Archived Copies of Warranty Week

December 2002 to Today

Extended Warranty Revenue Trends: Because so many extended warranty programs are run by small private companies or by huge companies that don't break out their service contract revenue, it's almost impossible to size the business accurately. But four companies reveal just enough financial data to suggest that 2020 and 2021 have been really good years for the product protection industry.
November 11, 2021
Mid-Year HVAC & Appliance Warranty Metrics: The totals and averages are moving in response to the ups and downs of the top manufacturers. But they didn't move much in response to the pandemic or the lockdowns that follows. At the same time, for at least one top home improvements retailer, the extended warranty business is booming.
October 21, 2021
Worldwide Jet Engine Warranty Report: Though some of the biggest manufacturers in the industry are also in many other lines of business, the warranty expense rates of the "pure play" jet engine makers remain close to industry averages. And while COVID grounded many commercial airliners, it didn't decimate the jet engine industry as badly as one might have guessed.
July 1, 2021
Worldwide Aviation Warranty Expenses: Although the world changed nearly instantly when the pandemic began, there's a lot of inertia in the commercial airline and business jet industries. So although the passenger count plummeted, the number of flights declined more gradually, and the warranty expenses even slower. Some even saw their warranty costs rise, while others recovered from past predicaments.
June 24, 2021
Truck, RV & Car Warranty Snapshots: The pandemic lockdowns hit the consumer vehicle makers hardest, and the farm equipment makers the least, as one would expect when commuting to the office is forbidden and food becomes an essential business. The good news is that the downturn may have hit bottom in the second quarter, with third-quarter data pointing towards a V-shaped recovery, as both sales and warranty accruals rise proportionally for many companies.
November 12, 2020
U.S. Auto Warranty Metrics: In 2019, warranty metrics improved for Tesla and deteriorated for GM and Ford. While Tesla still sets aside the most funds per unit sold to finance future warranty costs, its current claims rate is one of the lowest in the business. And while GM and Ford spend less per vehicle, their vehicles also cost less, and their costs have been rising for several years in a row.
March 5, 2020
Telecom Industry Warranty Report: While many of the top equipment manufacturers continue to lose business to, or get acquired by foreign firms, there are still several hundred U.S.-based telecom companies paying claims and maintaining warranty reserves. But there's no denying that the business isn't what it used to be a decade ago.
May 16, 2019
Extended Protection Plans: While warranty data is the starting point, warranty analytics is what drives the business. Warranty analytics can be used to create an intelligent extended protection plan that identifies the types of failures, which customers are most impacted by them, and what the root cause might be. This, in turn, also helps determine the right level of coverage to meet the customer's risk profile.
March 14, 2019
PCMI Signs AmTrust for Reinsurance Software: As AmTrust looks for ways to boost its core insurance underwriting business, making it easier for clients to see the financial metrics of their reinsurance investments becomes a priority. And PCMI's modular approach to reinsurance reporting software makes it easier for AmTrust to implement.
January 31, 2019
Home Service Technology: How Smart is Your Home? The Top 5 Ways Technology Will Transform the Home Warranty Business
January 3, 2019
Civilian Aircraft Report: Warranty expense rates have been steadily declining since 2011 and are now at their lowest levels ever. That means the manufacturers of everything from biplanes to business jets are cutting their warranty costs by remarkable amounts. Meanwhile, per mile, air travel is even safer than walking.
October 4, 2018
Mobile Home Warranty Expenses: While much of the industry collapsed a decade ago, the five large manufacturers that remained in business have made a steady comeback. Last year, claims and accruals finally surpassed their pre-recession peaks, even while most of the remaining manufacturers have been able to keep those expenses steady as a percentage of sales.
August 9, 2018
Commercial Service Contracts, Part 1: The importance of extended warranties sold to commercial customers is steadily increasing, as measured by the percentage of revenue they represent for manufacturers, and by the amount of business they represent for insurance companies. And in response, industry leaders have launched a new trade association for commercial service contracts.
December 7, 2017
Service Contract Insurance Stocks: Though there are very few publicly-traded companies that derive most of their revenues from sales of extended warranties, almost a dozen public companies have a significant share of the business. Whether it's from home warranties, auto, electronics or mobile phones, the success of their protection plan sales efforts provide investment opportunities to outsiders.
September 28, 2017
Extended Warranty Software: Unlike most other solutions, which are designed to integrate with passenger car dealer management systems or retail point of sale software, the new Mize offering is aimed at manufacturers engaged in the business-to-business sale of commercial service contracts.
September 14, 2017
Extended Warranty Conference, Part 2: In the service contract business, the breadth of protection plans and coverages is growing, and the pace of technological innovation is quickening, while the lawmakers and regulators struggle to keep up with all the changes.
September 7, 2017
Worldwide Aircraft Warranty Report: With warranty expenses that exceed a billion dollars annually, the manufacturers of airliners, business jets, and propeller planes are a major sector within the warranty industry. And over the past decade, they have learned how to reduce warranty costs while increasing revenue, as demonstrated by their declining claims and accrual rates.
July 20, 2017
Civilian Aircraft Warranties: The manufacturers of large commercial airliners seem to have lower warranty expense rates than the companies making smaller business jets or regional jets. Is that because their products are built better or is it a function of how most aircraft warranties are provided to customers in sections?
June 15, 2017
Building Trades Warranty Report:  Unlike most other industries, in the new home construction business, the builders have lower warranty expense rates than many of their suppliers. But the makers of appliances and heating/cooling systems are now cutting their costs and narrowing the gap between their expense rates and those of the makers of fixtures, furniture, and building materials.
April 27, 2017
Retail Product Warranties: Though it's not common, there are some retailers, primarily in the auto parts business, that provide their own product warranties above and beyond what the manufacturers offer, and report those expenses in their financial statements. But it's likely to become more common in other lines of business, as more manufacturers open their own retail outlets or sell directly to consumers online, and more retailers begin to sell their own brands.
August 18, 2016
Planning and Structuring a Successful Warranty Transformation Program: One of the biggest mistake companies make is failing to consider the needs of customers and stakeholders in other departments. Others fail to articulate the business benefits internally, or they fail to consider industry trends that will impact the warranty process.
June 23, 2016
Using the Internet of Things for Warranty Business: Most businesses looks at warranty as an overhead item. Managers are always under pressure to ensure warranty costs stay within limits. They are on the constant lookout for solutions which can help them manage their warranty costs better. The Internet of Things (IoT) is a concept with many possibilities and something that offers great solutions for reducing warranty costs. This article talks about what points a warranty business should consider before implementing the IoT.
October 29, 2015
Fulcrum Analytics Spins Off After Inc.: The experts in extended warranty analytics and post-sale marketing services have spun off the business unit so it can stand on its own.
September 17, 2015
Warranty Year in Review: While some companies enjoyed record highs on the stock market, others suffered as rising warranty costs cut into profits. Some even went out of business. And top automakers once and for all proved how useless the TREAD Act is when it comes to protecting customers.
January 8, 2015
Appliance & HVAC Warranties: Expenses are down in early 2014, partially because of lower product sales and partially because of effective cost-cutting programs. But GE is leaving the business and the other top manufacturers are among the best cost-cutters. So expenses are likely to keep falling.
September 18, 2014
Aerospace OEM & Supplier Warranties: Unlike the automotive business, aerospace manufacturers seem to divide warranty expenses equitably between OEMs and suppliers, both as a percentage of their revenue and as a percentage of the total cost.
August 28, 2014
Consumer Electronics Warranty Report: The traditional radio and TV makers are gone, and even laptops are giving way to smartphones. So it's no surprise to see the bulk of the industry's warranty expenses shift from Hi-Fi to Wi-Fi. But that expansion also drags in lots of business-to-business sales as well as heavily-exported product lines into the analysis.
June 5, 2014
Aerospace & Appliance Warranties: From airplanes to air conditioners, each industry has a typical cost of warranty based on the product it makes and what kind of customer it attracts. Business-to-business products such as airplanes have lower expense rates than consumer-facing products such as home appliances.
February 6, 2014
Warranty Workshops: Three of the four pre-conference workshops at this year's WCM Conference are built around analytics, but none require much math. Instead, they lay out the business case for analytics, and the benefits the software and services can provide. Another workshop promises to show diversified manufacturers how to gain a global view of their warranty operations.
February 21, 2013
Addressing Common Business Challenges Associated with Manufacturer Warranties: Proper estimation and accounting of warranty costs isn't easy, but the benefit of doing so is enormous. Actuaries in pursuit of precise and accurate forecasts can employ techniques similar to those used in estimating the financial impact of insurance coverage, and can help a company avoid restatements and other adverse impacts that could threaten its profitability.
January 31, 2013
Warranty Success Stories: Major manufacturers will share their insights and experiences at the WCM Conference next week, detailing the highlights of their warranty journeys and business process improvement efforts. What follows are some previews from the presenters.
March 1, 2012
Power Equipment Warranty Report: While GE dominates the traditional end of the electrical power generation business, a whole group of new companies are jumping into the solar energy and electric car businesses. And some retailers that never had much to do with the gasoline engine are angling to become the new homes of the charging stations.
June 9, 2011
VSC Industry Structure: In a business as opaque as the vehicle service contract industry, it's not always obvious who all the players are or how they all work together. And auto dealers who make the wrong choice of partners may not know it for years.
February 4, 2010
Home Inspection Warranties: It seems like a natural pairing. First the home inspector eyeballs the appliances, and then the home warranty company agrees to cover them. But it's not so simple in a business where honest advice is hard to find, and wariness about conflicts of interest is everywhere.
November 19, 2009
"Expiring" Warranty Scams: Existing laws are not much of a deterrent and the lawsuits are merely a cost of doing business. But a group of auto warranty finance companies think they have a better way to stop the pre-recorded phone calls and misleading postcards: banding together and refusing to do business with the scammers.
August 14, 2008
Warranty Management: Warranty management for manufacturing and sales organizations is becoming an intense focus area. Warranty spending by US-based companies surpasses the Gross Domestic Product of some nations. But warranty is an avoidable cost, if managed efficiently and judiciously. As warranty also involves customers directly, the larger imperative of organizational image is at risk. A prelude to warranty management is information stability, consistency and transparency.

The Chief Information Officer plays a pivotal role to iron out the initial impediments before laying out a smooth track for warranty management in any enterprise. This article brings out the different sources of warranty data, a collaboration model for warranty data, the business dynamics of multiple stakeholders with respect to warranty management and displays ways to assess and improve warranty information maturity.
November 14, 2007
Warranty Acquisitions: When companies merge, what happens to their warranty expenses? Is it just a mathematical sum of the two? Or does the frugal side of the business teach the other side how to reduce its warranty expenses?
July 17, 2007
Transforming a Warranty Program: IBM drives warranty service quality improvements through a Business Partners network. Its new Service Advisory Council suggests paying bonuses for achieving certain performance metrics.
July 5, 2006
Warranty Inspections: Crawford and Company, already a major player in claims administration services , and home inspections, wants to go deeper into the warranty business.
May 31, 2006
Warranty Software: Good planning pays off as Ingersoll-Rand converts its first, second, and third business units to a new Web-based warranty claims processing system. Now, as other departments eye all that warranty data, the company looks for better reporting and analysis tools.
February 28, 2006
Extended Warranty Association: A new trade group aimed at vehicle service contract administrators plans to focus on certifying inspectors and other business issues, leaving the lobbying and legal efforts to others. But is that enough to attract the big industry players?
February 22, 2006
Manufacturer's Extended Warranties: Although retailers dominate the business, a handful of manufacturers do very well for themselves in the extended warranty business. Now a major bank's insurance unit wants to help more of them to launch service plan sales efforts.
February 14, 2006
Extended Warranties: Now that Wal-Mart has finally jumped into the business, let's take a detailed look at how this seemingly minor source of revenue is in fact a major source of many retailers' profits.
November 1, 2005
Public Warranty: Of all the companies in the extended warranty business, most are either small units within very large companies, or they're family-owned or privately-held companies. Only one is publicly held, and lately that's been a problem for them.
November 16, 2004
The SAFE Guys: As with manufacturer's product warranties, the extended warranty industry is huge yet easy to take for granted. Two industry experts explain why they left the comfort of the insurance business to open their own extended warranty consultancy.
September 28, 2004
Microsoft Automotive and AWS Microsoft Automotive to enter the warranty claims processing business through partnerships with Active Web Services, Capgemini, and others.
August 10, 2004
Warranty Seminar: Last month, a business intelligence software developer sponsored a morning seminar on the topic of the TREAD Act and warranty claims. For those who couldn't make it, here's a brief overview of the proceedings.
July 27, 2004
Business Jet Warranties: Unlike the airlines, the owners of corporate jets expect the white glove treatment from manufacturers. While they'll gladly bring their jets to an authorized service center for warranty work, they'll never try to do their own repairs. And while they expect their planes to be fixed fast, they'll almost never have their own spare parts on hand.
March 9, 2004
Who Are You? Warranty Week editor asks readers to identify themselves and their places of business, and tabulates the results.
August 25, 2003