Archived Copies of Warranty Week

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December 2002 to Today

Mid-Year Aerospace Warranty Report: While in years past the top civil aviation manufacturers and their suppliers basically split the industry's warranty expenses between them, in recent years several of the OEMs have run into costly warranty issues. Meanwhile, the suppliers continue to cut their warranty costs steadily.

October 14, 2021

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

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

Medical & Scientific Equipment Warranty Report: The amount of warranty expense reported by these manufacturers has never been lower, but their expense rates have been slowly rising for the past few years after more than a decade of cost reductions. Even though it's last year's data, the importance of low failure rates has never been higher.

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

European Auto Warranty Expenses: While Volkswagen continues to recover from a record-setting recent spike in its warranty costs, some of the other top European carmakers have continued to drive down their warranty costs. Six warranty metrics are detailed for four companies over the past 16 years.

Medical & Scientific Equipment Warranty Report: Though the systems that use lasers or radiation always seem to have higher warranty costs, most of the medical device and scientific instrument manufacturers have cut their costs considerably over the past 16 years.

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.

Telecom Equipment Warranty Report: As the U.S.-based telephone equipment industry continues to decline and move offshore, the domestic industry's warranty expenses have fallen in step. The exception is Internet and data communications gear, which has come to dominate the entire industry over the past 15 years.

Semiconductor Warranty Report: In this industry, the makers of the factory machinery that fabricates and tests the actual products seem to have much higher warranty expense rates than their customers. But they also have reduced their expense rates significantly over the past 15 years, while the expense rates of the device makers have remained more or less the same.

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.

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

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.

Global Construction Equipment Warranties: Half the companies report warranty expense rates that range from 1.0% to 2.3%. The other half are either above or below that range, mainly because most of their revenue and therefore most of their warranty costs come from other industries. And though there's been a few anomalies over the past 13 years, most of these manufacturers report steady and consistent warranty expenses.

Medical & Scientific Equipment Warranty Report: Though product sales are down, warranty expenses are down by more. And while any equipment that uses lasers or X-rays has higher warranty expenses than units that don't, those manufacturers have cut their warranty costs significantly in the past decade.

Auto Parts Supplier Warranty Report: Suppliers of engines and transmissions keep larger warranty reserve balances and pay higher warranty expense rates than do suppliers of other automotive components. But those other suppliers have done a better job of cutting their warranty expenses over the past decade, though they've lost ground recently.

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.

Top Warranty Acquisitions: Every once in a while, a manufacturer or retailer is acquired and ceases reporting its warranty expenses, while the acquiring company reports the amount of warranty reserves it gained through the purchase. What follows are some of the largest transactions of and by U.S.-based warranty providers in the past 18 months.

November 12, 2015

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.

Semiconductor Industry Warranty Report: While the companies making semiconductors and printed circuit boards have kept their warranty expenses below one percent of revenue, the companies that make the machinery that actually manufactures the products pay much more. Even so, over the past decade the machinery makers have been much more successful at cutting their warranty expenses than their customers.

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

Warranty Accruals per Vehicle: Though currency fluctuations are a major factor, in 2013 both GM and Ford accrued less per vehicle sold than any of the European or Japanese OEMs. And though BMW and Daimler command a higher price per vehicle, they've accrued less and less per unit over the past decade as they continue to cut warranty costs.

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.

Auto Parts Supplier Warranty Report: Turns out it's the large truck and bus manufacturers and their engine, axle and transmission suppliers who haven't done much to reduce their warranty expenses over the past decade. Passenger car makers and suppliers of auto parts besides drivetrain components have done a much better job of cutting costs.

Large Vehicle Warranty Report: There's only a very narrow gap between the warranty expense rates of large vehicle manufacturers and their suppliers. And while some manufacturers are reducing their warranty costs, many are simply returning to the expense rates they've had for most of the past decade.

January 16, 2014

Warranty Expense Reductions: As the year comes to a close, we take a look at which of the largest warranty providers has achieved the largest expense rate reductions in the past 12 months. But in order to compare companies against each other, first we have to compare each company to itself over time.

December 19, 2013

Warranty Cost Reduction: Billions of dollars have been saved in the past decade as American manufacturers find ways to reduce their warranty expenses. Now we're naming names and showing the decline in charts that measure warranty expenses as a percentage of product sales.

Food Service Equipment Warranties: The commercial appliances used in restaurants cost more to buy but less to keep in good working order. Over the past 10 years, the average warranty expense rates for professional food service equipment has been less than half as much as for home kitchen appliances.

Medical & Scientific Equipment Warranties: Most of the manufacturers in this industry have low warranty expense rates, except for those whose products use lasers or X-rays. But while their expenses are higher, they've also done the most to reduce warranty costs over the past decade.

Aerospace Warranty Report: While a huge increase in Boeing's warranty costs is driving up the average for aerospace OEMs, the suppliers of avionics, jet engines, spare parts and other aircraft components are seeing their lowest warranty expense rates of the past decade.

Semiconductor Warranty Report: Unlike in most industries, with integrated circuits the production machinery generates most of the warranty cost while the actual products made by those machines generate less. However, the machinery makers have done a much better job of reducing their warranty expenses over the past decade.

Warranty Week 10th Anniversary: Over the past decade, as warranty professionals began to pay more attention to warranty chain management, a publication was launched that paid attention to them. And warranties have never mattered more, or cost their providers less.

December 20, 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

Aerospace Warranties: The makers of Boeings, Cessnas and Gulfstreams haven't made much improvement in the past five years. But their suppliers continue to boost revenue, cut costs, and reduce warranty expenses as a percentage of sales. And that divergence got worse as 2011 ended.

Warranty Experts: Attendees of this year's WCM Conference will have a rare chance to not only learn from the experts, but to engage them in lengthy question and answer sessions about the past, present and future of the warranty industry. And those who haven't learned how to be in two places at once can watch it all later on video.

February 23, 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

Warranty Adjustments, Part 2: In the past few years, a small group of companies has made repeated and relatively large upwards adjustments to their warranty reserves. Are they simply bad at predicting the future? Or have they found a way to make their warranty costs look lower than they really are?

November 3, 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

Warranties During Disasters: While warranties cover defects and insurance covers damage, there is quite a bit of overlap between the two. And in the past month, disasters and disturbances have made people aware that it really can happen to them.

September 1, 2011

Appliance & HVAC System
Warranty Report: Every journey includes a few bumps, and both appliance and HVAC makers have hit a few in the past couple of years. But like other building material suppliers, they're doing much better than the homebuilders, because they have both home renovations and replacements to fall back on.

Vehicle Service Contract
Attachment Rates: Has the chaos of the Great Recession actually increased the appeal of vehicle service contracts? Auto dealers aren't selling as many as they used to, but for at least the past five years roughly one out of every three customers has bought one. And the recent trend seems to have been upwards, as unlikely as that sounds.

January 28, 2010

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.

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: 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

Aerospace Warranties: Though the industry trend is upward, some aerospace companies have managed to reduce their warranty expenses significantly over the past five years. But a few have recently seen their warranty costs go back up.

Top 100 Warranty Providers: Key ratios show how some manufacturers have made fairly radical changes in their warranty finances over the past year. But, like a dog that doesn't bark, what's remarkable is how few of the biggest warranty providers have seen relatively big increases or decreases since March 2007.

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.

Top 100 Warranty Providers: While manufacturers' warranty costs shouldn't be compared directly against one another, they can be compared against themselves over time. And when one looks at those with the biggest percentage increases and decreases, one sees the biggest warranty winners and losers of the past year.

January 10, 2008

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 Reporting vs. Analytics: One turns the past into charts. The other turns the future into actionable items. But some people who know the difference between the two don't want to talk about it, for fear that they'll lose an edge on their competition.

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

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

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.

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

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