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October 18, 2013
NEW YORKIn response to the growing financial impact and frequency of product recalls for food and beverage manufacturers, distributors and importers in the United States and Europe, American International Group (AIG) launched NOVI, a web-based service to help companies estimate the cost of recall incidents.
The free, confidential service is available in six languages to qualified food and beverage manufacturers in 11 countries, including the United States, United Kingdom, Germany, Austria, Belgium, Canada, Denmark, Italy, Netherlands, Spain and Switzerland.
On average, 30 class I and II product recalls occur every week in the food and beverage industry in the United States, and another 22 equivalent recalls are reported in Europe, according to AIG analysis of data from USDA and the European Union Rapid Alert System for Food and Feed (RASFF).
Expenses resulting from product contamination requiring a recall can include replacement and destruction costs and lost profit from plant shutdowns, government intervention and brand damage.
NOVI uses more than 80 data points and a proprietary methodology based on AIGs more than 25 years of experience providing contaminated product insurance, extensive analysis of thousands of recall incidents, and input from a leading food-safety consultant, NSF International.
NOVI helps food and beverage manufacturers make more informed decisions about how to manage their risk," said Nicky Alexandru, VP for Crisis Management, Global Casualty, AIG Property Casualty. These companies are generally aware of the frequency of product recalls. However, they are unsure of the potential magnitude of financial impact from a recall event."
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