Second Annual Conference September 16 -18, 2015

Second Annual Conference September 16 -18, 2015
Second Annual Conference
September 16 -18, 2015
Palmer House
Chicago IL
State of the Service
Contract Industry
Eric Arnum
Editor, Warranty Week
2
Product Warranty Trends
• Claims payments peaked in 2008
• U.S. manufacturers paid $29.5 billion in claims
• Recession took hold 2008-2012
• Claims payments declined to $25.6 billion
• Warranty cost reductions & rising product quality
• Rising warranty expense rates 2013-2014
• Sales rise but warranty costs rise a bit faster
• New home sales & passenger car recalls soar
3
Manufacturer’s Warranty Costs
Claims Paid Worldwide by U.S. Companies, 2003-2014
$40,000
Other
$35,000
Homes
$30,000
$25,000
Appliances
$20,000
Electronics
$15,000
Phones
$10,000
Computers
$5,000
Vehicles
$0
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Source: Warranty Week
U.S. Warranty Expense Rates
Warranty Claims & Accrual Rates, 2003-2014
Accrual Rate (%)
Claims Rate (%)
1.9%
1.9%
1.8%
1.8%
1.7%
1.7%
1.6%
1.6%
1.5%
1.5%
1.4%
1.4%
1.3%
1.3%
1.2%
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
1.2%
Source: Warranty Week
Service Contract Trends
• Changing Underwriters & Administrators
•
•
•
•
•
T-Mobile - from Asurion to Assurant
Home Depot - from Assurant to Asurion
Sprint - from Assurant to eSecuritel / Zurich American
Staples - from Assurant to SquareTrade
SquareTrade - from AmTrust to Starr to ???
• Retailers Going Out of Business
• Radio Shack
• J&R Music World
• American TV & Appliances
6
Service Contract Trends
• New Market Entrants
•
•
•
•
eSecuritel (subsidiary of Brightstar Corp.)
Fortegra (now part of Tiptree Financial Inc.)
New Leaf Service Contracts LLC
Starr Indemnity enters then exits the business
• Acquisitions & Partnerships
• Staples buys Office Depot, which buys OfficeMax
• AmTrust buys Warranty Solutions from Wells Fargo
• Best Buy to sell AppleCare service contracts
7
U.S. Extended Warranty Market
Premiums Paid by U.S. Consumers, 2003-2015
$45,000
$40,000
Home
Warranty
$35,000
Appliance
$30,000
CE
$25,000
$20,000
Mobile
$15,000
PC
$10,000
$5,000
VSC
$0
'03 '04
'05 '06 '07 '08
'09 '10 '11 '12
'13 '14 '15
Source: Warranty Week estimates
U.S. Extended Warranty Market
Premiums Paid by U.S. Consumers, 2015
Mobile
Phone
23%
PC
11%
CE
17%
Home Warranties 4.8%
Appliances 3.6%
Auto
41%
Total $40.9 B
Source: Warranty Week estimates
Vehicle Service Contract Market
Premiums Paid by Consumers, 2010
Warranty
Group
16.4%
Ford
3.3%
JM Family
3.6%
Assurant
13.2%
Toyota
4.9%
Allstate
9.8%
CNA
5.4%
Protective
9.3%
AmTrust
6.1%
Total $11.2 B
GMAC
6.9%
Zurich
9.1%
Source: Warranty Week estimates
Home Warranty Market Share
Premiums Paid by Consumers, 2009
American
Home
Shield
41%
HSUSA 3.3%
Dominion 3.7%
Fidelity
4.3%
2-10 HBW
5.3%
Total $1.5 B
First
CCHS
American
Old
6.0%
11%
Republic
8.3%
Source: Warranty Week estimates
Retail Electronics & Appliance
Service Contract Market Share
Premiums Paid by Consumers, 2015
CNA
13%
AmTrust
5%
Assurant
9%
Warranty
Group
5%
AIG
48%
Other
17%
Total $8.3 B
Source: Warranty Week estimates
Mobile Phone Handset Insurance
Premiums Paid by Consumers, 2014
AIG 1.5%
Zurich 4%
Assurant
Solutions
15%
CNA
49%
Verizon &
Liberty
Mutual
31%
Total $9.1 B
Source: Warranty Week estimates
U.S. Mobile Phone Protection
2009-2015 by Phone Cos., AppleCare & Other Retailers
$16,000
$14,000
AppleCare
$12,000
other retailers
$10,000
$8,000
$6,000
$4,000
$2,000
mobile phone protection plans sold by
US Cellular Phone Companies
$0
2009
2010
2011
2012
2013
2014
2015
Source: Warranty Week estimates
U.S. Extended Warranty Market
Premiums Paid by U.S. Consumers, 2009-2015
$45,000
$40,000
26%
$35,000
Everything
Else
$30,000
$25,000
$20,000
34%
Mobile
Phones
40%
Passenger
Cars
$15,000
$10,000
$5,000
$0
2009
2010
2011
2012
2013
2014
2015
Source: Warranty Week estimates
Eric Arnum, Editor
Warranty Week
10520 66th Road
Forest Hills NY 11375-2179
USA
+1 (718) 896-0367
http://www.warrantyweek.com
earnum@warrantyweek.com
Was this manual useful for you? yes no
Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Download PDF

advertising