WDM Magazine

Have you ever lost your handset? It is reported that 1 in 4 handsets are lost, stolen or accidentally damaged every year. Concerns are mounting over the increasing cost of replacement devices, particularly with the trend toward purchasing higher-end phones and smartphones. Consumers really want peace of mind through an affordable solution to protect their mobile phone investment. We spoke with the team at eSecuritel, a handset insurance company, about the latest trends in handset protection. According to eSecuritel, among their clients they have seen a significant demand in take rates of insurance during 2009. In some cases, well over 50% of handsets sold have added the insurance feature.

Who is buying handset protection today? Purchasers of handset protection are evenly split between handsets less than $150 and handsets above that value. According to customers who bought insurance through eSecuritel, only 18% paid over $200 for their handset. Prepaid consumers are buying insurance at nearly the same rate of postpaid. The price of the phone combined with the perceived price of a replacement phone seems to be the major driver for the decision to subscribe to a handset insurance protection plan. Add to that, the increasing adoption rate of smartphones nationally, and consumers are inquiring more often about replacement insurance than ever before from retailers.

Not all handset protection services deliver. There are some shortcomings with existing dealer insurance programs including many offerings that are not compliant with State insurance regulations. Most existing programs available to dealers require a large upfront payment of annual premiums, which can be difficult for a consumer to afford after paying for a higher priced handset. In some cases, customers are faced with lack of availability of replacement equipment and little to no visibility into the claims process. Some plans can also only support mail-in replacements instead of an option of same-day or in-store replacement. This is particularly aggravating to a customer who is standing in the store when initiating a claim and would prefer to be able to leave with their replacement phone. Customers make their claims in the retail location 85% of the time so why send them the phone through the mail when it is right across the counter?

The ability to offer an ‘in-store’ experience where fulfillment of claims can be handled instantaneously helps the wireless retailer leverage their relationship with their customer and creates an opportunities for accessory sales and upgrades. For the dealer, the ability to offer monthly premiums for handset insurance solutions greatly increases the number of consumers who are willing to add this feature. According to eSecuritel, administering an eSecuritel monthly insurance program is easy with their software that allows for real time claims visibility, and streamlined, fully-integrated and automated enrollment, processing and tracking. This Web-based system can be integrated with the dealer’s current POS system, or used in conjunction with existing operations.

Wireless protection programs should include more than basic handset protection or a limited extended warranty. Policies vary depending on the provider. When a dealer is selecting a handset protection provider, he should be sure to look for these important elements:

1. Policies that cover all the risks-damage, lost, stolen and mechanical and electrical failure (extended warranty); just covering extended warranty only covers consumers for about 5% of handset issues
2. Monthly as well as pay-up-front premium options to maximize those customers willing to consider the addition of the insurance feature. - pays the dealer monthly “residuals” while leaving more money in your customers pocket to purchase accessories.
3. In-Store fulfillment of the claim; leverage your existing relationship with the customer and provide the best possible customer experience
4. Policies that are underwritten by an “A-Rated Insurer” and are compliant in all 50 states and Canada.
5. The provider will assume and underwrite the risk for all policies inside their program and will train dealer employees to ensure they are compliant through the enrollment process.
6. Provider can offer you and your customer’s real-time access to the claims process for checking on status of claims and for comprehensive reporting to improve the program.
7. Adequate reporting to manage inventory for replacements to ensure no customer is left without a phone at time of claim.

The team at eSecuritel, who serves 25 carriers, has developed a ‘turn-key’ insurance software system called, HITS^TM. Their solution offers real-time access to all aspects of the enrollment and claims process so the retailer can intelligently interface with the customer about the process including the status of their replacement handset. The eSecuritel team will train dealers and retailers onsite as well as offer refresher training sessions, as needed. Dealers can access customer information 24/7, providing details, program announcements, and contact information for claims. The HITS^TM system can also facilitate promotion planning and execution, and database customer segmentation and targeting. eSecuritel will support the dealer as the program grows including developing and providing training promotions and access to supporting marketing collateral such as posters, stickers and bag inserts.
eSecuritel operates an 80-seat multi-lingual call center with Web-enabled agent performance monitoring. All calls to the eSecuritel call center are surveyed for customer satisfaction, and close to 100% of the calls are recorded in order to maintain the highest quality customer experience during claims processing. The HITS program allows for custom scripting by the retailer for a seamless, branded interaction with their customer.

The consumer’s desire to protect their investment with handset insurance is growing. Whether you choose eSecuritel, or another provider, all retailers should consider satisfying their customer’s peace of mind by including a quality handset insurance plan at point of sale.

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