Restructured warranty program boosts performance for manufacturer

The challenge

A major manufacturer of power-sport vehicles needed help restructuring and rightsizing a large, longstanding extended warranty program. The manufacturer had an outdated carrier contract. It was seeking expertise with reporting, program performance, and obtaining favorable underwriting terms commensurate with the size and scope of the portfolio.

The solution

Marsh engaged with the manufacturer to understand the business and build a comprehensive solution. Using our proven methodology, Marsh was able to:

• Review current portfolio performance, growth expectations, and areas of concern, and make recommendations for improvement.
• Assist in negotiations of the most favorable financial and operational structure with the chosen carrier.
• Implement state of the art, on demand, analytics tools to provide unparalleled transparency and predictive modeling of current and future portfolio performance.
• Developed and executed on strategy with the warranty program and risk management teams.

The results

Our guidance and solutions allowed the organization to:

• Reduce broker and carrier fees by 50%.
• Increase revenue and attach rates by rightsizing premiums commensurate with program performance based on analytics outputs.
• Accelerate profit share and receive an early release of future profits.
• Transfer risk to a parent-owned captive.
• Introduce complete program transparency, allowing for more financial control.
• Have a long-term strategic partner for its extended warranty program.