How to make insurance more accessible to buyers of second-hand goods
This podcast was published on: 10/25/2021.
Many prefer to buy new phones, fearing that second-hand models will fail sooner, that the battery will be damaged or that the insurance policy will be inadequate or cost more. In this context, BNP Paribas Cardif and the SOFI Group have joined forces to develop Smarty+, an app that makes insurance more accessible to buyers of refurbished phones. Hayat Ouraghi, Senior Relationship Manager at BNP Paribas Cardif and Jean-Christophe Estroude, Chairman of SOFI Group, tell us about this partnership.
Why did BNP Paribas Cardif and SOFI Group choose to work together on a refurbished product guarantee?
Jean-Christophe Estroude: 80% of a smartphone’s environmental impact is due to its fabrication. Over 70 different materials are needed to manufacture it which accelerates resource scarcity and generates pollution. Unfortunately, consumers still prefer to buy a new phone rather than repair the slightly damaged one they have. It is worth highlighting that refurbishing used or damaged phones saves 52 kilos of CO2 and 60 kilos of raw materials extraction. The price of a reconditioned smartphone is also 30 to 50% lower than a new one. Then, why pay more when you can enjoy the same characteristics for a lower price? We concluded that buying a replacement device second-hand benefit both your wallets and the environment. With this in mind, our company decided to develop our smartphone and tablet repair tool. After reconditioning the devices, we resell them under the Smart brand to private individuals and professionals through different channels and retail networks, including our online shop. BNP Paribas Cardif spotted this expertise in us.
Hayat Ouraghi: Until recently, our insurance policy used to only cover new phones at BNP Paribas Cardif, but we’ve decided to extend our insurance offer to second-hand devices. We soon realised that there was a growing demand in the second-hand smartphone market but that the customers were potentially afraid of buying a phone that was not in good condition or that would not be covered in case of loss, theft, or accidental damage. As an insurer, our prerequisite was to protect ourselves against the risk of fraud. That’s why we needed to be able to diagnose devices remotely and make sure there was no pre-existing damage. If a smartphone is already damaged, it cannot be covered by any insurance policy. But once it’s been repaired, we can insure it. As BNP Paribas Cardif cares about the environment and our customer well-being, we are convinced that an insurance warranty that covers refurbished phones can help extend the life cycle of smartphones and enable customers to reduce their carbon footprint. With this in mind, we were looking for a phone diagnostics solution. SOFI’s seemed very interesting to us.
Then, you worked together to develop the Smarty+ app. What is it?
Hayat Ouraghi: We worked together on this diagnostic application. If someone wants to insure his smartphone, this app allows him to diagnose his device and make sure it’s working properly. When I visited SOFI Group’s factory, I discovered its industrial tool which uses a technology to diagnose incoming and outgoing phones. We decided to take inspiration from this tool and embed the technology in a very easy-to-use application that can be downloaded by a customer onto his smartphone. Then, step by step, this customer can carry out a complete diagnosis by following the instructions. For example, he will be asked to test the touchscreen by simply running his finger around it. All the sensors will be checked, as well as the wifi and so on. If the smartphone is not damaged, the customer can subscribe to our insurance and can also generate a diagnostic certificate very useful when he wants to resale his device. This is a real plus in terms of transparency.
Finally, how would you sum up this second-hand phone insurance and technological collaboration?
Hayat Ouraghi: SOFI Group has a strong CSR identity, in line with BNP Paribas Cardif’s values. They created jobs and have been able to rehire all their colleagues. This human adventure is also in line with my personal values and those of BNP Paribas Cardif. So, I am really delighted with this collaboration.
Jean-Christophe Estroude: The recognition from a large group like BNP Paribas Cardif is really important and rewarding. This collaboration on the application’s development also enabled us to be more innovative. We are very proud to have been able to work with a major group and to have launched a very innovative and interesting offer on the market.
