increase repudiations and start to attract more attention on whether it is maintaining fair value.”

Pritchett added that, with the FCA’s Consumer Duty placing greater emphasis on transparency and fairness, insurers must stay close to product development and claims data to anticipate market shifts.

They must also clearly communicate coverage details, especially as cyber insurance becomes more complex.

Market opportunity

Gadget insurance is often a young person’s first interaction with insurance and may provide a more positive experience than motor, where premiums often penalise young drivers. As such it offers insurers a chance to close the generational gap amongst insureds and build trust.

Bradley explained: “By offering low-cost, accessible cover that fits how they live – multi-device households, wearables or refurbished tech – insurers can reach groups who might otherwise be disengaged. If used to educate younger customers about wider protection needs, it can help bridge the gap to more traditional insurance products later on.

“Trust grows when insurance is fair, responsive and straightforward. Fast digital claims, clear language and real-time updates via apps align with the expectations of younger consumers. Delivering immediate, tangible value – such as same-day repairs, replacement devices or data recovery – shows insurance working in practice, not just on paper.”

Gadget insurance can be the start of a long-term relationship with the next generation of insurance buyers if insurers can build an understanding of a customer’s lifestyle, digital habits and financial needs.

Relevant products, loyalty schemes, bundled protection products and timely guidance can help move young consumers from short-term gadget policies to broader financial resilience.

Insurers may also use technology-led experiences, such as AI for proactive servicing and claims management, to stay relevant. They can also explore new coverage areas: aligned with emerging trends.

Pritchett concluded: “Gadget insurance is more than a niche product—it’s a strategic lever for insurers to modernise their offerings, build trust with younger consumers, and close the generational gap in insurance engagement. As technology continues to shape lifestyles, insurers that adapt quickly and authentically will be best positioned to lead the market.”