ADVERTISEMENT
  • News
  • New York
  • Technology
  • Culture
  • Entertainment
  • Sport
  • More
    • Politics
    • Lifestyle
    • TV
    • Games
Wednesday, July 16, 2025
  • Login
No Result
View All Result
NEWSLETTER
FINCHANNEL
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
No Result
View All Result
FINCHANNEL
No Result
View All Result
Home Business Insurance

Product recall risks growing in size and number as technology drives new triggers, warns Allianz

The FINANCIAL by The FINANCIAL
December 7, 2017
in Insurance
Reading Time: 4 mins read
11
A A
0
Product recall risks growing in size and number as technology drives new triggers, warns Allianz
Share on FacebookShare on Twitter

The FINANCIAL — A faulty pedal causes a car to inadvertently accelerate. An outbreak of contaminated peanuts results in a 25 percent industry-wide reduction in sales.

Each of these incidents triggered major product recalls, resulting in billion dollar losses. Product-related risk is one of the biggest perils facing businesses today, with recall exposures having increased significantly over the past decade, bringing the potential for larger and more complex losses than ever before, warns insurer Allianz Global Corporate & Specialty (AGCS) in a new report. It highlights the automotive industry as being the most impacted by product recalls, followed by the food and beverage sector, based on analysis of insurance claims.

“Product recalls have risen steadily in the past decade. We are seeing record levels of recall activity in size and cost today,” says Christof Bentele, Head of Global Crisis Management at AGCS. “Tougher regulation and harsher penalties, the rise of large multi-national corporations and complex global supply chains, growing consumer awareness, impact of economic pressures in research and development (R&D) and production and even growth of social media are just some of the contributing factors behind this.”

RelatedPosts

How Can a Personal Injury Lawyer Help Me With My Premises Liability Case?

Fortifying Your Finances: Essential Tips for Protecting Your Assets

Insurers boost private assets allocations as capital increases

How Much Health Insurance Do You Need for Your Parents?

Defective products not only pose a serious safety risk to the public but can also cause significant financial damage to the companies responsible. Defective product/work-related incidents have caused insured losses in excess of $2 billion over the past five years, making them the largest generator of liability losses, according to analysis of insurance industry claims by AGCS. Recall claims are a major contributor to this total, alongside product liability claims.

The report “Product Recall: Managing The Impact of the New Risk Landscape” analyzes 367 insurance industry product recall claims from 28 countries across 12 industry sectors between 2012 and the first half of 2017. Overall defective product or work is the major cause of recall claims, followed by product contamination. The average cost of a significant incident is in excess of $12 million (10.5 million euros), with the costs from the largest events far exceeding this total. Over 50 percent of losses arise from 10 incidents. The IT/electronics sector is the third most affected industry after automotive and food and beverage, according to the claims analysis.

Automotive recalls most expensive and large-scale due to “ripple effect”

Automotive recalls account for over 70 percent of the value of all losses analyzed, which is unsurprising given recent record levels of activity in both the United States and Europe. “We see an increasing number of recalls with higher units in the automotive industry,” says Carsten Krieglstein, Regional Head of Liability, Central & Eastern Europe, AGCS. “This is driven by factors such as more complex engineering, reduced product testing times, outsourcing of R&D and increasing cost pressures. The technological shift in the automotive industry towards electric and autonomous mobility will create further recall risks.”

One of the largest recalls to hit the auto industry to date, involving defective airbags, is expected to result in some 60-70 million units across at least 19 manufacturers being recalled worldwide. Costs have been estimated at close to $25 billion. This incident exemplifies the growing “ripple effect” which impacts the automotive sector, but also other industries. Given the use of many common components, a single recall can impact a whole industry.

Food and beverage is the second most impacted sector, accounting for 16 percent of analyzed losses with the average cost of a significant product recall claim almost $9.5 millio (8 million euros). Undeclared allergens (including mislabeling incidents) and pathogens are a major issue, as is contamination from glass, plastic and metal parts. Malicious tampering and even extortion incidents pose an increasing threat, as well as the growth of “food fraud”, which has become a major issue, resulting in reputational damage and major losses, as seen in the horse meat scandal in Europe four years ago.

See also  How Can a Personal Injury Lawyer Help Me With My Premises Liability Case?

The report also notes that products from Asia continue to account for a disproportionate number of recalls in the U.S. and Europe, reflecting the eastwards shift in global supply chains and historically weaker quality controls in some countries. Yet increasing safety regulation and consumer awareness is ensuring recall activity is also rising across Asia.

Technology to prevent and drive future recall risks

The report also identifies emerging recall triggers that will drive future risks and claims, largely stemming from new technologies. Advances in product testing such as genome-sequencing technology will make it easier for regulators and manufacturers to trace contaminated products in future, potentially saving lives, but also potentially spiking litigation activity, as liable parties can be more easily identified.

Cyber recalls may become an increasing reality. Hackers could change or contaminate a product by controlling machinery in automated production plants. “Cyber is currently an underestimated risk,” says Bentele. “We have already seen recalls due to cyber security vulnerabilities in cars and cameras.” Innovative but untested technologies such as artificial intelligence and nanotechnology could also transform recall risk.

Social media is a fast and effective way of communicating with customers but can also exacerbate recall risk if not well-managed. “Social media is a real game-changer for product recall,” says Stewart Eaton, Head of Product Recall, UK, AGCS. “An erroneous post or tweet can cause reputational damage and directly impact the size of a recall, meaning companies need to react faster than before.”

Recalls for ethical and reputational, rather than safety, reasons are also on the rise, such as in cases where child or slave labor has been used in the supply chain or where food such as halal or vegan has been mislabeled or counterfeited. “There will be incidents when there is no legal requirement to recall but it is the right thing to do. This is a genuine business risk which companies have to be prepared for,” Bentele says.

Pre-event crisis management as part of corporate DNA

Pre-event planning and preparation can have a big impact on the size of a recall and the financial and reputational damage sustained. As part of a holistic risk management program, specialized product recall insurance can help businesses recover faster by covering the costs of a recall, including business interruption. It also provides access to crisis management services, and consultants, which can test a company’s procedures and offer global support in areas such as regulatory liaison, communications, product traceability and tampering investigations and even genome sequencing and DNA testing to understand a product contamination.
“There is now much more attention on how companies deal with defective or contaminated products, how responsive they are and how resilient their safety systems are. More than ever consumers are also part of the agenda and are driving company behavior by making their choices subject to how companies deal with crises. A company that embraces crisis management, and makes it part of its DNA, is far less likely to suffer a major incidence,” says Bentele.

 

Related Posts

How Can a Personal Injury Lawyer Help Me With My Premises Liability Case?
Insurance

How Can a Personal Injury Lawyer Help Me With My Premises Liability Case?

by The FINANCIAL
June 27, 2025
0

Did you know that dog bites, which often fall under premises liability, affect 4.5 million Americans annually? Premises liability holds...

Read more
Fortifying Your Finances: Essential Tips for Protecting Your Assets

Fortifying Your Finances: Essential Tips for Protecting Your Assets

June 24, 2025
 ‘Why Did My Car Insurance Go Up for No Reason?’

Insurers boost private assets allocations as capital increases

June 17, 2025
Voters Still Support Allowing Health Insurance To Be Sold Across State Lines

How Much Health Insurance Do You Need for Your Parents?

May 27, 2025

Discussion about this post

  • Trending
  • Comments
  • Latest
Teaching porn literacy

A sizable percentage of internet porn users, roughly 40% are women

January 17, 2024
Ampersand wins £22m five-year contract at London Zoo

Ampersand wins £22m five-year contract at London Zoo

June 25, 2012
2025 Review Of NEXT New Growth | Executive Coaching For CFOs

2025 Review Of NEXT New Growth | Executive Coaching For CFOs

July 4, 2025
Spot Hbar ETF Odds Increase to 90% as Institutions Bet Big on Hedera

Spot Hbar ETF Odds Increase to 90% as Institutions Bet Big on Hedera

July 3, 2025
SCOPE Recruiting: Honest Review For 2025

SCOPE Recruiting: Honest Review For 2025

July 3, 2025
OCCRP investigation: Danish Company Affiliate Helping Russians Export Grain From Occupied Ukraine

OCCRP investigation: Danish Company Affiliate Helping Russians Export Grain From Occupied Ukraine

July 16, 2025
How Mark Lamberti Challenged Retail Convention in the Last Days of Apartheid

How Mark Lamberti Challenged Retail Convention in the Last Days of Apartheid

July 16, 2025
Existing-Home Sales Spring Ahead in March

Should You Fix Up Your House or Sell It As-Is?

July 15, 2025
Richard Branson: What’s one daily habit that has shaped you as a person?

Richard Branson: What’s one daily habit that has shaped you as a person?

July 11, 2025
Most Americans continue to say media scrutiny keeps politicians from doing things they shouldn’t

Dramatic rise in the number of journalists killed in six months



July 11, 2025
ADVERTISEMENT

Popular Last 24h

  • Teaching porn literacy

    A sizable percentage of internet porn users, roughly 40% are women

    913 shares
    Share 365 Tweet 228
  • Ampersand wins £22m five-year contract at London Zoo

    4143 shares
    Share 1657 Tweet 1036
  • OCCRP investigation: Danish Company Affiliate Helping Russians Export Grain From Occupied Ukraine

    33 shares
    Share 13 Tweet 8
  • How Mark Lamberti Challenged Retail Convention in the Last Days of Apartheid

    20 shares
    Share 8 Tweet 5
  • The London Diplomatic List, Addresses, Contacts & Working Hours

    3397 shares
    Share 1359 Tweet 849
  • Teaching porn literacy

    365 shares
    Share 146 Tweet 91
  • Prominent Georgian Businessman Behind Euronews and National Geographic Arrested in Tbilisi

    165 shares
    Share 66 Tweet 41

LATEST POSTS

OCCRP investigation: Danish Company Affiliate Helping Russians Export Grain From Occupied Ukraine

OCCRP investigation: Danish Company Affiliate Helping Russians Export Grain From Occupied Ukraine

July 16, 2025
How Mark Lamberti Challenged Retail Convention in the Last Days of Apartheid

How Mark Lamberti Challenged Retail Convention in the Last Days of Apartheid

July 16, 2025
Existing-Home Sales Spring Ahead in March

Should You Fix Up Your House or Sell It As-Is?

July 15, 2025
Richard Branson: What’s one daily habit that has shaped you as a person?

Richard Branson: What’s one daily habit that has shaped you as a person?

July 11, 2025
Most Americans continue to say media scrutiny keeps politicians from doing things they shouldn’t

Dramatic rise in the number of journalists killed in six months



July 11, 2025
Euro area international trade in goods surplus €7.3 bn

Trade talks EU–US: Trade in services should be taken into account

July 11, 2025
Private Equity Giant H.I.G. Capital Nets Strong Returns on Jewelry Brand While Betting Big on Canadian Fuel Services

Private Equity Giant H.I.G. Capital Nets Strong Returns on Jewelry Brand While Betting Big on Canadian Fuel Services

July 11, 2025
Update by The Florida Department of Transportation: Key Improvements

Update by The Florida Department of Transportation: Key Improvements

July 11, 2025
Smart Storage: Creative Ways Mini-Storage Buildings Are Meeting Modern Needs

Smart Storage: Creative Ways Mini-Storage Buildings Are Meeting Modern Needs

July 11, 2025
Moldova’s Virtual IT Park Attracts Global Attention with Record Growth and €1 Billion Revenue Target

Moldova’s Virtual IT Park Attracts Global Attention with Record Growth and €1 Billion Revenue Target

July 9, 2025

LATESTBUSINESS

Existing-Home Sales Spring Ahead in March

Should You Fix Up Your House or Sell It As-Is?

by The FINANCIAL
July 15, 2025
0

Private Equity Giant H.I.G. Capital Nets Strong Returns on Jewelry Brand While Betting Big on Canadian Fuel Services

Private Equity Giant H.I.G. Capital Nets Strong Returns on Jewelry Brand While Betting Big on Canadian Fuel Services

by The FINANCIAL
July 11, 2025
0

Smart Storage: Creative Ways Mini-Storage Buildings Are Meeting Modern Needs

Smart Storage: Creative Ways Mini-Storage Buildings Are Meeting Modern Needs

by The FINANCIAL
July 11, 2025
0

Moldova’s Virtual IT Park Attracts Global Attention with Record Growth and €1 Billion Revenue Target

Moldova’s Virtual IT Park Attracts Global Attention with Record Growth and €1 Billion Revenue Target

by The FINANCIAL
July 9, 2025
0

wall_street_sign.jpg

Wall Street Giants Now Worth $59.7 Trillion, More Than the GDP of the U.S., China, and Germany Combined

by The FINANCIAL
July 9, 2025
0

Are You Really Targeting the Right Customer

Are You Really Targeting the Right Customer

by The FINANCIAL
July 8, 2025
0

Prominent Georgian Businessman Behind Euronews and National Geographic Arrested in Tbilisi

Prominent Georgian Businessman Behind Euronews and National Geographic Arrested in Tbilisi

by The FINANCIAL
July 7, 2025
0

Etisalat and Ericsson trial Massive MIMO technology in the UAE

Global study shows 96% plan to increase yield focus in anticipation of market correction

by The FINANCIAL
July 7, 2025
0

GET IN TOUCH

Submit guest post/Letters to the Editor:

editor (at) finchannel.com

Sales & Marketing: (+995 558) 03 03 03 Email: marketing (at) finchannel.com

Whatsup: (+995 599) 96 52 52

Georgia:

(+995 599) 96 52 52 Email: editor (@) finchannel.com

Postal address: 17 Mtskheta str. Tbilisi, Georgia 0179 The FINANCIAL

RESOURCE

  • Work at the FINANCIAL
  • ePaper
  • Advertise in The FINANCIAL
  • Access ePaper
  • Guest posts
  • Contributed articles
  • AmericanStockNews
  • Coupon Codes
  • GLOSSY MAG
American Culture Center
ACC Partner

GUIDEBOOK

  • Meet our team
  • Invest in Georgia
  • Become contributor
  • Archive

FOLLOW US

  • Facebook
  • Twitter
  • Google+
  • Youtube
No Result
View All Result
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE

© 2025 Intelligence Group llc

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.