EXTENDED WARRANTIES AND INSURANCE FOR MOBILE AND NON-MOBILE CONSUMER PRODUCTS IN SWEDEN TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY...

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1 TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY INTRODUCTION... 3 What is this report about?... 3 Rationale... 3 Evolving distribution channels both favour and compromise extended warranty provision... 3 Methodology... 4 Manufacturer and retailer survey... 4 This survey covers 78 manufacturers and retailers of mobile and non-mobile consumer products... 4 Market data... 4 Distribution channels for retailers... 5 Definitions... 6 Extended warranties and insurance... 6 Extended warranties and insurance linked to consumer products come in a variety of formats... 6 and are frequently marketed to consumers under alternative titles... 6 Premiums and other revenues... 6 Operating models... 7 Weighted shares... 7 PartnerBASE and market data annexe... 7 Finaccord WHITE GOODS... 9 Introduction... 9 Underlying market value and volume Around 2.3 million items classifiable as white goods were acquired by consumers in Sweden in Manufacturers' original warranty length and consumer law Two manufacturers of white goods defy convention by offering original warranties lasting ten years Manufacturer schemes for extended warranties and insurance and few have set up schemes for extended warranties to be paid for separately Retailer schemes for extended warranties and insurance Elgiganten, Media Markt and Tretti run extended warranty programs with external partners with each scheme backed by a different insurer Risk coverage of all schemes for extended warranties and insurance Cover for accidental damage is always included in extended warranties for white goods Independent distribution channels Market value for extended warranties and insurance Market forecasts to Absolute growth of 11.7% is forecast for the value of the Swedish white goods market up to with the extended warranty market also expected to advance steadily BROWN GOODS Introduction Underlying market value and volume The expenditure on brown goods of consumers in Sweden exceeded SEK 10 billion in Manufacturers' original warranty length and consumer law The vast majority of manufacturers of brown goods offer a two-year factory warranty Manufacturer schemes for extended warranties and insurance ANV claims a significant manufacturer partnership Retailer schemes for extended warranties and insurance FINACCORD 09/2014 I

2 By weighted share of partnerships, Moderna Försäkringar and Solid Försäkringar are most prominent although a relatively new competitor has emerged in the shape of Vardia Försäkring Risk coverage of all schemes for extended warranties and insurance Almost all extended warranty schemes for brown goods cover accidental damage Independent distribution channels Market value for extended warranties and insurance Market forecasts to By 2017, the value of the brown goods market is forecast to have risen by another SEK 500 million although this will not necessarily flow through to growth in the related extended warranty market GREY GOODS Introduction Underlying market value and volume Expenditure on products classifiable as grey goods has been declining for several reasons Manufacturers' original warranty length and consumer law Among manufacturers of grey goods, Brother offers the longest original guarantee in Sweden Manufacturer schemes for extended warranties and insurance A half of manufacturers of grey goods researched have an extended warranty program with ANV and London General Insurance used as external underwriters in certain cases Retailer schemes for extended warranties and insurance MAPFRE Asistencia holds one important retailer partnership in this field in Sweden as do the duo of Aon Sweden (as administrator) and AmTrust Nordic (as underwriter) Risk coverage of all schemes for extended warranties and insurance Cover for accidental damage is included in most extended warranty programs for grey goods Independent distribution channels Market value for extended warranties and insurance Market forecasts to The structural decline in the grey goods market is destined to continue meaning that the outlook for related extended warranties is also not favourable MOBILE GADGETS Introduction Underlying market value and volume In 2013, Swedish consumers bought around 4.5 million products classifiable as mobile gadgets Manufacturers' original warranty length and consumer law Only one manufacturer promotes an original warranty lasting more than two years Manufacturer schemes for extended warranties and insurance and nearly half of those investigated have an arrangement for extending those warranties with AIG holding the highest weighted share of partnerships among external partners Retailer schemes for extended warranties and insurance Several mobile network operators run schemes for mobile gadget extended warranties or insurance which throws up opportunities for additional external partners Risk coverage of all schemes for mobile gadget insurance Cover for theft is available in ten of the 25 programs identified Independent distribution channels Market value for extended warranties and insurance Market forecasts to The underlying market value is likely to move up by around SEK 1 billion between 2013 and although the challenge will be to stop extended warranty and insurance take-up rates from falling further MOBILE PHONES Introduction Underlying market volumes The number of mobile phone subscriptions advanced by around 1.5 million between 2009 and taking the mobile handset penetration rate to around 81.5% of Sweden's total population Manufacturers' original warranty length and consumer law FINACCORD 09/2014 II

3 Most manufacturers of mobile phones limit themselves to an original warranty of one year Manufacturer schemes for mobile phone insurance and only Acer and Apple have an arrangement for extending these Retailer schemes for mobile phone insurance Three competitors hold a combined weighted share of partnerships of more than 75% with Solid Försäkringar the leader by this measure Risk coverage of all schemes for mobile phone insurance Cover for fraudulent calls is available in seven out of 19 schemes in this sphere Independent distribution channels Market value for mobile phone insurance Market forecasts to Mobile phone subscriptions in Sweden are likely to have exceeded 13 million by propelling the number of individuals with a mobile phone above 8 million and helping to generate fairly healthy growth in the country's mobile phone insurance market FINACCORD 09/2014 III

4 LIST OF GRAPHICS / TABLES 0.0 EXECUTIVE SUMMARY... 1 Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in Sweden, 2009, 2013 and 2017 (forecast)... 2 Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in Sweden, 2009, 2013 and 2017 (forecast) (table) INTRODUCTION... 3 Organisations researched in Sweden, segmented by type, Retailers researched in Sweden segmented by distribution channel, WHITE GOODS... 9 Value and volume of sales of white goods in Sweden, 2009 and Comparative length of original warranties offered by manufacturers of white goods in Sweden, Manufacturer schemes for extended warranties and insurance linked to white goods in Sweden: provision rates and operating models, Manufacturer schemes for extended warranties and insurance linked to white goods in Sweden: unweighted and weighted provider share of partnerships, Retailer schemes for extended warranties and insurance linked to white goods in Sweden: provision rates and operating models, Retailer schemes for extended warranties and insurance linked to white goods in Sweden: unweighted and weighted provider share of partnerships, Risk coverage of all schemes for extended warranties and insurance linked to white goods in Sweden, Approximate market value for extended warranties and insurance linked to white goods in Sweden, 2009 and Value and volume of sales of white goods in Sweden, 2013 and 2017 (forecast) Approximate market value for extended warranties and insurance linked to white goods in Sweden, 2013 and 2017 (forecast) BROWN GOODS Value and volume of sales of brown goods in Sweden, 2009 and Comparative length of original warranties offered by manufacturers of brown goods in Sweden, Manufacturer schemes for extended warranties and insurance linked to brown goods in Sweden: provision rates and operating models, Manufacturer schemes for extended warranties and insurance linked to brown goods in Sweden: unweighted and weighted provider share of partnerships, Retailer schemes for extended warranties and insurance linked to brown goods in Sweden: provision rates and operating models, Retailer schemes for extended warranties and insurance linked to brown goods in Sweden: unweighted and weighted provider share of partnerships, Risk coverage of all schemes for extended warranties and insurance linked to brown goods in Sweden, Approximate market value for extended warranties and insurance linked to brown goods in Sweden, 2009 and Value and volume of sales of brown goods in Sweden, 2013 and 2017 (forecast) Approximate market value for extended warranties and insurance linked to brown goods in Sweden, 2013 and 2017 (forecast) GREY GOODS Value and volume of sales of grey goods in Sweden, 2009 and Comparative length of original warranties offered by manufacturers of grey goods in Sweden, Manufacturer schemes for extended warranties and insurance linked to grey goods in Sweden: provision rates and operating models, FINACCORD 09/2014 IV

5 Manufacturer schemes for extended warranties and insurance linked to grey goods in Sweden: unweighted and weighted provider share of partnerships, Retailer schemes for extended warranties and insurance linked to grey goods in Sweden: provision rates and operating models, Retailer schemes for extended warranties and insurance linked to grey goods in Sweden: unweighted and weighted provider share of partnerships, Risk coverage of all schemes for extended warranties and insurance linked to grey goods in Sweden, Approximate market value for extended warranties and insurance linked to grey goods in Sweden, 2009 and Value and volume of sales of grey goods in Sweden, 2013 and 2017 (forecast) Approximate market value for extended warranties and insurance linked to grey goods in Sweden, 2013 and 2017 (forecast) MOBILE GADGETS Value and volume of sales of mobile gadgets in Sweden, 2009 and Comparative length of original warranties offered by manufacturers of mobile gadgets in Sweden, Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in Sweden: provision rates and operating models, Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in Sweden: unweighted and weighted provider share of partnerships, Retailer schemes for extended warranties and insurance linked to mobile gadgets in Sweden: provision rates and operating models, Retailer schemes for extended warranties and insurance linked to mobile gadgets in Sweden: unweighted and weighted provider share of partnerships, Risk coverage of all schemes for extended warranties and insurance linked to mobile gadgets in Sweden, Approximate market value for extended warranties and insurance linked to mobile gadgets in Sweden, 2009 and Value and volume of sales of mobile gadgets in Sweden, 2013 and 2017 (forecast) Approximate market value for extended warranties and insurance linked to mobile gadgets in Sweden, 2013 and 2017 (forecast) MOBILE PHONES Volume of mobile phone subscriptions and subscriptions per capita in Sweden, 2009 and Number of individuals owning a mobile phone in Sweden and their weighting within the total population, 2009 and Comparative length of original warranties offered by manufacturers of mobile phones in Sweden, Manufacturer schemes for extended warranties and insurance linked to mobile phones in Sweden: provision rates and operating models, Manufacturer schemes for extended warranties and insurance linked to mobile phones in Sweden: unweighted and weighted provider share of partnerships, Retailer schemes for extended warranties and insurance linked to mobile phones in Sweden: provision rates and operating models, Retailer schemes for extended warranties and insurance linked to mobile phones in Sweden: unweighted and weighted provider share of partnerships, Risk coverage of all schemes for extended warranties and insurance linked to mobile phones in Sweden, Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in Sweden, 2009 and Volume of mobile phone subscriptions and subscriptions per capita in Sweden, 2013 and 2017 (forecast) Number of individuals owning a mobile phone in Sweden and their weighting within the total population, 2013 and 2017 (forecast) Forecast market value and policies in force for extended warranties and insurance linked to mobile phones in Sweden, 2013 and FINACCORD 09/2014 V