The warranty program challenge
A global car manufacturer raised concerns that its extended warranty program wasn’t profitable and causing profit margin issues. Pricing was based on a limited set of factors that didn't reflect the current risk landscape, or the repair costs associated with warranty claims.
The warranty program solution
We worked in collaboration with the manufacturer, plus our Affinity Insurance team, to produce a new warranty pricing strategy and update the manufacturer’s management information systems, tailoring different elements to the needs of the business. The solution included the following elements:
The manufacturer’s team was better equipped to manage the warranty program more efficiently.
The warranty program outcome
The implementation of the new pricing model and management tools had a significant impact on the motor extended warranty program, delivering:
The dashboard enabled the manufacturer to continuously monitor performance of the warranty program and make informed decisions based on up-to-date data and comparing predicted performance against actual emerging experience. It was able to show claims mitigation measures could improve the loss ratio for the warranty program by 30%.
Ready to take more control and get more value from your warranty program? Request a demo of our in-house solutions or speak to our actuarial specialists today.
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