Archived Copies of Warranty Week

January 1, 2017 to today

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
The 80/20 Rule of Product Warranties: Almost 80% of all the warranty claims and accruals reported by U.S.-based companies come from only 20 companies. Upwards of 500 other manufacturers account for only 20% of the total. But the expenses of the largest warranty providers are also a higher share of their sales revenue.
November 16, 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
Midyear Computer Industry Warranty Report: Even though numerous industry players have been acquired or have gone private, the remaining manufacturers have continuously cut their warranty expenses from one year to the next. But then along came the iPhone, and now Apple's frequent ups and downs are dominating the industry's statistics.
November 2, 2017
Midyear Auto Warranty Expense Report: Though passenger car sales have slowed a bit from last year's record pace, there's no sign of a slowdown among truck makers or their suppliers. More worrisome is a slow but steady rise in warranty expenses that's been under way for several years, after more than a decade of gradual cost reduction.
October 26, 2017
Recreational Vehicle Warranties: If the old saying that no news is good news, then there's plenty of positive tidings coming out of the RV manufacturers. Homes on wheels, which fared much worse than either site-built homes or passenger cars during the last downturn, have nothing to say about the timing of the next one.
October 19, 2017
New Home Warranty Expense Rates: Last time there was a recession, the warranty metrics of new home builders flashed danger signals more than a year before it officially started. Currently, there's nothing to worry about, by the looks of the latest industry data.
October 12, 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
Worldwide Construction Equipment Warranties: With hard data covering almost three-quarters of the construction machinery sold worldwide, we manufactured an estimate of $2 billion for the entire industry's annual warranty costs. But we also found that sales are falling while warranty expense rates aren't changing much at all.
August 24, 2017
Construction Equipment Warranties: While most of the top industry players are diverse manufacturers of a wide variety of products, some make little besides construction and mining equipment. And these "pure plays" can provide us with clues about the typical warranty expenses of those manufacturers that don't include any details about their claims and accruals in their financial statements.
August 17, 2017
Implementing a New Warranty Management Solution  -- or Just Upgrading Your Existing Solution -- Can Make a Significant Improvement to Your Organization's Bottom Line.
August 10, 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
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
Worldwide Automotive Warranty Report: With hard numbers in hand for the warranty costs of roughly 80% of the world's car and light truck manufacturers, we set out to create estimates for the remaining 20%. And not surprisingly, we find that the highest warranty costs are in Europe and North America, with the lowest in Asia.
July 6, 2017
Asian Automotive Warranty Report: Honda had a bad year in 2016, and this year it was Toyota's turn to report dramatic increases in recall costs. They used to have the lowest automotive warranty costs in the world but now that title belongs to Hyundai, which has yet to see the impact of defective air bags or other rampant problems.
June 29, 2017
Automotive Supplier Recoveries: A decade ago, the largest OEMs devised new warranty policies that helped to shift more of their expenses back to their suppliers. But then in 2014, an increasing number of safety recalls raised their warranty cost back up, leaving both them and their suppliers at higher expense levels.
June 22, 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
New Home Warranty Report: With products such as single-family homes, it's possible to measure warranty accruals not only per dollar of revenue, but also per unit sold. And then it becomes clear which companies have mastered their warranty cost estimation process and which are still making it up as they go along.
June 8, 2017
Semiconductor Warranty Report: Though the companies making capital equipment that's used to fabricate and test semiconductors and printed circuit boards continue to pay more warranty expense than their manufacturing customers, the gap has narrowed considerably over time. Some companies have cut their expense rates in half.
June 1, 2017
Medical & Scientific Equipment Warranty Report: Anything involving lasers or X-rays seems to have higher warranty costs than other types of medical devices and scientific equipment. But the gap between them has been narrowing for years, and may soon disappear. Meanwhile, several major medical companies don't think that warranty expenses are worth the effort to report, despite rules saying otherwise.
May 25, 2017
Telecom Equipment Warranty Report: Claims and accruals have fallen dramatically in the past decade, both in terms of dollars and as a percentage of sales. Mergers and bankruptcies were a major factor, but so were cost-cutting efforts. Now, however, expenses are rising again and sales aren't, so expense rates are creeping upwards.
May 18, 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
Power Equipment Warranty Report: While the makers of electrical power generation equipment continue to adopt new storage technologies and new fuel sources such as solar and wind, the gap between the warranty expenses of the old and the new continues to narrow. But the makers of "green" and renewable energy equipment continue to set aside more money, just in case.
May 4, 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
Electronics Warranty Report: Although not as pronounced as in the automotive industry, and not as unseen as in the aerospace industry, there is definitely a gap in the high-tech sector between the warranty expense rates of OEMs and their suppliers. Makers of computers, telecom equipment, and medical devices have much higher warranty costs than disk drive or semiconductor manufacturers.
April 20, 2017
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
U.S. & European Auto OEM Warranty Report: While Volkswagen and Fiat have seen their warranty costs rise significantly in recent years, BMW, Daimler and Tesla have driven their expense rates down. And somewhere in the middle this year are Ford and GM.
April 6, 2017
Automotive Warranty Expense Report: While the individual manufacturers see their claims, accrual, and sales totals change up and down from year to year, some long-term trends are also evident. The carmakers are cutting costs the most and the longest, while the powertrain manufacturers are falling behind other types of suppliers.
March 30, 2017
Fourteenth Annual Product Warranty Report: Warranty expenses are down but sales are up, which means a lot of companies have learned how to improve their warranty processes, increase quality, and reduce costs. But the cost reductions have become less steady in recent years, as if there's no more progress to be made. Is that the case? Or is this merely a pause before the next breakthroughs arise?
March 23, 2017
Top 100 Warranty Providers of 2016: While we can't directly compare the warranty expenses of companies to each other, we can compare a company to itself over time, and can then make comparisons based on the rate of change. In doing so, we can spot the companies cutting their warranty expense rates significantly, as well as those whose warranty costs are beginning to spin out of control.
March 16, 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 Preview, Part Two: Given that so much of the knowledge and wisdom in the warranty management profession is passed on verbally, this annual gathering of product protection industry experts is an unrivaled opportunity to hear both vendors and their customers tell the stories of their journeys.
March 2, 2017
WCM Preview, Part One: Given that so much of the knowledge and wisdom in the warranty management profession is passed on verbally, this annual gathering of product protection industry experts is an unrivaled opportunity to hear both vendors and their customers tell the stories of their journeys.
February 23, 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