With proven financial backing, The Warranty Group is free to put its focus where it belongs-on its customers
By Stephanie Andre
RISMEDIA, May 21, 2008-Economically, not much is certain these days. From the market downturn to the government’s financial woes, a home buyer-or even homeowner, for that matter-is looking for some stability in the real estate transaction. One thing that they can be sure of, however, is a home warranty from The Warranty Group. “We are selling a promise of future delivery,” explains Michael Frosch, president of The Warranty Group’s consumer goods warranty unit. “…The last thing an agent needs-especially given market conditions-is to worry if their home warranty provider is going to be around when it comes time to pay a claim.” In this feature, Frosch explains why his company is a guaranteed service provider, how it has a leg-up on the competition and why it’s so financially secure.
Real Estate: The Warranty Group has such a vast array of products, including home warranty. How does your company’s involvement in real estate compare with the other fields it’s involved in?
Michael Frosch: Overall, The Warranty Group is what its name is-we sell warranties and warranty solutions and we’ve done so for more than 43 years. It’s our only business. Obviously, home warranty is a large piece of what we do, especially as it relates to real estate professionals. However, we also work with mortgage companies and originators, and offer many other products that relate to real estate, including HVAC service contracts, identity theft resolution and involuntary unemployment insurance.
RE: What differentiates your company from others in the field?
MF: The financial backing. We are selling a promise of future delivery. By having a secure financial structure, we are saying that we will be here tomorrow. For a fee today, we promise over the next year or two that we will fix “this” or replace “that.” The last thing an agent needs-especially given market conditions-is to worry if their home warranty provider is going to be around when it comes time to pay a claim.
The goal is to sell a home or find that right person to buy the house. We’re one of the items that helps sell that house. After all, the buyer is someone who hasn’t lived in the home before. They need to be secure in knowing that if they need to call upon their home warranty provider that someone’s going to answer the phone.
RE: A lot of home warranty companies offer a few different plans from which customers can choose. Can you explain how your company can custom-tailor its home warranties?
MF: We are the home warranty’s actual underwriter and administrator, so we have the ability to customize whatever’s needed. TWG Home Warranty Services, Inc. is one of the largest providers of home protection plans, selling and supporting hundreds of thousands of policies annually, underwritten by Virginia Surety Company, Inc., rated A- (Excellent) by AM Best.
Another big point of differentiation for us is that we work with brokers directly. We build the product to fit their needs, according to how they want the customer experience handled. We have the ability to actually build an individual product for them.
If you look at the fundamentals of business, the first thing is to take care of your customers. A home warranty provides incredible value. In fact, about 70% of home warranties purchased will have a claim. So, it’s very important to have the right product and always exceed expectations.
RE: What’s the number-one thing you want real estate professionals to know about your company?
MF: The first thing anyone-whether you’re a consumer, broker or agent-needs to know about any company is who’s backing it and is the financial stability and security there. We have that. That can impact companies of any size-small, medium or large. Your customers need to know what vehicle is backing the program.
Especially with the market so tight, agents really are looking for something to separate them from the masses of agents vying for business. If they know that they’re with a secure and stable home warranty provider, it’s one less thing they need to be concerned with.
I can only imagine the challenge of being an agent and doing everything right-getting the deal done, getting your buyers into their new dream home, recommending a home warranty and then the company not being there. That’s where our financial stability really sets us apart.
RE: What are some of the other products you offer?
MF: We have various channels of warranty distribution: retail, credit, financial services organization and travel. You can even buy individual warranties on specific products, for example, an appliance or a consumer electronic warranty. We also offer auto programs, as well as products that can be used as enhancements when purchasing other warranties. For example, a broker or lender may choose to enhance their offering with products such as involuntary unemployment insurance, ID theft or purchase protection. We have hundreds of products available.
RE: Do you plan to expand any further into the real estate space?
MF: Yes, we do. In fact, we’re already expanding. We now sell warranties for water lines and HVAC products, just to name a few. We participate in programs everywhere, working with various water companies across the U.S. We think of these programs as component-level programs, meaning that it would essentially come with the sale-“If you simply buy your home through me, you will get HVAC coverage.”
RE: With the market shift, have you seen a change in the acceptance/approval of home warranties by brokers and agents?
MF: We’ve seen much more acceptance and adoption now than we did, say, five years ago. Now, there’s more knowledge and understanding about how integral a home warranty is to the transaction.
For more information, contact Michael Frosch at mike.frosch@us.thewg.com.
