To put the numbers in perspective, Allstate’s total premiums in 2021 were $45.8 billion, with APP accounting for just under 4% of this.
It may not be the biggest slice of the Allstate pie, but APP’s total premium, at $1.8 billion, has increased sixfold since it was bought by the carrier five years ago — this is according to Allstate’s 2021 annual report.
Known then as SquareTrade (as it is still known outside the US), APP had already cemented itself in America when it was bought by the carrier. The company also operates in Europe, Australia and Asia.
“Our sweet spot is retail in the US,” Wiley said. “In the US, the vast majority of our customers are the major electronics and big box retailers.”
Outside of the US, most of its customers come through cellular carriers.
Recent partnerships include a deal with Japan’s SoftBank on Google Pixel phones – Wiley said this is the “first time” the multinational has outsourced its protection coverage – and with Elkjøp, the largest electronics retailer in Scandinavia.
Other well-known partners include Three in the UK, MediaMarkt in Europe, JB Hifi in Australia and Telenor in Scandinavia.
APP’s proposal is to provide a branded service, coupled with technology, to provide a “fast, reliable service at a lower cost,” Wiley said.
“There’s never been a reason for us to believe that that formula would be less successful outside of the US market, especially in Europe and Asia-Pacific where you have a very well-developed cell phone industry,” Wiley said.
The company has great ambitions and Wiley identified opportunities to grow in all regions, including the ‘huge’ Japanese market.
While, according to Wiley, the service can add value in different regions, the expectations of customers and partners differ.
In Europe there is a greater focus on sustainability, although this is a trend that is becoming more ‘known’ in other markets, especially the US.
Traditionally, device protection has focused on replacing broken items, but in Europe the focus is increasingly on repairs.
“Repair is one of the most enduring things you can do when it comes to device protection because it extends the life of the device — and the longer people hold devices, the less they end up in landfill,” Wiley said.
While a replacement can be done quickly, Wiley said he doesn’t think it’s necessarily the “best customer experience,” giving the example of someone getting a new phone and taking the time to familiarize themselves with the device and apps. to reinstall.
Providers are increasingly looking for ways to speed up the repair process through options such as APP’s on-site same-day repair service, which allows it to send technicians to meet with policyholders at home or a local coffee shop to make simple repairs, such as if it repair a broken phone screen.
Sustainability considerations have also led some retailers to bring together parts of their service, such as protection and trade-in.
“Instead of retailers or mobile carriers that have five different partners for different parts of the service, they’re really turning to more one-stop-shop, integrated service providers,” Wiley said.
For example, APP’s JB Hifi partnership sees it provide both the trade-in service and device protection.
“We’re doing that more and more, all over the world,” Wiley said.
Over the past 10 to 15 years, service speed in the US has overtaken that of other markets, bolstered by technology tools and innovation, Wiley said. Slow service and traditional warranty products have negatively impacted the case’s reputation in the past, he said.
Europe is starting to catch up when it comes to faster repair solutions, Wiley said.
“When we got to the market, it was the same as in the US. It was ‘we’ll fix your phone for you, but it will take two weeks’.”
Japan, meanwhile, is about five years behind, Wiley said, and consumers tolerate “incredibly bad service” such as two-week turnaround and expensive deductibles.
“Despite the reputational issues that exist, most consumers buy protection for their mobile phones in Japan,” Wiley says. “They’re very risk averse, so they really want to have that coverage.”
Individual consumer wish lists also differ: some may want extended coverage, while others just want peace of mind in the event of a broken screen.
Offering flexibility – but not too much choice – is central, according to Wiley.
“The old classic good, better, best is a great approach because it allows customers to choose the coverage they want [without being confusing],” he said.
Wiley attributed the company’s “off the charts” growth over the past two years in part to the COVID impact.
“Underlying demand for the products we cover increased dramatically during COVID,” Wiley said. “And we’re working on that now where things have returned to a very comfortable but normal water level.”
In the US, where retail stores were restricted, consumers — whose spending habits changed and with wallets sometimes boosted by incentives — flocked online to buy electronics. Cell phone sales, on the other hand, were hit by blocking potential customers from the store floor, a trend that Wiley says has since reversed.
“Generally speaking, people wanted to get that protection because they bought these more expensive tickets,” Wiley said.
Supply chain issues that have plagued some manufacturers are starting to normalize, Wiley said, but this also impacted sales.
COVID has temporarily changed the claims landscape, with phone damage claims shifting into the summer. Meanwhile, white goods claims rose as people spent more time at home using appliances, the APP CEO said.
“It makes someone’s life a bit tricky when you’re trying to predict where the company is going in the future because some of these things are trends that last, and others are things that reverse themselves over time as things go back to a new normal,” said Wiley.