Archived Copies of Warranty Week

December 2002 to Today

Nineteenth Annual Product Warranty Report: While the erratic nature of accruals continued in 2021, claims totals remained stable. But warranty reserves hit a new record high late in the year, and expense rates briefly set a new low record early in the year. Manufacturer's warranty expenses are sorted into 18 industries and three major sectors: vehicles, electronics, and building trades.
March 24, 2022
Managing Servicers and Dealers with Data: After, Inc. uses state of the art modeling techniques combined with industry know-how to help manufacturer's navigate the sometimes challenging relationship between manufacturers and TPAs with servicers and dealers. Implementing cost control changes with minimal friction is the goal.
March 1, 2018
Aerospace Warranty Expense Report: Because one major airframe manufacturer has now separated its warranty and extended warranty accounts, the aerospace industry totals and averages are in disarray. However, many OEMs and suppliers continue to cut their warranty costs, setting new record lows for their expense rates.
April 13, 2017
Service Contract Pricing: Blu-ray Disc Players: The price of the product varies tremendously among top retailers. And so does the price of the protection plans they pair with these units. Some plans are priced low because they don't start coverage until the manufacturer's warranty ends, and they don't cover accidental damage. But others vary for more mysterious reasons.
October 13, 2016
Microsoft Complete & AmTrust: Rather than keeping it in-house as they added more hardware to their product line, the manufacturer partnered with an insurance company to launch a suite of protection plans globally. And as the insurance company learned to work at the same Internet speed as the manufacturer, it also learned to love completely new product categories for which there's no loss cost data to help them.
December 17, 2015
Top Warranty Acquisitions: Every once in a while, a manufacturer or retailer is acquired and ceases reporting its warranty expenses, while the acquiring company reports the amount of warranty reserves it gained through the purchase. What follows are some of the largest transactions of and by U.S.-based warranty providers in the past 18 months.
November 12, 2015
U.S. & Asian Auto Warranty Report: Almost every passenger car manufacturer is reporting rising warranty expense rates, thanks to soaring recall costs. But while some OEMs are seeing their costs per unit rise by a third or even by half, a few are reporting only small increases.
July 16, 2015
Manufacturer's Warranty Conference: More than anything, the WCM Conference is a place for manufacturers to meet and talk about problems and projects -- to see what everyone else is up to. Beginners learn from experts, and the experts learn from each other.
February 20, 2014
Extended Warranty Conference: The WCM Conference provides both basic and advanced presentations about both manufacturer's warranty and extended warranty issues. So how can one person see it all? This week, we look at the sessions most appealing to extended warranty professionals.
March 7, 2013
Warranty Conference: Opening in two weeks, the WCM Conference provides both basic and advanced presentations about both manufacturer's warranty and extended warranty issues. So how can one person see it all? This week, we look at the sessions most appealing to manufacturer's warranty professionals.
February 28, 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
Solar Warranties, Part 3: What happens if my manufacturer goes under? Insurance carriers may have an answer for that question, both as backers for lengthy manufacturers' warranties and as underwriters for extended warranties. Homeowners want peace of mind and so do the investors behind the huge projects.
December 15, 2011
Sports Equipment Warranties: Though the uniforms and hats might be apparel, the equipment used for many team sports and outdoor activities carries product warranties. More importantly, the companies making the gear manage those warranties with accruals and warranty reserve funds, just like any other manufacturer.
August 4, 2011
The ServiceBench Legacy: In the household appliance industry, it's more or less assumed that warranty and service contract claims data will cross the ServiceBench network. In most other industries, each manufacturer and third party administrator has its own network, and its own claims submission format.
January 13, 2011
OEM Extended Warranties: Working with a manufacturer to sell service contracts is a little different from working with a retailer. The OEMs need more help with sales and marketing, and they want more failure data analysis to help them with product quality and parts planning. They'll also need just as much help as the retailers with risk management, compliance, and regulatory issues.
May 28, 2009
Warranty Insurance: Properly insured and administered, an extended warranty can survive the bankruptcy of a retailer, dealer, or manufacturer. And in cases where customers doubt the survivability of a manufacturer's product warranties, insurance can reduce uncertainty and build confidence. Could this also work in Detroit?
May 21, 2009
Warranty Benchmarks, Part Two: Big companies really do pay more. The larger the manufacturer, the more warranty claims they pay. And in both the automotive and computer industries, OEMs tend to pay more claims than their parts suppliers.
October 31, 2007
CD & DVD Warranties: Only Sony is willing to back its optical disc products with multi-year warranties, and only its high end units benefit from the five-year coverage. Everyone else issues manufacturer's warranties of one year or less.
August 29, 2006
Warranty Claims Automation: For a motorcycle manufacturer and a home appliance manufacturer, it wasn't so much that their warranty systems were broke or that their costs were rising. It was just that their old warranty processes were inefficient and couldn't keep up with company growth.
April 4, 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
Automotive Warranties: As seen by its third quarter financial statements, Ford is catching up to GM, both in terms of revenue and warranty spending. Ford has now become only the second American manufacturer to ever pay out $1 billion or more in warranty claims per quarter. Meanwhile, other U.S.-based vehicle manufacturers have their own warranty ups and downs to report.
November 15, 2005
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
Setting Warranty Policy for Products That Generate Annuity Streams: Most warranty-management analysis concerns warranty as cost, the effect of warranty on customer satisfaction, or the signaling impact of warranty on customers. This article describes a study where the focus was not on the product under warranty, but rather on the effect that warranty length might have on the sales of related peripherals and supplies. These sales generate annuity streams for the manufacturer as long as the product remains in operation. However, cost savings from a shorter warranty period must be weighed against potential lost profit from reduced annuity streams. A shorter warranty policy might cause products to drop out of active use sooner, and the cost savings from a shorter warranty policy therefore might be outweighed by the lost annuity profits.
July 13, 2004
Warranty Reserves: While the average manufacturer spends 1.9% of product revenue on warranty claims and keeps a little over a year's worth of funds in reserve, each industry is different. Computer manufacturers and automakers fund their warranty programs at different levels than telecom or aerospace manufacturers. But in any group, as with any trend, there's always the odd man out.
April 6, 2004