Warranty and service contract consulting

The challenge

The success of a warranty or service contract program relies on proper forecasts and analytics. The cost of claims can depend on a number of factors that go beyond simple product failure – warranty cost and duration, product mix, seasonal patterns, changes in consumer behavior, and more. These factors are difficult to predict, and when not properly understood and managed, can have significant effects on a program’s profitability.

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Our solutions

Milliman helps clients analyze the underlying risks of their warranty and service contract programs – so they can make better informed business decisions and maximize profitability.

Using our decades of experience in the warranty business, we work with both insurance and noninsurance clients to deliver innovative and high-quality consulting solutions and consistent, responsive support.

We use our understanding of the financial mechanisms underlying risk, expertise in predictive analytics, and advanced modeling tools to help our clients.

Identify which portfolio segments are most profitable

Make educated pricing and marketing decisions

Stay up to date on industry and market best practices

Gain a strategic edge over competitors

Our services

We offer consulting services that cover all major warranty-related issues. Our assessments are based on a methodology that has been reviewed and approved by most major auditors.

Actuarial opinions
Captive feasibility
Expert-witness testimony
Launch of new products
M&A due diligence

Price modeling
Reserve management
Revenue pattern recognition
Impacts of coverage changes
Warranty goodwill valuation

Our experience

We help our clients manage reserves, develop earnings patterns, set accurate pricing, and navigate mergers and acquisitions. We have experience working with a wide range of clients, product types, and applications, including:

Who we support

Insurers
Captive insurers
Administrators
Manufacturers
Retailers
Service providers
Energy companies
Private equity firms
F&I providers
Law firms
Startups

Applications

Appliances
Automobiles/vehicles
Consumer electronics
Furniture
Heavy equipment
Home
Tools
Other non-traditional exposures

Product types

Warranties
Extended warranties
Maintenance agreements
Extended service plans/contracts
Vehicle service contracts (VSCs)
Guaranteed Asset Protection (GAP)
Other F&I products

Using predictive analytics for warranties and service contracts

Our use of predictive analytics gives clients another competitive advantage to help maximize profitability. Our models help identify what segments of our clients' portfolios are most profitable, allowing the business to make educated pricing and marketing decisions.

Our experts

Connect with a Milliman warranty and service contract program expert.

Tim Vosicky

Principal

Tim Vosicky is a principal and consulting actuary in the Chicago Casualty Practice of Milliman. He joined the firm in 2010. He provides project management experience across many types of projects, varying scopes, and tight timelines.

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