Extended Warranty Market is Expected to Reach USD 252.4 Billion by 2030

The rapid growth of e-commerce and the high cost of repairing modern consumer products contribute significantly to the growth of the global extended warranty market.

According to a new research report by Next Move Strategy Consulting, the global Extended Warranty Market was valued at USD 130.9 billion in 2022, and is expected to reach USD 252.4 billion by 2030, at a CAGR of 8.8% during the forecast period.

The rapid growth of the e-commerce industry worldwide fuels the growth of the extended warranty market. Online retailers and marketplaces often offer extended warranty plans alongside product purchases, making it convenient for consumers to add protection during the buying process. The ease of purchasing warranties online has contributed to the market growth.

Moreover, the advancements in technology facilitated the growth of the extended warranty market. Data analytics and predictive modeling enable companies to assess risk more accurately and offer personalized warranty plans. Additionally, the Internet of Things (IoT) connectivity in consumer products allows for proactive monitoring, enabling timely repairs and replacements. This increases the appeal of extended warranty coverage.

In addition, the cost of repairing modern consumer products has risen significantly. As technology evolves, the components and specialized expertise required for repairs become more expensive than before. Extended warranty plans provide consumers with cost-effective options for repair or replacement, alleviating the financial burden of unforeseen breakdowns. According to the reports published by the Consumer Reports Organization in January 2022, the most common issues found in electric vehicles among the U.S. consumers are failures of in-car electronics, climate systems, and power equipment. These failures lead to expensive replacement of parts, which can be avoided by implementing an extended warranty for electric vehicles.

Furthermore, several products, especially high-value items such as smartphones and home appliances, have longer lifecycles than before. As consumers aim to maximize the lifespan of their purchases, they recognize the need for extended warranty coverage to ensure long-term protection beyond the manufacturer's warranty period. On the contrary, regulations governing the extended warranty market can pose challenges for providers. Compliance requirements, licensing, and varying regulations across different regions or countries can increase administrative burdens and costs for extended warranty companies, potentially limiting the market growth.

However, the increasing customization and flexibility offered by extended warranty providers present a significant opportunity for the market growth. By allowing consumers to tailor their extended warranty plans to meet their specific needs, providers can enhance the value proposition of these offerings. Consumers can choose the duration of coverage, the level of protection, and additional benefits based on their preferences. This provides them with a sense of control and ensures that their investments align with their intended product usage period. 

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According to the report, leading players operating in the American International Group, Inc., Assurant, Inc., Allstate Corporation, HDFC Ergo, AXA XL, Asurion, Amtrust Financial Services, Allianz Partners SAS., Endurance Warranty Services, and Zurich Insurance Group.

The key players in the extended warranty market are implementing various strategies to maintain their dominance and competitive edge. These market players are actively seeking ways to stay ahead in the industry.

For instance, in February 2023, Assurant, Inc. announced a strategic partnership with Okinawa Autotech, an electric scooter brand, to introduce an extended warranty initiative in India. This collaboration aims to provide customers with enhanced protection for their electric scooters. The extended warranty scheme will specifically cover key powertrain components crucial to the scooter's performance, including traction motors, controllers, DC-DC converters, and chargers.

Moreover, in December 2022, Allianz announced plans to launch Allianz Direct, an innovative online platform in France, by the end of 2023. Allianz Direct is a user-friendly online platform designed to provide insurance products directly to customers. By leveraging the power of digital technology, Allianz aims to streamline the insurance process and make it more convenient and accessible for consumers. This initiative reflects Allianz's commitment to enhancing customer experience and embracing digital advancements to meet the evolving needs of today's tech-savvy customers.

Key Insights from the Extended Warranty Market Report:

• The information related to key drivers, restraints, and opportunities and their impact on the extended warranty market is provided in the report.

• The value chain analysis in the market study provides a clear picture of the role of each stakeholder.

• The market share of the players in the global extended warranty market along with their competitive analysis are provided in the report.

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