Archived Copies of Warranty Week

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December 2002 to Today

Worldwide Auto Warranty Expenses: Most auto manufacturers have filed their latest annual reports, so the totals are in for 2021: $45.9 B in claims paid, a 2.4% claims rate, $54.0 B in accruals made, a 2.8% accrual rate, $128.4 B in reserves held, and $653 in accruals made per vehicle sold. Claims and accrual totals changed little last year, but because sales rebounded in 2021, the expense rates fell.

October 6, 2022

European Automaker Warranty Expenses: Following the merger of FCA and PSA, we're down to just five major automakers in the euro zone: Stellantis, VW, BMW, Mercedes, and Renault. And now that all five have filed their annual reports for 2021, it's time to take a look at their warranty expense reports for the last five years.

Nineteenth Annual Product Warranty Report: While the erratic nature of accruals continued in 2021, claims totals remained stable. But warranty reserves hit a new record high late in the year, and expense rates briefly set a new low record early in the year. Manufacturer's warranty expenses are sorted into 18 industries and three major sectors: vehicles, electronics, and building trades.

Annual Truck, RV & Car Warranty Trends: Throughout the automotive industry, sales revenue was generally up from a terrible 2020, but warranty expenses were either down or did not rise as fast as sales. The result was a drop in claims as a percentage of sales for 10 of the 12 companies we're tracking in this week's newsletter.

Warranty Chain Management Conference: In the middle of the summer, in the middle of a pandemic, on the strip in Las Vegas, the annual gathering of the warranty management industry will reconvene after spending a year online. Insurance, telematics, sustainability, and automation are among the major topics on the agenda.

August 26, 2021

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.

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.

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.

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

Worldwide Auto Warranty Expenses: Now that most of the world's automakers publish their warranty expenses in their annual reports, it is possible to tally a global total for the industry. In 2019, claims were up but accruals and reserves were down, as were the number of vehicles sold and the product revenue they brought in worldwide.

September 10, 2020

Seventeenth Annual Product Warranty Report: For a variety of reasons, claims and accruals continue to grow in the vehicle sector and shrink in the electronics sector. But sales have grown faster, so the overall share of manufacturing revenue going towards warranty expenses remains below 1.5%. Warranty reserves, meanwhile, came close to setting a new high water mark late in 2019, after years of declines.

Sixteenth Annual Product Warranty Report: Warranty costs are rising but sales are rising faster, meaning that the percentage of revenue consumed by warranty expenses remains at the low end of a decade-long decline. But can expense rates go even lower, or are we at the bottom now? A look at the totals and averages in 2018.

WCM Opening Keynotes & Closing Panel: For the 15th time, warranty industry professionals are heading to the annual WCM Conference, convening this year in Orlando, Florida. Over the course of three days, industry thought leaders are scheduled to delve deep into topics such as warranty fraud and the Internet of Things.

February 28, 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

Early Look at Year-End Warranty Data: The Hewlett-Packard family of companies has filed their annual reports, as have a few others such as Deere and Navistar. While companies whose fiscal years end in December are just beginning to publish their warranty expense reports this week, many others with different fiscal years have already released the data.

February 14, 2019

The State of Warranty Chain Management: Results of annual survey suggest the global warranty services market appears to be moving toward a more expansive period of growth in 2019.

January 10, 2019

Honda & Toyota Warranty Report: Both companies are recovering from some bad years in terms of warranty costs: Honda in fiscal 2016 and Toyota in fiscal 2017. But according to the figures in their brand new annual reports for the just-finished year of fiscal 2018, both companies are now on the mend, with warranty costs that are still unusually elevated, but not as high as they were a year or two ago.

The Global Warranty Services Community Is Reflecting a Return to Growth -- and Profitability!: After conducting its fourth annual Warranty Chain Management Benchmark Survey, Strategies For Growth president and principal consulting analyst, Bill Pollock, has put together a results package consisting of an Analysts Take paper, a webcast and a WCM Conference workshop. The webcast will be hosted by PTC Warranty and Contract Management on May 24, 2018.

Fifteenth Annual Product Warranty Report: All the metrics are down this year, including product sales. Some companies continue to cut their warranty expenses by huge amounts, producing better products with lower failure rates. But others are getting better at shifting more of their warranty expenses back onto their suppliers.

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

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

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

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?

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.

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

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

Thirteenth Annual Product Warranty Report: As the latest charts clearly show, American manufacturers are spending less on warranty than they used to. But is it because of better products, less costly repairs, or fewer sales? Now that the 2015 warranty expense data collection is almost complete, it's time to figure out why claims and accruals are declining.

Top 100 Warranty Providers of 2015: Most of the major warranty providers have published their annual reports in the past few weeks. By comparing their most recent warranty claims, accrual, and reserve metrics against the same expense figures from a year ago, we can make a series of top 10 lists of the most improved and the most injured warranty providers.

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

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

Twelfth Annual Product Warranty Report: Warranty expenses are once again rising and so are the associated expense rates. Much of that has to do with the increased cost of passenger car recalls, and some of it is caused by the soaring sales of smartphones. But could it be that some of the most successful warranty cost-cutters have let things slip back a little recently?

Early Look at Annual Warranty Data: About half the big companies have now reported their year-end 2014 warranty expense data. And while little has changed for most of them, a few are now getting back to normal after seeing expense rates soar in 2013 and earlier last year.

February 19, 2015

Top International Warranty Expense Reductions: While HP saved itself a billion dollars a year, two German carmakers have saved themselves twice as much. Three others have cut their annual claims payments by hundreds of millions of dollars a year in the past decade.

January 22, 2015

Top Warranty Expense Reductions: Using a list of just the top 200 warranty providers, we found one company whose warranty managers have cut costs by a billion a year within a decade, two more that cut hundreds of millions a year, and five that cut tens of millions a year from their employers' annual claims cost. And there were 16 more that deserved honorable mentions for their efforts.

January 15, 2015

Eleventh Annual Product Warranty Report: While some manufacturers are having trouble with product reliability, others are seeing their warranty expenses rise simply because they're selling more product than ever before. Case in point: the new holder of the title of world's largest warranty provider.

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

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

Farm & Lawn Equipment Warranties: Six months after the peak in sales comes the annual peak in warranty expenses. And while some companies take a pay-as-you-go approach, others have mastered the annual cycle to such an extent that their accrual rates hardly budge from one season to the next.

Tenth Annual Warranty Report,
Totals & Averages: The automotive manufacturers are cutting their warranty expenses while the computer makers are seeing higher costs. But put them together, and they're paying the smallest percentage of their revenue ever for warranty work on their products.

Apple's Extended Warranties: Every once in a while, someone sues Apple over its sales of extended warranties. But they never quantify the amount of money involved. Turns out, it's huge, based on some assumptions we made using figures from the company's own annual reports.

January 17, 2013

European Auto Warranties: Their annual reports tell a simple story: Daimler and BMW are reducing their warranty costs. VW is doing just fine. And Fiat is now absorbing the warranty costs of Chrysler.

Ninth Annual Warranty Report,
Totals & Averages: Warranty expenses rose in 2011, as the recovery continued to take hold. But sales grew a bit faster, and the percentage of revenue used to pay for warranty work fell to record low levels.

Farming & Mining Equipment Warranties: Some of the companies whose heavy duty equipment is used to move the earth exhibit an annual pattern closely tied to the growing season. Others have seen the same recessionary rise in claims costs as the passenger car companies. But a few have been able to consistently reduce their warranty expenses across all cycles, both astronomical and economic.

Eighth Annual Warranty Report,
Totals & Averages: When sales fell, so did warranty costs. But even though sales are rising again, warranty costs are remaining low as a percent of sales. That reflects a change in reliability, and caps a multi-year success story resulting from the increased attention paid to warranties.

Top 100 Warranty Providers of 2010: The biggest warranty providers also seem to be the most stable. Those that saw the greatest annual changes in warranty claims, accruals or reserves tended to be a bit smaller, whether the changes were up or down.

WCM Conference, Part One: With less than two weeks until the annual WCM Conference opens in San Diego, we take a look at some of the major themes expected. And almost every speaker has the same advice: don't try to do it alone without help from some of the warranty industry's experts.

New Board Members Sought: As president and co-founder Glen Griffiths steps down, new leadership is sought for the Institute of Warranty Chain Management at its annual meeting on March 15 in San Diego. Two members have put their names in the hat, but additional openings exist.

February 24, 2011

Seventh Annual Warranty Report,
Totals & Averages: Claims are down. But accruals are down by more, and it looks like they're down by more than they should be. Ten charts provide a snapshot of the warranty landscape as manufacturers enter the recovery phase.

Warranty Master Class: The day before the sixth annual Warranty Chain Management Conference opens next month in Los Angeles, several warranty experts will deliver three-hour workshops aimed at those who already have some familiarity with warranty analytics.

February 18, 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.

Warranty in Financial Statements: Because warranty disclosures began appearing in annual reports less than seven years ago, it takes a bit of skill to hunt down the right data and turn it into meaningful percentages and ratios. So until the procedures are old enough to make it into the accounting textbooks, here's a step-by-step guide to how it's done, using one company's most recent disclosures as an example.

Worldwide Auto Warranties, Part One: Why do Japanese automakers and heavy equipment manufacturers seem to have such low warranty costs? Though sales are down since last year, warranty costs remain under control, according to annual reports filed recently by Toyota, Honda, Komatsu and others.

Annual Warranty Totals & Averages: While claims were up slightly in 2008, both warranty reserves and accruals actually plunged last year. And as sales fall, the percentage of product revenue spent on claims has risen. With no less than 21 charts, we detail the industry totals and averages for the past six years.

Warranty Cost per Vehicle: If one has a figure for warranty accruals and for annual sales, one can quickly calculate an estimate of what a given automaker expects to spend on warranty claims over the life of its vehicles. And better yet, all the complexities of warranty durations, local currencies, labor and parts cost are built into the estimate.

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