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
Mize Merges With Syncron: What began as a discussion about how a warranty management and field service solution could be bolted onto an aftermarket service and parts management software platform has culminated in an international merger between an American and a Swedish software company.
August 19, 2021
Assurant Inc. During the Pandemic: With a major share of the insurance underwriting for both retail appliance, electronics, and mobile protection plans as well as for auto dealer's vehicle service contracts and ancillary plans, the company is a bellwether for a large portion of the extended warranty industry, both in the U.S. and worldwide. And some peculiar things happened to both its revenue and profit rates last year during the pandemic and the lockdowns that resulted.
June 17, 2021
Enduring Changes in the Post-Pandemic Warranty Industry: Key observations from an AmTrust roundtable discussion with service contract industry leaders Aleem Lakhani, Michael Frosch, Kenneth Mac, and Sreevathsa Prabhakar.
June 3, 2021
Apple's Warranties & Service Contracts: In its brand new annual report, the company details its declining product warranty expenses while providing financial clues that suggest its market-leading extended warranty program had a really good year.
November 5, 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
Louisville's Warranty Experts: Both GE Appliances and UPS Worldport are located there. Throw in nice weather, a good airport, and a central location, and you have all the ingredients needed to turn it into a major hub for warranty and service contract expertise.
November 14, 2019
Truck Extended Warranty Sales: New accounting rules require companies to disclose their "service-type warranty" sales. Last year, five of the top U.S.-based truck manufacturers sold more than $1.2 billion worth of extended warranties, a stunning 18% gain over 2017.
August 29, 2019
WCM Pre-Conference Workshops:  Warranty professionals heading to Orlando for the 15th annual Warranty Chain Management Conference could arrive a day early to attend any of six different workshops on topics such as fraud detection, claims handling, customer satisfaction, and how to launch or expand a commercial or consumer service contract program.
February 21, 2019
Service Contracts and the Magnuson-Moss Warranty Act:  This article, by two expert attorneys, is intended to help readers navigate the subtle boundaries between the Magnuson-Moss Warranty Act and the service contract laws of the U.S. states, and to help explain the key differences between product warranties, service contracts, and insurance.
February 7, 2019
Home Service Technology: How Smart is Your Home? The Top 5 Ways Technology Will Transform the Home Warranty Business
January 3, 2019
Apple's Warranties & Service Contracts: While AppleCare is still the biggest extended warranty program in the world, it hasn't grown much in years. And while Apple is spending more on product warranties than either GM or Ford, that's not growing either. No wonder investors are spooked by the company's future prospects.
November 15, 2018
B2B Service Contract Conference: Last year, a commercial service contract trade association was launched at the Nashville conference. This year, two half-day programs have been added to the main conference to delve into topics related to how commercial service contracts are priced, configured, and sold to businesses.
September 27, 2018
ServiceBench Signs HomeServe: When it came time to upgrade its field service management system, the home warranty company turned to Asurion's ServiceBench unit for a cloud-based service platform that could connect its customers, contractors, and service center team, helping them to make sure that the right contractor is assigned for the job and that they show up at the appointed time.
August 23, 2018
GE & UTC Service Contract Estimates: Their jet engine operations may generate billions a year in service contract revenue, as evidenced by the tens of billions of dollars in deferred revenue carried on their balance sheets. But without hard numbers to go by, we have to estimate the size of their protection programs.
August 2, 2018
Commercial Truck Service Contracts: At roughly one percent of revenue, commercial extended warranties for trucks represent more of a convenience for customers than a major additional source of profits for manufacturers. Still, we know they bring in more than a billion dollars a year just in the U.S., even though only a handful of truck manufacturers report the relevant metrics.
July 26, 2018
Extended Protection Plans:
Breaking Down Risk Management Options: Service contracts sold by dealers or manufacturers to buyers of commercial products such as construction equipment can increase resale value, raise customer loyalty, boost uptime, and lower operating costs. But before extended protection plan sales can begin, the advantages and disadvantages of various risk management options must be considered.
June 7, 2018
WCM Conference Preview, Part 2: Travel plans are being made for the 14th edition of this annual warranty and service contract industry conference, which opens in less than two weeks. The agenda this year is a mix of both returning favorites and new topics suggested by both presenters and attendees at past conferences.
February 22, 2018
WCM Conference Preview, Part 1: The workshops are filling up, and travel plans are being made for the 14th edition of this annual warranty and service contract industry conference. The agenda this year is a mix of both returning favorites and new topics suggested by both presenters and attendees at past conferences.
February 15, 2018
ServiceBench Signs Cross Country: While the appliance service contract and home warranty businesses have remained separate and distinct, the products they protect are frequently the same. Now, the crossover between the two is increasing, with home warranty companies linking to the network used by many service contract administrators, and retailers selling home warranties in their stores.
February 8, 2018
Service Contract Market Size: There are signs that the market is topping out at current levels, although home warranty sales continue to soar. Other types of protection plans, such as vehicle service contracts, mobile phone insurance, and extended warranties for brown and white goods, are no longer growing like they used to, though jewelry and furniture protection programs showed slight growth.
February 1, 2018
Update on the A-Team of Extended Warranties: In a new burst of merger and acquisition activity, two of the top players in the extended warranty and service contract industry are moving things around. Assurant is buying The Warranty Group, AmTrust is taking itself private, and it's selling half of Warrantech to private equity investors.
January 25, 2018
Commercial Service Contracts, Part 2: Though the terms extended warranty and service contract are used interchangeably, in a commercial setting a service contract can mean much more than an insurance-like agreement. It can include maintenance and product support, with a focus on response time and cost, and may have only incidental ties to the repair of defects or malfunctions.
January 18, 2018
Commercial Service Contract Association: Industry leaders have launched a new trade association for commercial service contracts, with the inaugural meeting scheduled for tomorrow morning. But unlike with product warranties, extended warranties, and protection plans aimed at the buyers of consumer goods, the boundaries of the commercial service contract industry are not as sharply defined.
January 11, 2018
Aviation Warranty Association: Commercial airline warranty managers met in Chicago to discuss issues with plane and parts manufacturers. Also, some tips on home warranty regulations, and links to a guide to how each U.S. state oversees consumer service contract companies operating within its borders.
December 14, 2017
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
Extended Protection Plans: Service contracts sold by dealers to buyers of products such as construction equipment can increase resale value, raise customer loyalty, boost uptime, and lower operating costs. But before extended protection plan sales can begin, dealers have several risk management options to consider.
November 30, 2017
Apple's Warranties & Service Contracts: Although it is one of the world's largest warranty providers and extended warranty administrators, both programs used to be even larger. Using figures from Apple's just-published annual report, we estimate the size of each.
November 9, 2017
Swappable Battery Service Contracts: Instead of wasting hours waiting for an electric car to recharge, why not design the vehicles to use swappable batteries? Though it may never be as quick as a NASCAR pit stop, it could take about as much time as pumping gas. And a new industry, based around the sale of energy in a rented "tank," could spread among dealerships, parts stores, and filling stations.
October 5, 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
The A-Team of Extended Warranties: Ten companies, whose names all begin with the letter A, control at least 57% of the $40 billion U.S.-based and consumer-facing service contract industry. Most are administrators and/or underwriters of the protection plans, but a few are electronics manufacturers and/or retailers.
September 21, 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
Extended Warranty Conference, Part 1: Several hundred professionals from the extended warranty and service contract industry are headed to Nashville to talk about how changes in technology and regulations will impact their businesses in the years ahead.
August 31, 2017
Cybersecurity Law: Legal experts say New York-registered service contract providers must take immediate action to comply with the state's new Cybersecurity Regulation before the looming deadline at the end of next month, and before the state's regulators levy heavy fines and penalties to send a message to the industry.
July 13, 2017
Warranty Analytics: One is an online service. The other is a suite of Salesforce components. Both are attempts by warranty management companies to package their vast expertise into easy-to-use and low-cost warranty analytics capabilities.
May 11, 2017
Service Contract Market Research: Protection plan buyers are more loyal to both the brand and to the retailer, according to results of a consumer survey commissioned by The Warranty Group. And they're also happier with their purchases than non-buyers.
March 9, 2017
WCM Workshop Schedule: Six half-day classes on topics of interest to warranty professionals and service contract practitioners are scheduled for Tucson in early March, during the day before the beginning of the main conference.
February 16, 2017
Service Contract Pricing: Appliances: While the typical appliance service contract costs roughly 14% to 16% of the price of the product it protects, there is an enormous amount of variation, depending on which administrator the retailer works with, how long the contract lasts, and whether the product is low end or top of the line.
February 9, 2017
Service Contract Pricing: Microwaves: Built like electronics but sold like an appliance, the microwave oven is a hybrid of two different product categories. And with service contracts costing almost 19% of the product's price on average, it also has one of the highest average costs of protection. And there's a big difference in the cost of protection plans for units priced at the high or the low end of the market.
February 2, 2017
Service Contract Pricing: Ranges: After looking at household appliances that clean clothes, wash dishes, and store food, we round out the major categories with a look at the classic range: a combination of a stove and an oven used to cook food. What do their service contracts cost? Does it vary by brand or product price?
January 26, 2017
Service Contract Pricing: Refrigerators: The bigger the refrigerator, and the more it costs, the lower the ratio between its list price and the price of protecting it for a given length of time. And the longer the duration of coverage, the more it will cost, though the industry-wide ratio isn't close to a straight line in terms of cost per year.
January 19, 2017
Service Contract Pricing: Washer/Dryers: While it costs a little more to protect washers than dryers, on a proportional basis it also costs less to protect expensive washers and dryers than low-priced units. And while none of the top appliance vendors want to sell one-year service contracts, plenty of retailers and administrators are willing to protect washers and dryers for five or even 10 years.
January 12, 2017
Service Contract Pricing: Dishwashers: As we begin our analysis of major appliance protection plans, some of the same patterns that we saw with consumer electronics are popping up. And there is an even greater range of pricing and plan durations.
January 5, 2017
Legal Opinions: Two attorneys from Locke Lord explain how third-party billing for service contracts may open the door for cellphone carriers to be regulated by the Consumer Financial Protection Bureau. And the executive director of the Service Contract Industry Council explains how his group works with regulators to fight against deceptive marketing practices.
December 29, 2016
Apple's Warranties & Service Contracts: Not only has the company grown into one of the world's largest product warranty providers, but it's also running one of the world's largest extended warranty programs. However, while iPhone sales were down by 12% in 2016, iPhone protection plan sales were down by even more. Is it the competition? Or are consumers buying fewer iPhone extended warranties from Apple?
December 15, 2016
Service Contract Pricing: Electronics: Though the overall average is 17%, there's a wide range of pricing variation based on the duration of coverage and the inclusion of accidental damage coverage. And then there are retailers and administrators that price high because they can. A simple shopping survey of product and protection plan prices reveals the difference.
December 8, 2016
Service Contract Pricing: SquareTrade: Next year, once Allstate completes its SquareTrade acquisition, we'll find out whether there's more value in its direct-to-consumers sales model or in its traditional retail relationships. But this year, though the company has a reputation for selling inexpensive product protection plans, we're finding that some of its retail partners are marking up prices significantly.
December 1, 2016
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
Service Contract Pricing: Game Consoles: Though not all electronics retailers sell them, video game consoles are a major part of the service contract industry. And because the top three systems now on the market are similarly priced, the differences in the pricing of the service contracts offered alongside them become all the more obvious.
November 10, 2016
Service Contract Pricing: Printers: Despite the well-known risks of printers breaking down through normal wear and tear, some administrators and retailers are willing to sell service contracts for them that last four or even five years. Prices vary widely, and some even cover accidental damage.
November 3, 2016
Service Contract Pricing: Laptops: Laptop service contracts, as a percentage of the price of the product they protect, are more expensive at the low end of the market and less expensive at the high end. But there is a very wide variation between the top and the bottom. Laptop service contracts can cost anywhere between 4% and 91% of the price of the computer.
October 27, 2016
Service Contract Pricing: Digital Cameras: Some service contract providers charge more than half the price of an inexpensive camera to protect it from drops and spills. Others charge less than the sales tax for service contracts that cover cameras selling for multiple thousands of dollars. There seems to be much less consistency in the pricing strategies for digital camera protection plans than there is for the products themselves.
October 20, 2016
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
Service Contract Pricing: TVs: Although the average price of a TV service contract is 17% of the TV's price, there is a tremendous amount of variation. One administrator wants $30 to protect a $400 TV while another wants nearly 2/3rds the price of a high-end Sony set for a service plan.
October 6, 2016
Extended Warranty Conference Overview: Nashville is once again the destination for the extended warranty industry's annual gathering. But this year, the day-and-a-half conference is supplemented by two additional half-days focused on the sales and marketing of service contracts.
September 22, 2016
GWSCA Conference Overview: With a theme centered around the role of warranty and service contracts in customer engagement, this year's annual meeting and conference runs from Wednesday afternoon to Friday at lunchtime.
September 15, 2016
Big Data at WCM: Rather than a data warehouse, which is built to spec and then filled in an orderly fashion, WCM keynote speaker Richard Vermillion wants to fill a "data lake" with information and then figure out how it might be useful. For warranty and service contract industry professionals, this will allow new sources of data to help analysts predict what happens to products in the field, and how and why they fail.
March 10, 2016
Warranty Workshops: In less than two weeks, a team of warranty and service contract experts are going to conduct six half-day workshops aimed at both basic and advanced practitioners of topics such as warranty metrics, analytics, legal issues, service delivery, cost-cutting, revenue-raising, and ultimately an improved customer experience.
March 3, 2016
Appliance Protection Plans: When it's all counted together, a huge amount of money is being set aside to pay for product repairs. Manufacturers finance their warranties and consumers can purchase additional protection through either service contracts or home warranties. It all adds up to about $6.77 billion spent last year on protection plans.
January 28, 2016
FAST Act Lightens Delivery of Privacy Notices Burden for Service Contract Industry: Service contract providers, already entangled by a web of state and federal insurance laws, must now navigate the ramifications of new privacy regulations. But if they call themselves financial institutions and follow some other rules, they could also free themselves of the need to send out annual privacy notices to their customers.
January 14, 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
The E-Warranty Act of 2015: The new law modernizes the options for compliance with the Magnuson-Moss Warranty Act and should also facilitate the e-delivery of service contracts. But other e-commerce laws state that parties must first agree to the use of electronic documents. The FTC must now write regulations that address these and other issues.
November 19, 2015
Warranty Training Seminars: Instead of multi-day training packages for warranty and service contract industry professionals, the GWSCA has scaled back its educational efforts to hour-long webinars and training seminars tacked onto the agenda for its annual conference next week.
September 10, 2015
WCM Conference Keynotes: The technology is changing. The need for repairs is changing. Even the concept of ownership is changing. And the way people shop is changing. Two industry experts describe how they see these changes impacting warranty and service contracts.
February 26, 2015
Service Contract Underwriters: Well over half the service contracts sold each year to consumers are backed by publicly-traded insurance companies based in the U.S. What follows is a list of their financial strength ratings and a look at their stock market track record since 2008.
February 5, 2015
The Post-Purchase Experience: More than just a buzzword, it's becoming an important part of customer loyalty. Consumers who feel their service contracts can provide a better level of customer service will buy them again, just for the convenience of knowing who to call when they need a repair.
October 23, 2014
Mid-Year Service Contract Report: Consumers will pay nearly $40 billion this year for product protection plans, despite the best efforts of the watchdogs who tell them not to. It's mostly for smartphones and passenger cars, though, because everything else is perceived to be disposable and not worth fixing.
October 9, 2014
Tavant Partners with Salesforce.com: As a platform heavy with sales force automation tools drives deeper into after-sales service and support, it gains a partner with a very deep base of knowledge in warranty management. And Tavant, gains a pathway into cloud computing and software as a service.
June 26, 2014
m-ize Transforms the Warranty Experience: For years, cutting costs has been the main focus of warranty departments. As the economy turns around, companies are now changing the focus of their warranty spending onto improving the customer experience. Warranty can drive sales by providing a better service experience to increase customer satisfaction, loyalty, and repeat purchases.
March 13, 2014
Service Contract Regulation Seminar: In addition to the customary annual update on service contract laws, regulatory actions and civil cases, attendees at the WCM Conference this year will get a detailed look at the CFPB and a snapshot of how service contract regulations work in Canada.
February 27, 2014
Vehicle Service Contract Conference: This year, it will be possible for an attendee at the WCM Conference to hone in on some high-level discussions about issues affecting the vehicle service contract industry. They used to do that in the fall at a show in Vegas, but that event has gone in a different direction.
February 13, 2014
Warranty Book List: On the occasion of the passing of a noted author of warranty management books, we take a look at the published output of him, his colleagues and others in the warranty and service contract industries.
December 5, 2013
Mobile Phone Service Contracts: Electronics retailers can't sell insurance, so instead they sell service contracts that cover just defects, malfunctions and some damage. But customers are realizing they also need loss and theft insurance for their smartphones, which only the wireless phone companies currently sell.
November 21, 2013
Mobile Phone Insurance Market Shares: The top four wireless carriers in the U.S. collect more than $7.8 billion in protection plan premiums from their customers, and top electronics retailers collect an additional $4.3 billion for mobile phone service contracts. A handful of administration and insurance companies work with them.
November 14, 2013
New Leaf Service Contracts: Smaller retailers looking to sell service contracts usually had to choose between running the program themselves or selling another company's self-insured product. Now, there's a company trying to make it as easy as possible for small retailers to sell fully-insured service contracts.
November 7, 2013
Mobile Phone Insurance: While most service contract providers have been able to expand service contracts to cover certain types of damage, only the wireless carriers have been able to bundle insurance policies that cover loss and theft with service contracts that cover defects and malfunctions.
October 31, 2013
Seagate's Data Rescue Service Contracts: Warranties and service contracts repair or replace the data storage hardware in computers and mobile phones. But they don't cover the data and files stored within them. But now, for a small fee, Seagate and its partners will provide a service contract for data recovery.
October 24, 2013
Appliance Service Contract Underwriters: The names in the terms and conditions of a service contract are seldom the same as the name of the parent companies. And then there are the holding companies and investment companies that own the parents. In the retail appliance realm, we found just 10 insurance companies underwriting all service contracts. Here's a profile of each, along with links to their ultimate parents.
October 17, 2013
Appliance Service Contract
Market Shares: Though the market has remained relatively flat for years, market shares are changing as online sales are gaining and new players are emerging. Still, six underwriters control 90% of the market share.
October 10, 2013
Extended Warranty Image Problems, Part 3: Does the industry need a spokesman to educate consumers about the value and convenience of service contracts? Or does it already have a spokesman that also acts as the industry's attorney? And if a new spokesman is needed, who will pay for what will be a costly and time-consuming ongoing expense?
October 3, 2013
Extended Warranty Image Problems, Part 2: More than a debate about terminology, what the industry needs is a spokesman (or woman) who can defend the value and convenience of protection plans. Service is becoming a major issue for both manufacturers and retailers, and letting attacks on the service contract industry go undefended is no longer acceptable.
September 26, 2013
Extended Warranty Image Problems, Part 1: Service contract professionals, their customers, and the media can't seem to agree on what to call these warranty extensions. And the terms the experts prefer to use are far from the most popular. Even the regulators aren't very consistent with their language and terminology.
September 19, 2013
Warranty Innovations Conference: Next week, the fourth annual edition of the Extended Warranty & Service Contract Innovations conference moves out of Chicago, site of the first three events, and into Nashville. Here are some of the expected highlights.
September 12, 2013
PCMI's Extended Warranty Management System: Service contract administrators and underwriters need software that helps them manage both claims and revenue. And increasingly, they need multilingual and multiple-currency systems that can travel with them as they expand internationally.
September 5, 2013
Food Service Equipment Warranties: The commercial appliances used in restaurants cost more to buy but less to keep in good working order. Over the past 10 years, the average warranty expense rates for professional food service equipment has been less than half as much as for home kitchen appliances.
June 13, 2013
Service Contracts & Repair Costs: In the ongoing clash between those who sell extended warranties and those who say take your chances, the odds of saving money depend upon the cost and likelihood of needing a repair.
January 10, 2013
Warranty & Mobile Apps: Android and Apple mobile devices, already a huge market for extended warranties and service contracts, are quickly becoming a platform for warranty professionals who spend a lot of time working away from the office.
October 18, 2012
Assurant Expert Services: While repairs are a huge part of aftermarket services, so are installations, assemblies, configuration and preventative maintenance. Assurant Solutions is putting them all under a single umbrella that it can offer to its retail clients who can in turn sell service to their end user customers.
August 30, 2012
Consumer Electronics Warranties: Most of the best-known brands are imports. Most of the domestic brands are made by computer, appliance or telecom companies. Most of the emphasis is on sales of service contracts. So how can we analyze just the product warranty expenses of U.S.-based consumer electronics manufacturers?
January 26, 2012
How to Buy Extended Warranties: Step One: Read the contract. Research the terms and conditions of the service contract while you compare the prices and features of the products themselves. Then use your common sense and Google to decide if the extended warranty offer is a deal worth adding, or if you should shop elsewhere.
August 25, 2011
WCM Conference, Part Three: The future of the consumer electronics industry was the subject of a panel discussion that brought together retailers, manufacturers, repair service providers, insurance underwriters and extended service contract administrators to talk about everything from OnStar to iPhone.
March 24, 2011
The Abt Experience: Not content to merely collect a sales commission and be done with it, Abt Electronics keeps tight local control over its extended warranties and service organization from a single location. And customer loyalty? We're talking customer love.
February 17, 2011
INSERT TITLE HERE NLA Circuit Board Repairs Offer Profitable Service Addition for Appliance Contractors
February 10, 2011
The First Service Contract: A GE appliance dealer sold it to a customer in Chicago nearly 77 years ago, along with a refrigerator that turned out to be highly reliable. Yet the same sales drivers used back then -- peace of mind, repair costs and technological worries -- still work today.
February 3, 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
Appliance Service Contracts: While hard data is difficult to find, one retailer discloses lots of details about extended warranty sales in its financial statements. But as detailed as these metrics are, they may not apply to other less forthcoming retailers.
January 6, 2011
Making Holiday Shoppers Happy with Extended Service Contracts: How to increase retailer extended warranty attachment rates in the midst of a holiday price war? With the 2010 holiday gift-giving season well under way, here are eight strategies to help retailers increase extended warranty sales.
December 9, 2010
Vehicle Service Contract Administrators: As we conclude our VSC industry tour, we take a look at the financial strength ratings of the underwriters, the end user revenue of the administrators, and the myriad of links they have with each other, with auto dealers, and with the vehicle manufacturers.
September 9, 2010
Vehicle Service Contract Underwriters, Part 2: Numerous corrections need to be made, and multiple explanations need to be given, before we can move on to the final phase: Tracking the administrators. And it's becoming obvious that the reason there's so little market research on the VSC industry may be because there's so many moving parts to consider.
September 2, 2010
Vehicle Service Contract Underwriters, Part 1: If you know how many vehicles were sold and how much insurance was purchased, you can make a pretty good guess of how much consumers have spent on vehicle service contracts. But who sold them? How much were they? Some answers follow.
August 26, 2010
OEM Warranty & VSCs, Part 2: As we continue our tour of the vehicle service contract industry, we find that some of the cars the contracts cover are being made better than before. Still, it's increasingly the fortunes of third party administrators and underwriters that will be most directly affected by the reduced need for VSCs.
August 19, 2010
OEM Vehicle Service Contracts, Part 1: The top brands of passenger cars frequently administer and also underwrite the vehicle service contracts their franchised dealers sell. But they prefer if not much is said about it publicly.
August 12, 2010
Extended Warranty Insurance Companies: All four of our imaginary investments are up, with AIG rising the least and Assurant rising the most. And now our hypothetical extended warranty stock fund has grown with the addition of four more insurance companies that also underwrite service contracts.
August 5, 2010
INDS Signs with Virginia Surety: One of the largest vehicle service contract administrators has selected one of the largest service contract underwriters to help it diversify and expand.
July 29, 2010
Top Auto Insurance Companies: One would expect a high correlation between those offering auto insurance policies and those offering vehicle service contracts or mechanical breakdown insurance to consumers. But Zurich is the only one with a major presence in both.
June 25, 2010
GMAC Service Contracts: While the huge downturn in GM's auto sales hurt GMAC's service contracts, what forced the finance company to seek a TARP bailout was a really bad bet on home mortgages. Now the government-owned company has become a bank and is pursuing non-GM dealerships.
June 17, 2010
Retail Auto Parts Warranties: While many of the major auto parts chains are willing to go above and beyond the warranties that manufacturers offer on products such as batteries, most are reluctant to begin selling service contracts. But at least one retail chain has taken that step, and has also begun to offer extended warranties on its own labor services.
June 10, 2010
Fleet Warranties: Among companies that operate fleets of hundreds or even thousands of vocational vehicles, service contracts are rarely bought. Some ask their manufacturers for longer warranties, but most prefer to fix their trucks and buses themselves. And what they like to outsource isn't so much the repair labor as it is the labor associated with warranty claims submission.
May 20, 2010
Motorcycle Service Contracts: As with passenger cars, the policies exclude consumables, accidental damage, and routine maintenance. And as is done with RVs, they are starting to cover perils such as being stranded far from home. But some say that takes them dangerously close to the line between service contracts and insurance. Others wonder if these new bells and whistles are all that necessary.
May 6, 2010
RV Service Contracts: Perched as it is at the junction of homes and vehicles, the RV industry has been hard-hit by the recession and the credit crunch. But the sellers of RV service contracts may have been helped by all that uncertainty, offering peace of mind to an industry full of turmoil.
April 29, 2010
Additive Product Warranties: They may have found a loophole that allowed them to evade most service contract industry rules, but they couldn't escape the wrath of the customers they swindled, the regulators they duped, or the competitors their antics tarnished. Now a consensus is forming around the idea that everybody should play under the same set of rules.
April 22, 2010
Service Contract Underwriters: The insurance companies that back service contracts are graded on their financial stability. And while the Detroit Three automakers and some of the other recipients of the TARP bailout billions get relatively low grades, most of the majors remain on the honor roll with an A- or better.
February 11, 2010
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
Vehicle Service Contract
Attachment Rates: Has the chaos of the Great Recession actually increased the appeal of vehicle service contracts? Auto dealers aren't selling as many as they used to, but for at least the past five years roughly one out of every three customers has bought one. And the recent trend seems to have been upwards, as unlikely as that sounds.
January 28, 2010
Vehicle Service Contract Industry: Consumers seem to prefer the term extended warranty. But industry professionals prefer the term service contract, even when they work for companies with the word warranty in their name. The problem is, there are at least three dozen other terms used to describe the product. Or is it a service? A service product?
January 21, 2010
Vehicle Protection Association: Although it would have been better to prevent the "expiring warranty" scam from trashing the reputation of the vehicle service contract industry, efforts are now under way to repair the damage by making direct marketers adhere to a code of conduct. In the UK, however, the code preceded the need, so there was no problem, at least in the vehicle service contract industry.
January 14, 2010
Expiring Warranty Companies: With Eagle Warranty closing its doors and US Fidelis halting its sales, the era of fast talk and easy money in vehicle service contract sales may be coming to an end. But they and others have left a giant mess that various attorneys general are only beginning to clean up.
January 7, 2010
Used Auto Warranties: Signs of life are beginning to appear in the used auto industry as partnerships are formed and annual sales increases are claimed. One of the latest deals is struck between the makers of electronic contract and tax form software and a veteran administrator of service contracts sold by used car dealers.
August 6, 2009
Selling Peace of Mind: With all the negative publicity generated by the "expiring warranty" telemarketing scam, these days it's the auto dealers that need some reassurance about the value of selling vehicle service contracts to consumers. Below is a list of some of the benefits of the different types of VSCs, followed by two different lists compiled by industry associations that can help consumers spot a scam before they buy into it.
July 16, 2009
NEW's Smart Procurement: By taking advantage of ServiceBench's connectivity with servicers and parts distributors, NEW is hoping to speed up repairs by helping servicers to find and order parts. The resulting reduction in turnaround time should make NEW's retail clients happier and its service contract customers less unhappy.
June 18, 2009
Warranty Service Providers: It's all mixed up. Retailers are selling products under their own brand names and manufacturers are selling their own service contracts. Bankruptcies have exposed how precarious product warranties can be, while insurance has demonstrated how extended warranties can survive even a liquidation. Perhaps it's time for OEMs to think about partnering with administrators and insurance companies?
June 4, 2009
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 Improvements: Clever companies are now looking beyond warranty, wondering what else they can do with their data to improve quality and service and further reduce costs. At the WCM Conference in a few weeks, several will report on the status of these efforts.
February 27, 2009
Warranty Optimization Workshops: Warranty data analysis can help you understand where you've been and where you're going. But can it also help you choose the right way to get there? At pre-conference workshops next month, two leading warranty optimization companies plan to show how both product warranty and service contract programs can benefit from the careful use of analytics.
February 12, 2009
Verizon's Extended Warranties: Carrier to leverage monthly billing and longtime customer relationships in a bid to sell service plans for TVs, PCs and phones plugged into its networks.
October 23, 2008
NEW Acquires ServiceBench: One is a leading service plan administrator and call center operator. The other is a major network hub for warranty professionals. Together they can set the standard for warranty claims processing, customer care, extended warranty administration, service dispatch, and end-of-life recycling.
January 23, 2008
DVD & Hard Drive Recorder Shopping: Recording television programs has never been easier, thanks to a new crop of DVD and hard disk recorders with capacities of two to 400 hours. But some carry only 90-day warranties, which makes service contracts even more appealing.
December 19, 2007
Extended Warranty Shopping: Everybody knows that prices vary from one retailer to the next, but the prices they charge for extended warranties vary even more. And while some retailers sell their products low and their service plans high, others discount both while a few overcharge for both. So while some bundles are rip-offs, others could be seen as compelling bargains.
November 28, 2007
Fulcrum Analytics: New software tools give warranty and service contract providers new insights into cost, revenue, and profitability. But those who use them won't talk about them, to preserve the competitive advantage these analytical tools give them.
October 10, 2007
New Home Warranties: While sales are declining, warranty accruals are declining even faster. Is it because of warranty cost cutting? Could it be better quality construction? Or are they simply putting less aside and hoping that nobody notices? Also, a letter to the editor about compliance with state laws on service contracts.
August 8, 2007
Extended Warranty Solution: ServiceBench aims new service contract solution at manufacturers, retailers, dealers and distributors of appliances, HVAC, fitness equipment, and other underserved markets. Goodman Manufacturing and Icon Health & Fitness are the first to sign up. Rainmaker Systems to help with telemarketing.
July 25, 2007
Warranty Conference Exhibitors: In between all the keynote speeches and panel discussions in Tampa this week, WCM attendees will have an opportunity to take a look at the offerings of a diverse cross section of warranty software and service providers.
March 13, 2007
Warranty Conference Keynotes: Globalization is already a major trend in warranty service provision, according to WCM Conference keynote speakers from Solectron and Lenovo. Next month, they'll tell the Conference that what's happened to them is what may happen to everyone else soon, as mobile phones and laptops amplify global demand for warranty service -- turning next week into next-day.
February 14, 2007
Service After Sales: Getting the biggest bang for your buck in
after-sales solutions through benchmarking.
December 5, 2006
Extended Warranties: Consumer Reports took their best shot. Now the industry has responded, citing the value, price, convenience and savings of time and money as some of the benefits of enhanced service plans.
November 29, 2006
Extended Warranty Pricing: Retailers charge a premium of anywhere from 1.2% to 36% for a Canon EOS 30D extended warranty, and anywhere from 5.6% to 43% for a Panasonic 42" plasma TV service plan. With Target now entering the market, service plan prices will be under increasing pressure.
October 24, 2006
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
Shadow Drivers of Warranty Cost: Survey data suggests that some auto service technicians are wasting their time by replacing the wrong parts and perhaps too many perfectly good parts because they don't have access to the right information.
June 13, 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
Fixing Computers: If it ain't broke but it won't work, making a warranty claim won't fix it. But some companies are now hiring "geeks" to sell PC tune-ups, or they're giving away free advice with their service plans, to help customers do everything from removing viruses to installing wi-fi modems.
January 31, 2006
Extended Warranty Income: Though most extended warranties are sold by retailers, a few computer manufacturers continue to make a killing by selling their own service contracts. Extended warranties can account for a significant slice of profits, and sometimes can actually be the difference between profit and loss.
October 25, 2005
Warranty Management Conference: If the WCM show in March drew heavily from Silicon Valley, last week's warranty show in Chicago attracted a mainly Midwestern crowd of manufacturers, who came to hear about the best practices of their peers. What they heard instead was lots about service and quality and other topics at the periphery of warranty.
September 27, 2005
Warranty Laws: Though the federal government has been quiet, there are plenty of laws and regulations governing product warranties and service contracts at the state level.
August 2, 2005
Aftermarket Financial Products: Auto dealers who reinsure their vehicle service contracts are pleased by a recent IRS ruling.
July 6, 2005
Warranty Conference,
Part Six: Warranty fraud is a big problem for vehicle service contract administrators. But surprisingly, the biggest culprits are usually the mechanics and repair shops, not the consumers.
April 12, 2005
Introducing Warranty Work: New service aimed at job seekers added to the Warranty Week website.
February 8, 2005
Integrated Warranties: Assurant Solutions, along with partner General Electric, has quietly built itself into one of the largest and most diversified extended warranty service providers.
December 14, 2004
Unusual Warranties: Ever since it pioneered the sale of extended warranties for VCRs almost 25 years ago, VAC Service Corp. has boldly gone where no administrator has gone before.
December 7, 2004
Warranty Outsourcing: For one service contract administrator, discretion is a virtue. Some clients don't want anyone to know they outsource claims administration. Some don't even want their names to appear in print.
November 23, 2004
Service Dispatch: With home appliances, warranty work almost always involves a housecall. Claims administrator ServiceBench has turned the dispatch of service technicians into a strategic advantage.
November 3, 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
Extended Warranties: The default of Warranty Gold Ltd. on the heels of the collapse of its Cayman Islands-based underwriter puts into question whether online sales of vehicle service contracts are worth the risk, and whether the risks were underpriced.
December 1, 2003
Guarantees, Customer Service and Chips? How RFID Can Transform
the Warranty Industry
September 2, 2003
Warranty Services: While most of the service providers in the warranty industry focus exclusively upon the sale and administration of extended service plans, a handful of intrepid companies have outsourced product warranty claims processing for manufacturers in the consumer electronics industry, where repairs can be performed by any of tens of thousands of service centers.
August 11, 2003
HP Integrates the Compaq Product Line, and Unites its Warranty and Service Upgrade Options. But extended warranty revenue isn't what it could be, and buyers facing too many choices may instead be choosing to do nothing.
May 19, 2003
Don't TREAD On Me: Part 2: Service providers and software vendors assess the costs and benefits of TREAD Act compliance.
April 7, 2003
Meet the SCIC:  The Service Contract Industry Council fills the role of lobbyist and extended warranty industry watchdog.
March 3, 2003