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
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
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
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
Solar Power Equipment Warranties: First Solar and SunPower have emerged as major warranty providers, building megawatt power plants in the desert. And Tesla Motors, while not solar powered, has emerged as a major warranty provider in the "green" energy industry. They're still not as big as GE or GM, but they're no longer small either.
June 12, 2014
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
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
Handheld Warranty Costs: While RIM's costs rise, Apple's costs fall. And while other smartphone makers have reported high warranty costs, Nokia's are only half as high. Is there something about being small and smart that drives up warranty costs?
June 14, 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
Computer Warranty Report: The bigger the box, the smaller the warranty expense. And when phones get smart, and when computers get small enough to fit into pockets, warranty costs seem to grow proportionally. That's what the industry's warranty claims and accrual data, gathered over the past 8-½ years, seems to suggest.
September 29, 2011
Computer Warranty Report: After years of cost cutting, warranty expenses remained low last year and look to stay there this year, even as sales continue to rebound. Apple, meanwhile, is beginning to feel the effects of the increased warranty cost that comes in small packages.
April 21, 2011
Medical & Scientific Equipment Warranties: Though warranty costs have remained within a tight range for eight years, there's a definite seasonal pattern to the data that's tied into the school calendar. And though these equipment makers typically spend a small percentage of sales on warranty costs, some products have much higher averages.
December 16, 2010
Camcorder Shopping: All the major brands except Canon give only 90-day warranties on labor, making extended warranties an attractive add-on. But there are numerous small brands that give the full year on both labor and parts. Meanwhile, extended warranties are priced low by some retailers, while a few try to get more for the protection plan than they do for the product it covers.
December 5, 2007
Warranty Benchmarks: Graphs of all manufacturers' claims and accrual rates don't follow bell curves. They're Pareto distributions, where lots of companies spend small amounts on warranty and a few heavyweights spend a lot.
October 24, 2007
Warranty Benchmarking Survey: Though the sample size was small, the results were significant. And this is just the initial round of APQC's planned expansion into the benchmarking of warranty repairs and other after-sales services.
October 16, 2007
HVAC, Appliance & Building Material Warranties: Since so many manufacturers straddle the plumbing, appliance, and HVAC industries, we're profiling them together. But warranty occurs at very different rates for each product type. And some of the most expensive products from a warranty point of view seem to be small kitchen and personal grooming appliances.
May 22, 2007
Warranty Claims & Accrual Rates: Half the industry segments follow seasonal patterns, with claims and accrual rates peaking during the same quarter every year. Four segments are following downward trends while two are on upward slopes. But what's most surprising is how small the fluctuations have been over the past 15 quarters.
January 17, 2007
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
Don't TREAD On Me: Estimates of the cost of TREAD Act compliance vary all the way from the U.S. government's own $89 million figure up to a $1.7 billion estimate recently published by AMR Research. While small manufacturers continue to count their actual costs, the government continues to insist those costs will be close to zero.
November 3, 2003
Don't TREAD On Me: While the top tier of automotive manufacturers fumes about the burden of TREAD Act compliance, a group of small trailer manufacturers mounted a grassroots effort to gain an exemption for themselves from Congress.
October 27, 2003