Warranty Week Newsletter Archives

Change Year: Date Order:

Twenty-first Annual Product Warranty Report:

Total warranty claims, accruals, and reserves increased among the U.S.-based manufacturers during 2023. Inflation has driven up the price of everything, including warranty work, but we see clear delineations among industry sectors. The vehicle and building trades sectors are seeing warranty costs grow, while the high tech sector is seeing a decline.

Warranty Consulting:

The Marsh warranty practice helps companies looking to launch protection programs do it right the first time.

Top 100 Warranty Providers of 2023:

About two-thirds of the top 100 U.S.-based warranty providers increased their warranty claims rate, accrual rate, and reserve balance in 2023. These unprecedented increases are mainly due to inflation, rather than huge rates of recalls or product failures. But a few companies did stand out as big winners and big losers in 2023, in the form of large increases and reductions in these three warranty metrics, compared to themselves in 2022.

Site-Built New Home Warranty Report:

Total warranty claims, accruals, and reserves continue to rise for the site-built new home industry. Some companies are struggling to predict their warranty costs and set aside a steady amount per home sold, while others are incredibly consistent.

Smallest Warranty Reserve Capacities:

The manufacturers with the smallest warranty reserve capacities represent several industries, including auto parts, building trade suppliers, manufactured and mobile homes, and semiconductors.

Largest Warranty Reserve Capacities:

The ratio between warranty reserves and total claims payments, which we call warranty reserve capacity, is always changing. And manufacturers in certain industries will have larger warranty reserve capacities, simply because they offer longer product warranties. This week we're looking at the companies with the largest warranty reserve capacities, and the highest standard deviations among these quarterly measurements.

Warranty Early Reporters:

While we await the rest of the U.S.-based manufacturers' annual reports, we're taking a look at the early results of companies that have already released their fourth quarter data. Overall, the warranty expense rates haven't varied much, showing that the increased warranty expense totals we've seen are in proportion to increases in revenue.

U.S. Auto Warranty Annual Reports:

Ford, GM, and Tesla all had a rough and costly year of warranty expenses and recalls. Their 2023 warranty expense data reflects this, as well as inflation and increased repair costs, resulting in the highest collective warranty claims, accrual, and reserve totals we've ever seen from these three manufacturers.

Warranty Adjustments:

When a company finds that its actual warranty costs are above or below its predictions, it makes a change of estimate and adds or removes funds from its warranty reserve. We identified the six largest warranty adjustments of recent years, and added them to each company's regular quarterly accruals, to paint a fuller picture that often reflects the hardship and unexpected costs of recalls.

Nine-Month Large Vehicle & Powertrain Warranty Trends:

Claims payments are up for all but one of the top twelve large vehicle manufacturers, and most increased their accruals too. In fact, four companies, Allison Transmission, BorgWarner, Winnebago, and Terex, all paid more in claims than they put aside in accruals, and relied on the warranty reserve fund to cover the difference. Inflation is driving up warranty costs across the board in the vehicle industry.

Largest Nine-Month Warranty Expense Rate Changes:

The majority of U.S.-based manufacturers keep their claims and accrual rates consistent from quarter to quarter, or see incremental variations. But a smaller minority see wild fluctuations in their warranty expense rates. This week, we're honing in on the biggest increases and reductions of the first three quarters of 2023, the most volatile on both sides of the spectrum.