Companies can now estimate the cost of recall incidents in the food and beverages market with the help of AIG’s new insurance product.
NOVI is a unique web-based service that uses over 25 years of global recall incidents and insurance input to estimate a company’s maximum recall loss in the event of a contamination.
Nicky Alexandru, AIG Global Casualty Crisis Management Vice President, says the service will alert companies to the cost of a recall event to business.
“NOVI helps food and beverage manufacturers understand their exposure to a recall event, and make more informed decisions about how to manage their risk,” he says.
“While most companies are generally aware of the frequency of product recalls, they are unsure of the potential magnitude of the cost of a recall event.”
Claire Richards, AIG’s Crisis Management Manager, says the innovative service addresses the industry’s growing concern of financial impacts to their business.
“Expenses from a product contamination recall event can mount quickly. These can include replacement and destruction costs, lost profit from plant shutdowns, government intervention, loss of profits and brand and reputational damage,” she says.
“There are on average, five product recalls reported every month in the food and beverage industry in Australasia, with two to three incidents occurring in Australia alone.
“Maintaining food safety standards and managing recall risk are two pressing issues for Australian companies and, through NOVI, we can now assist companies in quantifying a potential threat to their business so that they can manage their risk more effectively.”