New products are being developed, new distribution channels opened and the insurer’s ability to identify fraud associated with high-value devices is becoming ever more important. Crucially, the availability of accurate, regularly updated mobile device data has made the quoting of premiums and settling of claims for mobile ‘phones a far quicker and more precise affair.
Mobile ‘phone insurance market continues to grow
Mobile ‘phones represent both a growth and innovation area for insurers. Smartphones have become ubiquitous and are highly desirable, not only for consumers but also the thieves who prey on them, with current models often costing in the region of $1,000.
Valued by IMARC at $22.8bn in 2018, the global market for mobile ‘phone insurance is showing strong growth, with a projected compound annual growth rate (CAGR) of 9.73% between 2018 and 2024 – bringing it to a total value of $39.8bn by the end of that period.
For insurers to make the most of this, however, they must keep pace with the expectations of consumers. One survey of insurance customers indicated that just 15% report being satisfied with their insurer’s digital offering.
Today’s connected consumers expect results straight away and, in order to ‘delight the customer’, insurers need a way of simplifying and speeding up their customer-facing processes, while protecting their businesses against fraudulent claims. That means being able to determine how much a device is worth at the point of policy issuance and to verify whether a claim is valid, without undue delay.
The GSMA’s TAC and IMEI data
The GSMA can help here, as the body responsible for issuing mobile device identifiers globally. Brand owners and manufacturers apply directly to the GSMA for a type allocation code (TAC) to identify each device model. This number forms the first eight digits of the international mobile equipment identity (IMEI) number, which identifies each individual device.
The GSMA is therefore solely capable of providing a range of services based on real-time access to TAC and IMEI data. With this data at their fingertips, insurers can easily identify the model, age and capabilities of a mobile device, allowing them to assess its authenticity and value before agreeing to insure it. Our highly accurate data can also differentiate between handsets and IoT devices, such as wearables.
Helping insurers speed up decisions and identify fraud
With over 10,000 mobile device models launched every year, insurers need to know the characteristics of a given handset at speed, in order to decide policies and determine premiums – which, thanks to TAC data, they can achieve instantly via the GSMA device database.
The reliability of the GSMA’s TAC database – the integrity of which is enforced rigorously to avoid duplication of TAC numbers – makes it suitable for use with automated decision-making tools.
The IMEI data allows the GSMA to maintain the world’s most complete registry of lost, stolen or fraudulently obtained devices – the GSMA IMEI black list – equipping insurers with a highly accurate shield against fraudulent policy applications or claims.
The data also helps to verify the legitimacy of refurbished devices which, according to IMARC, make up 29.9% of the total global market for mobile ‘phone insurance. This GSMA data is made available by high performance APIs, enabling insurance policy issuance and claims processing software to tap into the relevant information instantly.
McKinsey has found that such automation is capable of cutting the cost of claims processes by around 30%. Insurers looking to make those kinds of savings while insuring mobile devices – and gain the market advantage of being able to pass those savings on to customers in the form of lower premiums – need access to the data which makes it possible.
As global gatekeeper of identity among mobile devices, the GSMA is already working with leading insurance companies and stands ready to support any insurer seeking to improve the speed and accuracy of their premiums and reduce losses from fraudulent claims.
Get in touch with the GSMA today to find out how your business can benefit.
Mr Edward Wong is outreach director at the GSMA. He is responsible for client relations across GSMA devices services spanning the large APAC region. Based in Hong Kong, he supports all GSMA members, enterprise and service provider customer base.