In response to growing concerns over the financial impact and frequency of product recalls for food and beverage businesses in New Zealand, AIG has launched NOVI, an innovative web-based service to help companies estimate the cost of recall incidents.
“NOVI helps food and beverage manufacturers understand their exposure to a recall event, and make more informed decisions about how to manage their risk,” says Nicky Alexandru, vice president for Crisis Management, Global Casualty, AIG. “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.”
NOVI is a first-of-its-kind web-based service that can estimate a company’s probable maximum recall loss in the event of an accidental contamination.
The estimation process uses more than 80 data points and a proprietary methodology based on AIG’s more than 25 years’ experience providing contaminated product insurance, extensive analysis of thousands of recall incidents, and input from a leading food safety consultant, NSF International.
“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 New Zealand alone. Maintaining food safety standards and managing recall risk are two pressing issues for New Zealand companies. Through NOVI we can now assist companies in quantifying a potential threat to their business so that they can manage their risk more effectively” says Suzanne Brown, liabilities senior underwriter, AIG New Zealand.
“Expenses from a product contamination recall event can mount quickly. These can include replacement and destruction costs, lost profit from plant shutdowns, government intervention, and brand and reputational damage” she says.
This free, confidential service is now available to food and beverages manufacturers in New Zealand and can now be accessed here – www.aig.com/nz/novi