Archived Copies of Warranty Week

December 2002 to Today

Warranty Claims & Reserves, Part 2: The electronics sector tends to have shorter warranties than other sectors such as vehicles. Yet their warranty costs have ranged all the way up to four percent of sales. And while the average size of their warranty reserves is on the small side, some industry segments keep very large balances.
February 13, 2020
Hornbeam Insurance Targets Small-Scale Deals: After all the recent industry consolidation, just a handful of very large insurance companies dominate the service contract industry. And their retail and manufacturing clients also tend to be large companies, leaving an opening for an insurance underwriter aiming for small-scale deals.
November 21, 2019
Construction Equipment Warranties Worldwide: Unlike the automotive or civil aviation industry, a large chunk of the construction equipment industry worldwide does not report its warranty expenses. Still we did our best to fashion an industry estimate for their warranty expenses, relying on industry sales data to help plug the gaps.
October 24, 2019
U.S. Auto OEM Warranty Expenses: Now that the second-quarter financial reports are all in, we take a look at the warranty metrics of the U.S.-based industry that manufactures cars, trucks, buses, and all sorts of other vehicles, both large and small. And while the overall totals and averages didn't shift much, some companies saw big changes in their warranty costs.
September 5, 2019
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
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
Service Contract Pricing: Wi-Fi Doorbells: One of this holiday season's hottest products is likely to be those video doorbells that let homeowners see who's knocking even when they're away. But they're so new to the market, the technology is so unproven, and the risks are so unknown, that a large part of the service contract industry seems reluctant to offer protection plans for them.
November 17, 2016
New Warranty Providers: Before warranty management became a major undertaking in recent years, we suspect that even some large manufacturers didn't do a very good job of keeping their warranty expenses stable and steady. They learned on the job, without the benefit of metrics or industry benchmarks. But they did so without any outsiders able to see the numbers, a luxury that new manufacturers don't enjoy.
June 16, 2016
Service Contract Insurance Stocks: While service contract underwriting is only a small part of the insurance industry, it's a large part of the revenue stream of a handful of insurance companies. Here are the stock price and dividend yields of eight of the largest from May 2008 until today.
December 3, 2015
Home Appliance & HVAC Warranty Report: There are a few very large companies with operations in multiple industries that make it difficult to examine just the warranty expenses of the major appliance and HVAC companies. But if we set them off on their own, we can calculate industry averages for the expenses of others.
June 4, 2015
Computer OEM Warranty Report: As the industry shifts from desktops to laptops to smartphones, warranty expenses rise as the form factor shrinks. And after decades of competition, a few large players with huge warranty operations are left where once there were dozens of manufacturers.
April 16, 2015
Auto Parts Supplier Warranty Report: Turns out it's the large truck and bus manufacturers and their engine, axle and transmission suppliers who haven't done much to reduce their warranty expenses over the past decade. Passenger car makers and suppliers of auto parts besides drivetrain components have done a much better job of cutting costs.
April 24, 2014
Large Vehicle Warranty Report: There's only a very narrow gap between the warranty expense rates of large vehicle manufacturers and their suppliers. And while some manufacturers are reducing their warranty costs, many are simply returning to the expense rates they've had for most of the past decade.
January 16, 2014
Dell's Extended Warranties: Though its hardware sales have flattened, the importance of Dell's extended warranty program continues to rise. While a few years ago it was twice as large as the product warranty operation, now it's four times larger. And it accounts for a rising percentage of the company's total revenue.
January 24, 2013
Large Vehicle Warranties: Claims rates spiked during the recession, but returned to normal soon after. For some of the OEMs, however, rates continued to drop as warranty processes were improved. The result is some of the lowest expense rates ever in the first half of 2012.
August 23, 2012
Warranty Adjustments, Part 2: In the past few years, a small group of companies has made repeated and relatively large upwards adjustments to their warranty reserves. Are they simply bad at predicting the future? Or have they found a way to make their warranty costs look lower than they really are?
November 3, 2011
Warranty Reserve Levels: Most large companies seem to pick a size and stick to it, even as sales and claims vary. Whether measured in dollars or as a multiple of claims paid per month, the size of most of the largest warranty reserves has changed very slowly over the past four years.
January 30, 2007
Product Warranty Spending: With most of the third quarter financial reports behind us, it's looking like warranty spending is up only slightly in 2006. But the changes at some of the top warranty providers are very large, in both dollar and percentage terms.
December 12, 2006
Top 50 Warranty Providers: While most large manufacturers saw warranty claims rise in 2005, most also saw sales gains that helped relieve the pain. Even GM and Ford saw only modest upticks in the percentage of sales they pay in claims. And some such as Boeing saw claims plummet.
April 19, 2006
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 Warranty Cushion: Very large companies put aside proportionally more to pay warranty claims than either mid-sized or small companies, while very small companies allow their reserve fund ratios to rise and fall. The difference between them is their skill at the arts of warranty estimation and accruals.
June 8, 2004
Stadium Warranties: Like any other large construction project, sports stadiums come with product warranties. Just because there's no warranty registration card in the box doesn't mean that the builders don't face warranty claims from stadium owners. Two examples follow, from Seattle and Houston.
February 17, 2004