Archived Copies of Warranty Week

Change year:

Key Words:

Date Order:

Newest First Oldest First

December 2002 to Today

Nine-Month Car & RV Warranty Trends: Warranty claims and accruals are up for U.S.-based consumer vehicle companies. This industry wasn't hit as hard as many others in the pandemic, but things seem to be back to normal, despite recalls and technological challenges.

January 26, 2023

Nine-Month New Home Warranty Report: Claims, accruals, and reserves continue to see a pattern of steady growth, despite many economists' predictions of an impending recession. Accruals per home sold continue to increase, though inflation and rising home prices mean that the accrual rate per dollar of revenue has decreased.

January 19, 2023

Worldwide Heavy Equipment Warranty Report: Claims were down a bit in 2021, but accruals rose significantly, as did product revenue. The industry's average claims and accruals rates both fell in relation to total revenue, but the combined warranty reserve fund balances of the 56 companies we're tracking in this industry grew 11% to a record $10.81 billion.

January 12, 2023

Worldwide Aviation & Jet Engine Warranty Report: Claims were down for the aircraft but up for the engines, while warranty accruals and reserve balances were up considerably for both groups. But warranty metrics in the aviation industry are still far below the peaks they set several years ago, before the pandemic caused demand for air travel to nearly cease.

December 15, 2022

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

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 Snapshots of the Top 100 Providers: So far this year, most of the largest warranty providers have paid out more in claims and set aside more in accruals than they did last year. But when product sales are factored in, most companies saw their warranty expense rates fall, because sales rose somewhat faster than expenses did.

December 9, 2021

Apple's Product Warranties & AppleCare: The world's largest extended warranty program got even larger last year, reaching an estimated $8.5 billion in revenue. At the same time, Apple's product warranty expenses continue to shrink, with claims falling to a nine-year low even as product revenue soars in the fiscal year that just ended.

November 4, 2021

Mid-Year U.S. Truck Industry Warranty Metrics: During the lockdowns, sales were down and so were accruals for the top truck makers. But warranty claims barely changed, and were actually down more this year than last. And while extended warranty sales fell precipitously in 2020, they're still not back up to the record levels we saw in 2019.

September 30, 2021

Worldwide Heavy Equipment Warranty Report: Claims were up a bit last year but warranty accruals fell significantly, as did product revenue. As a result, the industry's claims rate was also up a bit while the average accrual rate fell. And the combined warranty reserve fund balances of the 52 companies we're tracking in this category grew five percent to a record $9.81 billion.

September 9, 2021

Worldwide Auto Warranty Expenses: Last year, claims fell -10% to $43.9 billion while accruals rose +4% to $51.0 billion. And with some additional adjustments along the way, that drove worldwide warranty reserves up to a new record balance of $114.9 billion. And because sales fell so fast, the average claims rate rose to 2.8% last year, while the average accrual rate jumped to 3.3%.

September 2, 2021

Japanese Automaker Warranty Expenses: Sales revenue fell and so did claims, but warranty accruals actually rose last year. Because of the pandemic, unit sales fell to their lowest level of the last ten years. But while claims are down, accruals are up, as Japanese manufacturers seemingly prepare for increased costs down the road.

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.

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

Nine-Month 2020 Warranty Report: So far this year, warranty claims are down -10%; accruals are down -15%, and warranted product sales are down -7%. But a few industries such as Security Systems and Computer Peripherals are actually up on all fronts, while the warranty metrics of Aerospace and Computers are way down.

December 17, 2020

Warranty Snapshots of the Top 100 Providers: So far this year, claims are down significantly and accruals are down by significantly more. But warranted product sales are down by only -7%, which for a pandemic is not terrible. And because of the interplay between those metrics, warranty expense rates are down only slightly overall.

December 10, 2020

Top 100 Warranty Providers of Mid-2020: As we detailed in last week's newsletter, sales are falling faster than warranty expenses, so the average claims and accrual rates are rising. But that's just the average. Some companies are actually seeing sales increases, and for others so are their warranty costs. This week, we rank those changes, and spotlight the ten biggest percentage increases and decreases.

October 8, 2020

US Auto Warranty Expenses: During the Great Recession, vehicle sales fell faster than accruals but slower than claims, so claims rates slowly rose while accrual rates slowly fell. During this pandemic, however, claims rates jumped quickly, while accrual rates are holding steady. But sales are plunging just like they did 12 years ago.

September 24, 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

Asian Auto Warranty Expenses: While the Japanese and Indian car manufacturers had plenty of time to react to the global pandemic in their most recent fiscal years (which ended in March), the Korean and Chinese companies also seem to have seen it coming. Warranty accruals are down along with sales, and so are reserves, while claims are up. But the Chinese warranty metrics remain baffling.

September 3, 2020

Appliance Warranty Expense Report: While the HVAC industry is known for its long warranties and low warranty expense rates, the household appliance industry is known for its volatility. In 2019, claims fell and accruals rose, but the big news is the jump in expense rates seen in early 2020, caused by a recall in Europe.

Semiconductor Warranty Report: After a sudden jump in claims in 2018, warranty expense rates took a jump early last year. But by year's end, both the amount of money going towards warranty costs as well as the percent of sales it represented were back down to normal ranges. But warranty reserves haven't been this low since 2009.

Telecom Equipment Warranty Report: Warranty claims, accruals and reserves rose a bit from record low levels in 2018, but the long-term decline in the telecom network hardware industry continues unabated. Several mergers contributed to the recent increases, while some of the largest industry players continue to increase reliability, cut costs, and drive down their warranty expense rates.

Aerospace Warranty Report: The big story was Boeing, which was caught in the perfect storm of rising expenses and falling sales. But across the industry, warranty claims and accruals were up after years of slow declines. And expense rates rose as well, though not as high as the levels they were at a decade ago.

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.

Top 100 Warranty Providers of 2019: Though the very largest manufacturers and warranty providers rarely report massive changes in their warranty metrics from one year to the next, at least a few of the mid-sized companies always seem to report cutting their claims and accrual expenses in half. And 2019 is no exception, with major warranty cost reductions reported by several manufacturers.

Auto Parts Supplier Warranty Report: Slowly but surely, the companies that manufacture powertrain components such as engines and transmissions have seen their share of the warranty expenses rise, while the other parts suppliers have seen their share slowly shrink. And both claims and reserves are at record levels.

Truck Industry Warranty Metrics: Claims are up but so are sales. Warranty reserve fund balances hit a new high at the end of 2019, and claims came close to doing so. And extended warranty sales continue to soar for most of the top on-highway and off-road truck, bus, industrial, construction, and farm equipment manufacturers.

Homebuilder Warranty Report: As happened in 2007, the warranty metrics of the U.S.-based single-family home builders seem to have hit a bit of a plateau in 2019. Unit sales and warranty claims are up, but all the other metrics are little-changed from 2018 levels. And now, it's hard to imagine how 2020 will turn out.

U.S. Auto Warranty Metrics: In 2019, warranty metrics improved for Tesla and deteriorated for GM and Ford. While Tesla still sets aside the most funds per unit sold to finance future warranty costs, its current claims rate is one of the lowest in the business. And while GM and Ford spend less per vehicle, their vehicles also cost less, and their costs have been rising for several years in a row.

Warranty Claims & Reserves, Part 3: While some of the sub-groups within the buildings category are dominated by companies such as Whirlpool, Carrier, and GE, others contain dozens of similarly-sized manufacturers. And while some of their warranty metrics are all over the chart, others are clumped into relatively tight clusters, like a marksman who never misses his target.

February 20, 2020

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

Warranty Claims & Reserves, Part 1: Using three metrics: claims, reserves, and sales, we can calculate which industries and even which individual companies are over or under the averages for both their spending on claims and the capacity of their reserve funds. And by charting the results, we can see which companies, industries or manufacturing sectors have the most consistent warranty expenses.

February 6, 2020

Warranty Expense Inflation: Prices rise and so does the cost of warranty. Over the past 17 years, prices in dollars have risen almost 40%. If we were to adjust warranty expenses for inflation, it makes the most recent claims and reserve data look a bit worse.

January 30, 2020

Product Warranty Sectors: By dividing all warranty-issuing companies into three groups -- vehicles, buildings, and electronics -- we can look at trends over time in terms of claims, accruals, reserves, and the percentage of sales revenue spent on warranty expenses. And we can also see that those expense rates have recently taken an upturn for some of them after years of declines.

January 23, 2020

U.S. Commercial Vehicle Makers: The warranty expense data in their latest financial reports suggest that the top U.S.-based truck, bus, construction equipment, and agricultural vehicle makers are doing just fine, with relatively stable amounts of claims and accruals, after several reported noticeable expense spikes in previous years.

December 19, 2019

U.S. Consumer Vehicle Makers: The nine-month financial reports suggest that the top U.S.-based passenger car, motorcycle and recreational vehicle makers have seen a slight increase in their warranty costs and a slight decrease in sales, resulting in an upturn in their claims rates. But it's nothing like what happened to them a decade ago, when sales plunged by unprecedented amounts and claims costs didn't.

December 5, 2019

Worldwide Aviation Warranty Expense Report: Warranty accruals were up last year, but warranty claims continued to fall. It's still too early for the cost of grounding of the 737 Max to show up in the data, but why are Boeing's warranty costs always much larger than Airbus? Meanwhile, Bombardier and Dassault saw significant spikes in their warranty expenses last year, while Gulfstream and Embraer saw slight declines.

October 10, 2019

Auto Supplier Warranty Report: The data for the first half of 2019 is not looking so good for the suppliers of automotive parts and systems. Claims hit a new record high and so did warranty reserves. The silver lining in this cloud, however, is that rising sales have reduced the pain and have kept expense rates close to their historical averages.

September 12, 2019

Worldwide Automotive Warranty Expenses: With reliable warranty expense data in hand from 24 of the world's largest carmakers, we have calculated some worldwide metrics: $46 billion in claims, $50 billion in accruals, $115 billion in reserves, 2.14% average claims rate, 2.53% average accrual rate, and $543 in accruals per unit sold.

August 22, 2019

Top Chinese Automaker Warranty Expenses: Claims jumped but accruals fell. Automotive revenue rose but unit sales declined. The warranty metrics of the top Chinese OEMs are puzzling, and the amount of accruals they each set aside per vehicle sold is impossibly low. Something is just not right with these numbers.

American Auto Warranty Expenses: While General Motors continues to recover from its massive ignition switch recall of 2014, the warranty expenses of Ford are creeping upward. Tesla, meanwhile, is in the strange position of having the lowest claims rate and the highest accrual rate in the U.S.-based portion of this industry.

Warranty Claims Rates by Industry: The collected industry average claims rates for 23 product warranty categories over 16 years are sorted into high, medium and low-cost buckets, revealing a peculiar relationship between where the group is in the supply chain and how high or low their warranty expenses are.

Homebuilder Warranty Report: All the metrics were up in 2018, and the growth continued into the first quarter of 2019. Claims and accruals are back to pre-recession levels, and warranty reserves hit a new record high. Meanwhile, the level of warranty expenses per new home sold show some curious and sudden spikes for some builders and long-term stability for others.

Telecom Industry Warranty Report: While many of the top equipment manufacturers continue to lose business to, or get acquired by foreign firms, there are still several hundred U.S.-based telecom companies paying claims and maintaining warranty reserves. But there's no denying that the business isn't what it used to be a decade ago.

Semiconductor Warranty Report: Companies that make the tools and equipment used to manufacture semiconductors and printed circuit boards spend more on claims, set aside more accruals, and shell out a larger chunk of their revenue on warranty expenses than do their customers who make the actual devices. But the companies that make the devices keep more warranty reserves on hand than do the companies that supply them with tools and equipment.

Automotive OEM Warranty Report: Depending on the metric you look at, the makers of cars, trucks and other vehicles account for between 40% and 45% of the warranty expenses of all U.S.-based manufacturers. But despite their size, their claims and accrual costs have been relatively stable for the past few years.

Aerospace Warranty Report: Claims and accruals continue to fall for the top aerospace OEMs, though the warranty expense rates of aerospace suppliers has been rising for two years now. And the recent acquisition of Rockwell Collins by United Technologies has made the industry's largest warranty provider even bigger.

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

Worldwide Construction Equipment Warranties: Sales took a big jump in 2017, and so did warranty expenses. But the increases were more or less proportional, which means the warranty expense rates remained about the same. However, the industry's claims and accrual totals are still a bit below their pre-recession peak levels.

November 8, 2018

Japanese Auto Warranties: While Toyota, Nissan and Honda dominate, six other companies also pay claims and make accruals for cars, trucks and buses made in Japan, or made elsewhere by a Japanese company. And while none besides Toyota & Honda report all their warranty metrics, most leave enough clues for outside observers to plug the holes with estimates.

October 11, 2018

Tavant Signs Kubota: The second time around, experienced customers will perform sophisticated analyses of warranty claims processing platforms before making their choice. One company graded vendors on 350 different metrics before deciding which platform they were going to buy.

September 20, 2018

Solar Equipment Warranty Expense Rates: It's a bit of an actuarial nightmare. Relatively young companies in new and unproven industries issue very long warranties for which multiple years or even decades can pass before claims arise in volume. But eventually, products mature and claims exceed accruals, and reserves begin to deplete. Then the actuaries break the bad news: it's time to raise rates.

August 30, 2018

Mobile Home Warranty Expenses: While much of the industry collapsed a decade ago, the five large manufacturers that remained in business have made a steady comeback. Last year, claims and accruals finally surpassed their pre-recession peaks, even while most of the remaining manufacturers have been able to keep those expenses steady as a percentage of sales.

Aerospace Warranty Report: Unlike the automotive industry, the manufacturers of commercial airplanes do not have higher warranty expenses than their suppliers, and do not spend a larger percentage of their sales revenue on warranty claims. But just like those land-based vehicle makers, airplane and helicopter manufacturers have been cutting their warranty costs for more than a decade.

Automotive Supplier Warranty Report: Of all the companies that supply parts and components to the car and truck manufacturers, those making engines, axles and transmissions pay the most claims and see the highest warranty expense rates. Last year, in fact, they broke records for claims paid, accruals made, and reserves held.

Warranty Claims & Accrual Rates: Among the seven largest warranty-providing industries, only a few have a consistent history of reducing warranty expense rates. Instead, most have seen their claims and accrual rates both rise and fall over the past 15 years, and a few have even seen sustained increases in their warranty costs.

Top 100 Warranty Providers of 2017: While total claims and accruals fell last year, some companies saw their warranty costs soar. By comparing each company to itself over time, we can spot the most and least improved warranty providers. And we can also spot the accounting eccentricities of those few that act like nobody's watching.

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

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

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.

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.

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.

Warranty & Corporate Inversions: Although warranty has an effect on taxes, the movement of a company's headquarters from a high-tax to a low-tax country doesn't seem to change its warranty claims or accrual rates. The merger of product lines has a much bigger effect, no matter what their nationality. But in at least one case, a company leaving the U.S. decided to cease complying with warranty reporting rules.

Solar Equipment Warranties: While product warranties that last for one or two decades are reassuring to buyers, they're not worth much unless funds are available to pay claims. That means betting on young startup companies eventually becoming old industry veterans. But who knows how reliable a system installed now will be in 10 or 20 years, and how much it will cost to repair or replace?

U.S. Truck & Auto OEM Warranty Report: While falling sales drive Navistar's claims rate upwards, Paccar finds ways to cut warranty costs. And both GM and Ford continue to report some of the lowest warranty cost per vehicle metrics in the world, while Tesla gets its warranty costs under control.

Sports Equipment & Consumer Electronics Warranty Report: While they're not the top sources of warranty expenses, there is a lot of warranty activity in these industries. So rather than bury their claims and accruals in the "other" category, let's take a look at the warranty costs of everything from karaoke machines to golf clubs.

Appliance & HVAC Warranty Report: HVAC manufacturers have lower warranty costs but are more cautious than other kinds of appliance makers, keeping a much higher ratio between claims and reserves. But neither group has done much to reduce their warranty expenses, though some companies have cut their costs by hundreds of millions of dollars.

Semiconductor & PC Board Warranty Report: For most of the companies making microchips and printed circuit boards, sales are up and warranty expenses are down. But expenses have fallen far more dramatically for the suppliers of the chip manufacturing equipment, who used to spend a far higher share of their revenue on claims than their customers did.

Telecom Equipment Warranty Report: Is most of the warranty cost reduction now behind them? Several parts of the industry, such as the Internet and data communications equipment makers, have seen their expense rates climb a bit in recent years. Others are letting their reserves run low, or cutting their accrual rates even as their claims payments increase.

Computer Industry Warranty Report: Though their warranties are usually shorter than those on cars and trucks, their expense rates are almost as high, as a percent of revenue. And despite their higher-than-average claims and accrual rates, many computer, disk drive, and printer manufacturers prefer to keep their warranty reserve cushions as slender as possible.

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.

Home Warranty vs. Homebuilders' Warranties: When it comes to protection plans, consumers spent over $2 billion on home warranties last year while builders spent roughly $1.5 billion on warranty claims. Home warranties are an essential part of a sales transaction in some states, and homebuilder warranties are a major attraction for new home buyers. But most existing homes aren't covered by a protection plan, and the warranty costs for most new homes aren't reported publicly.

January 21, 2016

European Auto Warranty Report: In this initial piece of a two-part series, we look at the claims rates and accruals-per-vehicle rates of five of the top European automotive OEMs. Whether we count in euro or dollars, some of them have the most expensive factory warranties in the world. But a few have managed to cut those costs over the past decade.

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

Apple's Warranty & AppleCare Programs: It's not the kind of thing the consumer advocates like to report, but one of the world's leading electronics manufacturers and retailers is giving its customers a break, paying more warranty claims, keeping extended warranty prices steady, and giving customers a better value proposition on their product protection plans.

October 30, 2014

Medical & Scientific Equipment Warranties: While most of the companies in this industry have relatively low warranty expenses, those whose equipment involves either X-rays or lasers spend a much higher percentage of revenue on claims. Yet those are the companies that have done the most to cut their warranty costs over the past decade.

Automotive Warranty Report: For the first nine months of 2013, claims are up a bit from 2012 levels while accruals are down. More importantly, the percentage of revenue spent on warranty work is down as well. That means manufacturers expect to see lower warranty costs in the future, as they make more reliable vehicles that cost less to repair.

January 9, 2014

PCMI's Extended Warranty Management System: Service contract administrators and underwriters need software that helps them manage both claims and revenue. And increasingly, they need multilingual and multiple-currency systems that can travel with them as they expand internationally.

September 5, 2013

Consumer Electronic Warranties: The top companies don't have very high warranty expense rates. Outside of laptops and smartphones, their product warranties aren't all that costly. So perhaps warranty claims and repair costs are not a big deal for most consumer electronics companies

Top 100 Warranty Providers of 2012: While most of the largest manufacturers continued to reduce their warranty costs last year, some saw dramatic increases. Here are the top up and down percentage changes of the year for three warranty metrics: claims, accruals, and reserves.

Warranty Marksmen, Part 2: In high-tech industries, a few dozen companies have apparently learned how to expertly tune their warranty accrual rates and reserve fund balances, so that there's always enough money set aside to pay claims. Here are the top 20.

December 6, 2012

Warranty Estimates, Part 3: Companies in the building trades are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside is too meager to pay all their expected claims.

November 21, 2012

Warranty Estimates, Part 2: Automotive companies are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside is too meager to pay all their expected claims.

November 15, 2012

Warranty Estimates, Part 1: Companies are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside too meager to pay all their claims.

November 8, 2012

Most Improved Warranty Metrics, Part 2: Warranty expense rates have been on a downward trend for most of the past decade. And most of the manufacturers are reducing their claims and accrual rates year after year. Some, however, continue to cut costs faster than their peers.

October 25, 2012

Large Vehicle Warranties: Claims rates spiked during the recession, but returned to normal soon after. For some of the OEMs, however, rates continued to drop as warranty processes were improved. The result is some of the lowest expense rates ever in the first half of 2012.

August 23, 2012

Warranty Software Report: IDC Manufacturing Insights has documented the spectrum of claims processing tools available to warranty providers and extended warranty administrators. And like it did in March with its warranty analytics vendor assessment, the crew once again looked at each company's current capabilities, target customers, industries served, and future strategies.

Computer Warranties: While the computer OEMs still pay most of the claims, they've been very successful at cutting the percentage of sales they spend on warranty. Meanwhile, suppliers such as disk drive makers have also streamlined their warranty outlays, but the peripheral makers haven't been so lucky and are watching costs rise as a percentage of sales.

Top 100 Warranty Providers of 2011: While most of the largest manufacturers continued to reduce their warranty costs last year, some saw dramatic rises. Here are the top percentage increases and decreases of the year for claims, accruals, and reserves.

Truck Warranties: Unlike passenger cars, the truck OEM isn't usually responsible for the vehicle's entire warranty. Instead, many of the suppliers and component manufacturers issue their own warranties, and pay their own claims.

January 19, 2012

New Home & RV Warranties: When sales were falling, builders cut their warranty accruals. But, worried by claims payments that didn't fall as fast, they didn't cut accruals enough. So now some have built up excess levels of warranty reserves that may be in the multiple millions of dollars for at least 10 homebuilders.

January 5, 2012

Top 100 Warranty Providers: While most manufacturers keep cutting their warranty costs, some report massive spikes in their claims and accrual rates for the year ended in September. Others continue to recover from past spikes, with some of the largest declines of the year.

December 29, 2011

Solar Warranties, Part 1: They can last up to 25 years, but what does that really mean when the technology is changing so fast? And even if a company really expects to pay claims in 2036, how do they prepare for them now by making the right amount of accruals at the time of sale?

December 1, 2011

Warranty Reserve Capacity: The ratio between warranty reserves and claims payments is always changing. But by measuring departures from the baseline average, we can detect which companies have either too much or too little money in their warranty accounts.

November 17, 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

Automotive Warranty Report: As vehicle makers get back to normal and sales rebound, one thing that's not bouncing back is their warranty expense. Key warranty metrics continue to decline, including claims as a percentage of revenue. And once again, the warranty reserve fund balances of the top vehicle makers and their suppliers are growing.

September 22, 2011

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.

New Home Warranty Report: Though sales keep falling, claims are rising after several years of declines, and the accrual rates are holding steady. So is the worst over? Or are there homebuilders out there with bigger problems ahead of them?

Telecom Equipment
Warranty Report: The makers of network gear are generally seeing lower warranty costs, though their reserve funds are barely able to cover claims. And there's a new market leader, in terms of both the size of their warranty budget and the way they've been able to steadily reduce costs over time.

Aerospace Warranty Report: While the airframe makers and their suppliers pay out roughly the same percentage of product revenue for warranty claims, they keep very different levels of reserves. The airframe makers keep a balance equal to four years of claims, while their suppliers keep half as much in their warranty reserve funds.

Automotive Warranty Report: After spiking to worrying levels in 2009, automotive warranty claims rates returned to normal in 2010, while the OEMs' accrual rates have never been lower. Their parts suppliers, however, continue to see their warranty costs escalate as the OEMs insist they share a bigger slice of the burden.

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.

The ServiceBench Legacy: In the household appliance industry, it's more or less assumed that warranty and service contract claims data will cross the ServiceBench network. In most other industries, each manufacturer and third party administrator has its own network, and its own claims submission format.

January 13, 2011

Telecom Equipment Warranties: Though the totals are down because of all the industry players that have headed for the exits, those who remain are also cutting their warranty expenses. And claims have never been lower as a percentage of sales.

December 23, 2010

Implementing iWarranty: 4CS Inc. has a long history of outfitting agricultural and construction equipment makers with its Web-based warranty claims processing software. More recently, it's added a pair of electric car makers, along with two of the biggest construction equipment makers headquartered outside the U.S.

October 28, 2010

Construction Equipment
Warranties: While sales fell in 2008, warranty claims continued to rise well into 2009. So some of the top construction equipment makers saw their claims rates reach all-time highs last year. In the first half of 2010, however, things seem to be getting back to normal.

October 21, 2010

HVAC & Appliance Warranties: Both claims and accruals have taken a nosedive this year. But that's good news if it's the result of increased quality and reduced cost, rather than merely a symptom of slowing sales. The problem is, it's hard for external observers to tell the difference.

October 7, 2010

Computer Warranty
Claims & Accruals: No news is good news as the computer industry's top warranty providers turn in predictable warranty expense reports. Despite economic turmoil, new product launches and multiple recent acquisitions, claims and accrual rates just aren't changing much.

September 16, 2010

Japanese & European Warranties: While consumer electronics have some of the lowest warranty costs, computers have some of the highest claims rates. And telecom gear is somewhere in the middle, as a look at eight of the top international suppliers details.

Fleet Warranties: Among companies that operate fleets of hundreds or even thousands of vocational vehicles, service contracts are rarely bought. Some ask their manufacturers for longer warranties, but most prefer to fix their trucks and buses themselves. And what they like to outsource isn't so much the repair labor as it is the labor associated with warranty claims submission.

Warranty Claims & Accruals
by Industry: There's been a massive divergence between claims and accrual rates, and it can't all be blamed on the recession. It looks more like some companies are managing earnings by reducing their accrual rates to make their numbers. As claims rates soar, accruals fall.

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.

Top 100 Warranty Providers of 2009: By comparing companies to themselves over time, we're able to identify those with the biggest changes in claims and accrual rates. And while change is good, too much change may not be. Appearances on multiple top 10 lists can imply instability or an unfamiliarity with the warranty process.

Warranty Search Application: Endeca Technologies is promoting a new approach to warranty analytics that allows users to take unscripted journeys through their claims data, asking questions they hadn't anticipated and looking for patterns and anomalies they didn't know were there.

Design for Warranty: Products can be designed so that not only can they be fixed faster, but also so they can be fixed by customers themselves. Given that labor is the major component of warranty claims, product designs that plan for customer self-repairs can cut costs.

Warranty Fraud Detection: SAS says send us your claims data and we'll show you the fraud. If upwards of 10% to 15% of claims are in some way suspect, such a system could pay for itself in just a few months. Does it sound too good to be true? GE Appliances was the first customer.

February 25, 2010

Home Warranties & Foreclosures: As the industry looks for a way up from the bottom, home warranties may become a valuable selling tool. Buyers, worried about the damage done by departing owners, vandals, and the weather, might appreciate the coverage of a home warranty. Industry insiders, meanwhile, report that claims costs on foreclosures aren't that different from their other policies.

December 3, 2009

Home Warranty Association: Why are at least 90% of existing home sales in California covered by a home warranty? A mix of court rulings, government regulations, and industry response seems to have reassured home buyers that home warranty companies are both willing and able to pay claims. And thanks to a statewide educational effort, the realtors are able to explain how it all works to their clients.

November 12, 2009

Home Warranty Scam? There are good extended warranty companies and there are bad extended warranty companies. One of the worst seems to have a policy of denying all claims over $100 for what at first seem like legitimate reasons, and then hiding from the angry mob behind the anonymity of its web site, toll-free number, and post office box.

November 5, 2009

Appliance & Building Material Warranties: We conclude our mid-year product warranty report with a look at the supplier side of the homebuilding industry, where we find at least one group paying more for warranty claims this year than they did last year.

October 22, 2009

Aerospace Industry Warranties: In an industry that puts a premium on safety and reliability, warranty costs rarely stray far from the baseline. And while many aviation companies cope with the double whammy of rising warranty costs and declining sales, some such as Boeing and Gulfstream are actually seeing sales rise and claims fall.

October 1, 2009

Automotive Warranties: With GM now government-owned and several mobile home makers trapped in bankruptcy, industry-wide warranty statistics are losing their meaning. And thanks to the distortions caused by massive sales declines this year, claims rates have also lost much of their relevance during this recession. But among at least the well-run warranty providers, accrual rates have remained proportional to sales rates and quality levels.

September 10, 2009

Top 100 Warranty Providers at Midyear: Was that the sound of the bottom of the recession? If so, financial data from the first half of 2009 provides a detailed record of how warranty providers reacted to a collapse in sales and a jump in claims. Though some of the largest warranty providers didn't make it, those that did are enjoying the benefits of recent claims processing automation projects and other cost-cutting efforts.

September 3, 2009

Auto Part Supplier Warranties: Claims are up a bit but sales are down a lot. And while most suppliers have reduced accruals proportionally, at least one seems to have taken an accrual holiday.

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.

Computer Warranty Trends: While other industries are seeing claim rates rise and accrual rates fall, warranty providers in the computer industry are seeing claims rise slightly and accruals rise a lot. And it's not so easy to blame those changes on sales declines, or to link them with quality increases.

Top 100 Warranty Providers of 2008: Of all the companies spending the most on warranty, none of the largest reported massive percentage changes in 2008, which confirms the stability of their warranty programs. But there were plenty of big changes in claims and accrual rates further down the list, some for the better and some for the worse.

The Value of Warranty Expertise: Is warranty management merely a clerical skill, or is there more to it than just paperwork? Some see warranty as not only a leading indicator of product quality but also a major chance to impress a customer. However, that conversation can only take place if the warranty professional is trained to do more than merely process and pay claims.

January 15, 2009

Warranty Trends in 2008: With the filing of the last few financial reports of this cycle, it's time to look at warranty costs by industry. The big story in 2008 is how falling sales have made warranty claims less affordable for some companies. Warranty reserves peaked at the end of 2007, but claims are still rising. And for hard-hit sectors such as autos and homebuilding, the worst may still be ahead.

December 18, 2008

Security Equipment Warranties: Although big ticket military contracts don't usually include what we'd call product warranties, the maker so numerous other products that help protect people and property do pay claims and maintain warranty reserves. What follows are snapshots of the past six years of warranty expenditures for four of the market leaders in their respective corners of the security marketplace.

December 5, 2008

Warranty Cost Cutting: The warranty reserve balance rises and falls, along with claims and accruals, in reaction to changes in sales volumes and product quality. But merely measuring the balance doesn't provide as much insight as does using it to measure a company's capacity to pay claims.

November 26, 2008

Warranty Cost Cutting: Among the top 100 warranty providers, more than half have reduced the percentage of sales they allocate to warranty costs in the past year. Some have cut their accrual rates by a third, a half, or even more. And many have also seen their claims rates fall, suggesting not only cost cutting but also quality improvements.

November 20, 2008

Telecom Equipment Warranties: Claims are up slightly and accruals are down slightly, as are total warranty reserves. But within the telecom sector are a handful of companies that have seen warranty costs fall significantly in the past five years.

October 9, 2008

Medical Equipment Warranties: While claims are increasing, sales are rising a little faster in the medical and scientific equipment industries. And at least eight companies have cut their warranty expenses by big percentages over the past five years.

October 2, 2008

Off-Road Vehicle Warranties: As might be expected, companies selling vehicles closely linked to summer recreation and the growing season show a cyclical pattern in their warranty claims. Those more identified with construction equipment, however, show no cyclical pattern, though several have seen recent rises in warranty costs.

September 12, 2008

Top 100 Warranty Providers: Compared to a year ago, much has changed in terms of warranty claims, accruals, and reserves. Key ratios suggest that some companies are enjoying vastly reduced repair costs thanks to quality gains. However, for the largest manufacturers, the percentage of sales they spend on warranty hasn't changed much.

September 5, 2008

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.

RV & New Home Warranties: Sales are declining so claims rates are rising. But a few homebuilders have radically cut the amount they set aside per unit sold, raising suspicions that they're intentionally estimating low. Meanwhile, homes on wheels continue to show higher warranty costs.

Five-Year Warranty Trends, Part Five: American manufacturers now keep $41.1 billion in their warranty reserves, equal to 17 months' worth of claims paid. And it's been more or less steady at that capacity level for the past five years. Meanwhile, average accrual rates have stayed close to 1.7%, although different industries accrue for warranty at different rates.

Five-Year Warranty Trends, Part Three: Measured in dollars, claims were up by only $400 million last year (+1.4% since 2006) while accruals rose $1.5 billion (+5.5%) since 2006. But Microsoft's Xbox 360 debacle accounted for much of those increases in a year that saw warranty expenses decrease or remain the same for manufacturers in many industries.

Top 100 Warranty Providers: Though total warranty claims were up only slightly in 2007, some manufacturers saw massive changes up or down. While we can't compare companies directly to each other, we can compare each company to itself. And we can measure those rates of change, detecting both improving and deteriorating warranty circumstances.

NEW Acquires ServiceBench: One is a leading service plan administrator and call center operator. The other is a major network hub for warranty professionals. Together they can set the standard for warranty claims processing, customer care, extended warranty administration, service dispatch, and end-of-life recycling.

January 23, 2008

Warranty Benchmarks, Part Two: Big companies really do pay more. The larger the manufacturer, the more warranty claims they pay. And in both the automotive and computer industries, OEMs tend to pay more claims than their parts suppliers.

October 31, 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

Aerospace Warranties: In this industry, there doesn't seem to be a wide gap between the claims paid by aircraft makers and their suppliers, as is the case with cars and computers. In this respect, the makers of Boeing, Cessna, and Gulfstream aircraft are different from Ford, GM, HP, and Dell.

October 2, 2007

New Home & Appliance Warranties: At the midpoint of 2007, sales are falling faster than claims can be reduced, driving claims rate percentages upwards for many companies in the building trades. But unlike in the automotive or computer industries, claims in this sector were always rather evenly distributed among new home builders and their suppliers.

September 25, 2007

Automotive Warranties: Are claims soaring or falling? It depends how you slice the market. One way is to compare OEMs to their suppliers. Another is to group OEMs by the size of the vehicles they make. Either way, passenger car and light truck makers always seem to end up paying the most.

September 11, 2007

Mid-Year Warranty Report: Numerous companies continue to fine-tune their warranty spending, reacting to claims rate fluctuations by modifying accruals. While warranty spending by one company can't be compared to another's, we can compare a company to itself over time, by way of a series of top ten lists.

August 15, 2007

Ten Worldwide Warranty Providers: It's holiday time in the U.S. this week, so we're taking the opportunity to present warranty data for ten global brands based in other countries. Despite the currency and accounting differences, many pay warranty claims at rates close to those turned in by their U.S.-based peers.

Warranty Reserves by Industry: Longer warranties usually mean larger reserves. And in industries where warranties are getting longer, the ratio between claims and reserves is growing. But in some sectors, the need for earnings may be forcing companies to live with more risk and smaller reserves.

Automotive Warranties: Thanks to reduced warranty expenses at GM, claims were up only slightly for the auto industry in 2006. With four years of data in hand, it's now possible to calculate typical claims rates by product or vehicle type. And while warranty expenses for some are on a downward trend, others have seen costs rise.

Computer Warranties: Though warranty costs increased only slightly for PC makers as a group in 2006, a few companies saw radical changes in their claims and accrual rates. And Dell's still missing, with no new warranty data in almost a year.

Consumer Electronics Warranties: While most of the brands are imports, there is a short list of American CE manufacturers. But while the Japanese brands have relatively low warranty expenses, the American brands pay claims at rates more like those seen in the computer and automotive businesses.

Product Warranty Claims, 2003-2006: Signs are emerging that suggest a peak in warranty spending by American manufacturers. Is it better management? Shorter warranties? Or could it be nothing more than sales rising faster than costs? With four years of data to examine, there's evidence for each scenario.

Warranty Spending in 2006: With the total over $28 billion and climbing, warranty claims reported last year by US-based manufacturers have never been higher. But while some companies pay out more of their sales in warranty claims, others have cut some key ratios significantly.

Warranty Reserve Levels: Most large companies seem to pick a size and stick to it, even as sales and claims vary. Whether measured in dollars or as a multiple of claims paid per month, the size of most of the largest warranty reserves has changed very slowly over the past four years.

January 30, 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

Warranty Claims vs. Accruals: Using a few key warranty metrics, it's becoming easier to tell when a given company is managing its claims and accruals responsibly. It's also becoming easier to tell when things run off the rails, even if a company makes no specific disclosures of a crisis.

November 8, 2006

Warranty Stability: Whether a company pays a little or a lot for warranty claims, the stability of the reserve fund should be preserved. But out of the top 100 warranty providers, only 24 seem to be doing it well, as measured by changes in some key ratios over time.

October 31, 2006

Auto Warranty vs. Quality: Does the total cost of warranty have any correlation to product quality? Based on the worldwide claims rates seen for the top five carmakers and quality data collected in the U.S. by J.D. Power and Associates, one does seem to be related to the other.

Warranty vs. Earnings: While a few Wall Street analysts are beginning to treat warranty as a leading economic indicator, fluctuations in claims rates don't always translate into earnings shifts. Yet warranty news is already moving stock prices.

Warranty Inspections: Crawford and Company, already a major player in claims administration services , and home inspections, wants to go deeper into the warranty business.

Warranty Marksmanship: Companies that accurately predict warranty claims and maintain adequate warranty reserves are at the top of their game. And now it's possible to compare their aim by looking at a chart that compares reserves to accruals.

Warranty Reserves: Over time, both companies and industries make consistent choices regarding how much revenue to put aside to fund future warranty claims, reflecting the outlook of their forecasters.

Computer & Electronics Warranties: As is the case in automotive, those with their brand names on the outside end up paying most of the warranty claims. But the computer OEMs don't pay out as much as some of the printer companies or the makers of high-end semiconductor production equipment.

Automotive Warranties: While GM and Ford spend the most on warranty, other types of vehicle manufacturers pay out a greater share of their total revenue on claims. And while most parts suppliers have relatively low claims rates, those in the aftermarket report some of the highest rates of all.

Top 50 Warranty Providers: While most large manufacturers saw warranty claims rise in 2005, most also saw sales gains that helped relieve the pain. Even GM and Ford saw only modest upticks in the percentage of sales they pay in claims. And some such as Boeing saw claims plummet.

Warranty Claims Automation: For a motorcycle manufacturer and a home appliance manufacturer, it wasn't so much that their warranty systems were broke or that their costs were rising. It was just that their old warranty processes were inefficient and couldn't keep up with company growth.

Early Warning Standards: Decades ago the AIAG helped set standards for electronic commerce when it developed new data interchange standards. Now it's doing similar work with warranty data communications standards, looking for ways to reduce delays, improve accuracy, and cut warranty claims costs.

Warranty Software: Good planning pays off as Ingersoll-Rand converts its first, second, and third business units to a new Web-based warranty claims processing system. Now, as other departments eye all that warranty data, the company looks for better reporting and analysis tools.

February 28, 2006

Product Warranty Trends: 2005 is shaping up to be a $27 billion year for the warranty industry, though claims still represent only 1.7% of sales. More than a dozen companies have cut their claims rates. Some manufacturers, however, have seen their claims rates soar into the danger zone.

January 10, 2006

Telecom Equipment Warranties: Unlike in other industries, there doesn't seem to be any typical spending rate for warranty claims in the phone, data, wireless, or broadcast equipment sectors. For every high there's a low, and for every upward trend there's a decline.

December 20, 2005

Auto Parts Warranties: Despite the best efforts of the OEMs to push warranty costs back up the supply chain, auto parts makers still have some of the lowest claims rates around. Notable exceptions to this rule include diesel engines and aftermarket replacement parts such as mufflers.

December 13, 2005

Appliance Warranties: As with computers and cars, warranty claims in a range of 2% to 3% are typical for most appliance brand names. But unlike cars or PCs, warranty costs for appliance and HVAC manufacturers appear to be highly seasonal.

November 22, 2005

Automotive Warranties: As seen by its third quarter financial statements, Ford is catching up to GM, both in terms of revenue and warranty spending. Ford has now become only the second American manufacturer to ever pay out $1 billion or more in warranty claims per quarter. Meanwhile, other U.S.-based vehicle manufacturers have their own warranty ups and downs to report.

November 15, 2005

Computer Warranties: It's entirely possible that HP, Dell, and IBM are each now paying roughly the same percentage of their hardware revenue to satisfy warranty claims. A year ago, HP was paying much more, and Dell and IBM were paying less.

November 9, 2005

New Home Warranties: Is there any correlation between what a company spends on warranty and the satisfaction levels of its customers? For some, fewer claims equals happier customers, but for others, there does seem to be such a thing as not enough warranty.

September 20, 2005

Warranty Claims by Industry: Over the past ten quarters, warranty claims patterns have remained remarkably consistent in numerous industries. Those closest to consumers in the supply chain seem to experience the highest claims rates.

September 7, 2005

Top 50 Warranty Providers: While 20 saw declines in the percentage of revenue spent on warranty claims, all but 12 paid out more claims in dollars during the first half of 2005. Rising product sales made the difference.

August 30, 2005

Warranty Claims & Accruals: Ten quarters of data for the top ten U.S.-based warranty providers show just how variable and seasonal claims rates can be for some companies and how consistent they've been for others.

August 23, 2005

Warranty Complaints: Consumers with gripes about denied warranty claims are best advised to file a complaint with their local Attorney General, and not to bother with the federal watchdogs.

Warranty Software: Rather than selling warranty analysis software, PolyVista sells analysis software that can look at warranty claims as easily as it can look at airline flight data or oil and gas trading records.

Warranty by Industry Sector: While claims grew by 4.9% to $25.1 billion in 2004, warranty's slice of revenue actually shrank a bit as sales grew faster. In some industry sectors, both dollars and percentages actually fell, but computer and automotive OEMs still process the vast majority of all warranty claims.

Top 50 Warranty Providers: Manufacturers spent more than $25 billion last year on warranty claims, but sales rose a bit faster, so claims as a percentage of revenue fell slightly. Most of the top 50, however, saw their claims rates fall more.

Product Warranty Providers: Gateway holds onto the title of most improved for 2003-2004, but almost three-quarters of the top 50 manufacturers are seeing their warranty claims rates decline year over year.

January 5, 2005

Warranty Outsourcing: For one service contract administrator, discretion is a virtue. Some clients don't want anyone to know they outsource claims administration. Some don't even want their names to appear in print.

November 23, 2004

Extended Warranty Income: If comparing extended warranty to net income is misleading, then let's correct the record by comparing apples to apples: warranty claims paid to recognized revenue over the past two years.

November 9, 2004

Service Dispatch: With home appliances, warranty work almost always involves a housecall. Claims administrator ServiceBench has turned the dispatch of service technicians into a strategic advantage.

November 3, 2004

The Warranty Reserve: With 18 months of data in hand, it's now possible to begin defining a normal range for the size of the warranty reserve fund, expressed as a multiple of the average amount spent per month on claims.

September 14, 2004

Auto Warranties: It's not just Ford and GM. There are numerous other types of vehicles, and numerous automotive suppliers to those OEMs who each have their own characteristics when it comes to warranty claims and accrual rates.

September 8, 2004

Home Warranty Claims & Accruals: Homebuilding, heating and cooling each have their peak seasons. But do warranty claims for new homes and HVAC units also have a peak season? Recent data suggests that claims actually peak later in the year, months after sales do.

August 31, 2004

Computer Warranty Claims & Accruals: The companies whose brand names go on the front of the computer continue to pay the lion's share of warranty claims. Makers of disk drives, printed circuits, semiconductors, and most types of peripherals see a significantly smaller share of warranty claims.

August 24, 2004

Warranty Claims & Accruals: While some U.S. manufacturers are still preparing their latest financial statements, most of the largest warranty providers have already announced their second quarter claims and accruals. While some of the top 50 are spending more on warranty than a year ago, most are spending less, and a few are spending a lot less.

August 17, 2004

Microsoft Automotive and AWS Microsoft Automotive to enter the warranty claims processing business through partnerships with Active Web Services, Capgemini, and others.

August 10, 2004

Warranty Seminar: Last month, a business intelligence software developer sponsored a morning seminar on the topic of the TREAD Act and warranty claims. For those who couldn't make it, here's a brief overview of the proceedings.

Industry Segments: Year to year, each industry's overall share of warranty claims changes slowly, as do their individual claims rates as a percentage of sales. But because many companies operate in more than one industry, precise calculations are elusive.

Declining Warranty Claims: In both dollar amounts and as a percentage of product sales, warranty claims took a steep dive during the first quarter of 2004. Was it caused by cyclical factors? Was it due to rising sales? Or has there been a product quality improvement?

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.

Warranty Claims Rates: In both the automotive and computer industries, the OEM -- the brand name on the product -- is frequently left holding the bag when it comes time to pay warranty claims. As the latest data shows, their suppliers usually see much lower warranty claims rates.

Warranty Measures: Matching warranty claims and accruals to reserves has always been a balancing act. Now it must be done in public, making it harder to conceal raids on the reserve fund or spikes in claims. But it's also easier to see how a company's quality improvements and claims reductions can translate to bottom-line gains by reducing the need for reserves.

Warranty Claims: While some U.S. manufacturers are still preparing their latest financial statements, most of the largest warranty providers have already announced their first quarter claims and accruals. Half of the top 50 are spending more on warranty than a year ago while half are spending less.

Telecom Warranties: While the ups and downs of the heavyweight manufacturers throws off the averages, it appears that TV and radio broadcast equipment generates half as much in warranty claims as newer technologies such as cellular and Internet gear. Are telecom warranty rates related to the maturity of the technology or the age of its manufacturers?

Automotive Warranties: Ford and GM are not only the largest providers of automotive warranty. They're also paying a higher percentage of their revenue in claims than everyone but the makers of RVs and rider mowers.

Warranty Reserves: While the average manufacturer spends 1.9% of product revenue on warranty claims and keeps a little over a year's worth of funds in reserve, each industry is different. Computer manufacturers and automakers fund their warranty programs at different levels than telecom or aerospace manufacturers. But in any group, as with any trend, there's always the odd man out.

Warranty by Industry: While automotive warranties continue to account for half of all claims, a diverse mix of other industries makes up the balance, from air conditioning to airplanes. Manufacturers grouped by the types of products they make exhibited distinct personalities during the past year.

Top 50 Warranty Providers: The data is in, and there are four new names on the list of companies with the largest warranty programs. American manufacturers reported more than $23.675 billion in warranty claims during 2003, a rate very close to $2 billion a month.

Is the TREAD Act Working? It may still be too early to say for sure, but recent auto safety-related announcements have been filled with specific quantitative data about warranty claims and failure rates. Could it be that the TREAD Act's Early Warning Reporting system is really doing its job?

Jetliner Warranties: In the good old days, the airlines and aviation parts manufacturers already swamped by regulatory paperwork had little time for the additional bother of warranty claims. But in an era of falling revenue and rising costs, warranty has suddenly become very important to both operators and their suppliers.

Stadium Warranties: Like any other large construction project, sports stadiums come with product warranties. Just because there's no warranty registration card in the box doesn't mean that the builders don't face warranty claims from stadium owners. Two examples follow, from Seattle and Houston.

February 17, 2004

Reducing Warranty Claims: Sometimes a company focuses its engineering talent on a manufacturing problem that once solved, results in soaring product quality improvements and plummeting warranty costs. Other times, a company gets lucky as product families mature and installed bases age themselves out of warranty.

February 3, 2004

Auto Warranties: While the Big Three sold two-thirds of the vehicles purchased in the U.S. in 2003, they settled three-quarters of the warranty claims. On average, Detroit pays twice as much in claims per vehicle as Toyota and Honda. But that's not the only quality gap. Recent research finds striking gaps between perceived and actual quality levels.

January 27, 2004

Warranty in the IT Industry: Readers ask for more details on warranty claims and accruals in the computer, telecom, semiconductor, disk drive, and peripherals industry sectors.

January 12, 2004

The Warranty Reserve: Manufacturers apparently allowed their reserve fund balances to shrink by some $2 billion during the third quarter, not only because of a 4% rise in claims but also because of numerous downwards changes of estimate and cuts in accrual rates.

December 22, 2003

Warranty Claims & Accruals: In some industries, warranty claims and accrual rates move together in parallel. In others, they each seem to have a mind of their own. This week we take a look at nine months of warranty claims totals and the percentages of sales they represent in nine different industries.

December 15, 2003

Warranty Claims: While hundreds of manufacturers have now filed financial reports detailing their warranty activity during the third quarter, it remains unclear why claims rose by more than five percent. Is it a seasonal fluctuation? Or is it proof that the recession is finally behind us? Here's a down payment on the answer, highlighting trends among the top 50 warranty providers.

December 8, 2003

Ford's Warranty Reserves: Standard & Poor's cut Ford Motor Company's credit rating from BBB to BBB-, citing write-offs at Ford Europe, reduced warranty accruals, and lowered reserves for bad loans by Ford Credit. But were those reduced warranty accruals justified by reduced claims costs?

November 17, 2003

Letter to the Editor: Reader raises an issue with the data for warranty reserves, claims, and accrual statistics published over the past five weeks, suggesting the use of just printer hardware revenue to compute a claims rate paints a misleading picture.

October 13, 2003

Warranty in the Air, Sea, and Ground: Compliance with FASB FIN 45 rules concerning product warranty disclosures has spread tremendously in just the first two quarters of 2003, making it possible to find ranges and averages for warranty accrual and claims rates in numerous market segments. In addition to the automotive and IT industry sectors detailed in the past two issues, here are charts for six more market segments.

September 29, 2003

Warranty in the IT Industry: Spending on warranty claims for everything from handheld computers to television transmitters showed a very slight increase during the second quarter, while both claims rates and reserve fund balances were down. Collectively, some 259 IT equipment manufacturers spent almost $2 billion honoring warranty claims during the period.

September 22, 2003

Warranty in the Auto Industry: Spending on warranty claims showed a slight decrease during the second quarter, while claims rates and reserve fund balances were both up and down. Here are the details.

September 15, 2003

The Warranty Week 500 Most of the major players in warranty claims management recently reported details about their warranty reserve funds, claims and accruals during the second quarter. Here are the summary results.

September 8, 2003

Warranty Services: While most of the service providers in the warranty industry focus exclusively upon the sale and administration of extended service plans, a handful of intrepid companies have outsourced product warranty claims processing for manufacturers in the consumer electronics industry, where repairs can be performed by any of tens of thousands of service centers.

August 11, 2003

Warranty Software: Is there such as thing as a company conceived and launched to provide nothing but warranty claims processing software? Apparently not, but at least two companies decided a year ago to focus almost exclusively upon warranty.

The Warranty Reserve Fund: Now that warranty accruals and warranty claims numbers are in the public domain, it's time to look at the differences in warranty reserve fund sizes and the estimates that are used to produce these differences.

Warranties in the HVAC/R Industry: As temperatures climb, so does the need for air conditioner and refrigerator repairs. But even in the cold winter months, HVAC/R vendors spent an average of 1.9% of product sales to satisfy warranty claims, according to recently filed financial statements.

Introducing the Warranty Week 500: Most of the major players in warranty claims management recently reported details about their first quarter spending. Here are the results, organized by industry.

Don't TREAD On Me: Part 1: Because of the Firestone tire fiasco, automakers must begin compiling quarterly reports on consumer complaints and warranty claims beginning tomorrow.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023