Archived Copies of Warranty Week

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January 1, 2021 to today

Worldwide Jet Engine Warranty Report: Though some of the biggest manufacturers in the industry are also in many other lines of business, the warranty expense rates of the "pure play" jet engine makers remain close to industry averages. And while COVID grounded many commercial airliners, it didn't decimate the jet engine industry as badly as one might have guessed.

Worldwide Aviation Warranty Expenses: Although the world changed nearly instantly when the pandemic began, there's a lot of inertia in the commercial airline and business jet industries. So although the passenger count plummeted, the number of flights declined more gradually, and the warranty expenses even slower. Some even saw their warranty costs rise, while others recovered from past predicaments.

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.

American Home Shield During the Pandemic: While sales of existing homes dipped during the worst of the lockdowns, they soared for the rest of last year. But while home warranties have historically been closely tied to the sale of existing homes, American Home Shield has moved on to selling the annual policies directly to homeowners staying put, and then encouraging those homeowners to renew year after year.

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.

European Automaker Warranty Expenses, Part 2: In this latest part of a worldwide roundup of automaker warranty expense totals and averages, we find that VW has always had the highest costs, while the French companies have always had the lowest. This doesn't correlate well with either customer perceptions or reliability trends, but facts are facts, while opinions are subject to bias (and advertising).

European Automaker Warranty Expenses, Part 1: Six out of the seven top car manufacturers based in Europe have delivered their annual reports detailing their 2020 sales and warranty expenses. All saw sales declines but some actually increased their warranty expenses last year.

Polaris Warranty Program Faced Significant Challenges: How After, Inc. saved Polaris from a 34% annual premium rate increase (which would have had significant impacts on their warranty program) and ultimately helped them create their own warranty company.

New Home & Building Materials Warranty Report: What you won't see in this week's collection of warranty expense reports are soaring or plunging warranty metrics. Most of the building trades' warranty expenses were fairly stable in 2020, with those metrics generally rising or falling by 10% or less. But just as there are exceptions to every rule, there were also a handful of big moves up and down last year.

US Computer Industry Warranty Report: Despite the pandemic and the lockdowns that followed, U.S.-based computer manufacturers continue to reduce their warranty expenses from one year to the next, as they have since 2003. And while some of their suppliers had a bad 2019 in terms of warranty cost increases, in 2020 most of them managed to reduce warranty costs proportionally to sales.

HVAC & Appliance Warranty Report: Warranty costs and expense rates remained fairly stable for the HVAC manufacturers but were much less so for the appliance makers. But the real surprise is how late in the year the effects of the pandemic lockdowns seem to have been felt. Instead of a really bad second quarter, these companies saw a slow decline from one end of the year to the next.

US Automotive OEM & Supplier Warranty Report: Because of the way their warranties are structured, car manufacturers have the highest warranty costs and their suppliers have the lowest. Truck manufacturers and their engine suppliers, however, have much closer expense rates. But the pandemic seems to have upset these patterns considerably.

Warranty Expenses vs. Product Sales & Net Income: We're adding a new metric into the mix: net income. When manufacturers boost warranty accruals, net income suffers. And when warranty expenses drop, net income rises. But is there really a correlation between net income and warranty accruals? Or perhaps warranty reserves and net income?

Medical & Scientific Equipment Warranty Report: In the year of the pandemic, nothing seemed to happen as expected. Sales were up but warranty expenses were down, especially during the tumultuous second quarter. And some warranty expenses seem to have been shifted from early to late in the year, by both manufacturers and their customers.

Eighteenth Annual Product Warranty Report: When the pandemic began a year ago, shopping and work patterns changed radically, as many people found it hard to leave their homes or get to work. One would have expected a deep dive in warranty claims early on, but there was an even deeper drop in warranty accruals in the middle of the year, and a much higher makeup effort towards the end of the year.

Top 100 Warranty Providers of 2020: As we've done for the past 18 years, it's time to compare the most recent warranty metrics of the largest warranty providers in the U.S. to their year-ago warranty metrics, to see which of them have most successfully reduced their warranty costs.

New Home Warranty Report: Because new home builders were so thoroughly mauled by the effects of the Great Recession, one would think they would also have suffered greatly during the pandemic. But one would be wrong, because sales are up, and warranty expenses have more or less kept pace.

RV Warranty Update: Severely damaged during the Great Recession, the RV industry actually grew last year, and the survivors of that downturn a decade ago have also learned how to keep their warranty expenses under control, despite the health emergency. Winnebago, in fact, raised its warranty accruals in 2020 by exactly the same proportion as sales.

Truck & Heavy Equipment Warranties: As the lockdowns grew, some manufacturers reduced their warranty accruals drastically in the spring of 2020, but claims remained about the same anyhow. Some got it right, but most reduced their accruals by too much, while a few cut accruals even though sales rose.

February 25, 2021

Detroit Auto Warranty Update: It was supposed to be a down year, with car sales down and warranty expenses down also. The first part came true, and warranty work was way down last spring, but the latest financial data from the top U.S.-based automakers has warranty costs soaring late last year.

February 18, 2021

Extend Partners with PCMI: The way they've implemented their administration system allows online merchants to add protection plan programs to their websites in a matter of days. Hundreds of retailers have already done so, including Peloton, Advance Auto Parts, Logitech, and iRobot, plus some that are no bigger than a mom-and-pop storefront on the Shopify platform.

February 11, 2021

Warranty Early Reporters: Because some companies end their fiscal years months before December 31, they also report their warranty expenses a bit sooner than most. So we've collected warranty expense data from 18 early reporters in 10 industries, representing about a third of the U.S. total.

February 4, 2021

Warranty in the Biden Administration: A new president from a different party brings with him not only a radically new set of policies, but also a completely new batch of policymakers. Though barely a week old, the new administration has already filled many of those job openings, and has already signaled some of its top priorities.

January 28, 2021

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