Gadget Insurance: The quiet growth story in UK General Insurance

Analysis of the latest data from the FCA1 from leading independent insurance consultancy Broadstone shows that gadget insurance is not only growing in policy volumes but also maintaining fair payout ratios.

It is an increasingly rare combination in the UK General Insurance market where many add-on products face regulatory scrutiny and profitability challenges – however, gadget insurance stands out as a resilient performer.

The statistics show strong consumer demand for gadget insurance over the past three years with policies rising from 7.87 million in 2023 to 8.46 million in 2024, an annual growth rate of 7.5%. There has been some ebb and flow in the proportions sold as add-on versus stand-alone cover with no particular trend in recent years. 

The mix is likely to be sensitive to how individual insurers class add-ons, however, stand-alone represents the bulk of sales with nearly two thirds of policies sold in this way. Across both channels, there was a surge in premium income, which rose from £496 million in 2023 to £604 million in 2024, a 22% increase.   

This growth reflects the rising importance of tech devices in everyday life. Smartphones, tablets and wearables are no longer luxuries – they’re essential tools for work and leisure and device prices have risen sharply which has driven both higher demand and premiums.

The marked premium growth in 2024 indicates insurers are restoring margins after years of tight profitability however, unlike some consumer insurance products under FCA scrutiny, gadget insurance continues to deliver fair value.

Add-on payout ratios remain stable at 41.8%, while stand-alone products saw a drop from 59.3% in 2023 to 42.9% in 2024, likely due to pricing recalibration. Claims frequency is falling – add-on policies fell from 12.8% to 7.8% and stand-alone policies from 10.4% to 7.8% between 2022 and 2024. This suggests a progression from very high levels of product utilisation to something more sustainable. Claim payouts have been rising, likely due to changing claims mix and higher-value devices being insured.

This combination of lower claim incidence and higher payouts suggests consumer willingness to pay for comprehensive cover and an evolving risk profile as the product becomes more mainstream.

Gadget insurance is notable for its appeal to younger demographics. With smartphones and mobile devices being central to the lives of younger consumers, this product category likely includes a higher proportion of policyholders under 40. 

For an industry often challenged to engage younger generations, the growth and value metrics of gadget insurance may signal progress. It suggests insurers are beginning to meet the expectations of digital-native consumers with relevant, accessible products.

Cormac Bradley, Senior Actuarial Director at Broadstone, commented: “While some niche insurance products struggle to justify their value, gadget insurance is thriving. It is delivering consistent consumer benefit and adapting to market realities.” 

“Driven by the rising importance – and cost – of devices in people’s everyday lives, consumer demand is strong and becoming an essential product. It’s one of the few product lines that appears to be engaging younger consumers while maintaining fair value metrics.” 

“This could be a sign that insurers are beginning to close the generational gap in product relevance and accessibility. Insurers that meet younger consumers where they are today are well placed to anticipate their needs and build trust that lasts well beyond the gadget lifecycle.”

“The growth in this market is a significant opportunity for insurers underpinned by a stable regulatory outlook however insurers must also be alive to shifting trends to support further expansion. For example, tech inflation and evolving risk profiles which may necessitate dynamic pricing.”