The value, sized
On a $5.0bn industrial business, warranty is $70m a year. The leakage inside it is $8.4m, 7× what the people who process the claims cost.
Arithmetic, not modelling. Warranty runs at one to three percent of revenue, it is accrued on the balance sheet and the auditor tests the provision every year. The incumbent claims systems are rules engines with people around them; the agents sit on top of them, nothing is replaced. Move the revenue, switch the industry, open the assumptions.
Warranty spend, accrued$70m1.4% of revenue · provision on the balance sheet, tested by the auditor
Leakage inside it$8.4m12% of spend: overpaid labour, duplicates, out-of-policy approvals, defects never charged back
Leakage$8.4m
Claims team labour · 25k claims$0.9m
Supplier recovery gap$8.4m18% of spend recovered from suppliers today, 30% where attribution is systematic
Addressable, every year$16.8mLeakage plus recovery gap, before a single role changes
Why finance owns it
The warranty provision sits on the balance sheet, the auditor tests it every year, and the claims actuals set next year's accrual rate. That makes this a CFO number, not only a service number. Every decision below lands in that number with its evidence attached.
Why leakage, not labour
The people who process claims cost a fraction of what slips past them: labour claimed above standard time, the same failure paid twice, approvals outside policy, supplier defects nobody charged back. The case is loss prevention. Nobody's job is the saving.
The honest test
Run the four claims below. Each is one leakage path: a clean claim that should go touchless, an out-of-policy claim that needs goodwill, a duplicate that must be blocked, and a supplier defect that must be recovered. A person still signs the money.