Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Connect with us

Telecom

Product Recall Risks Growing In Size & Number, Technology Drives New Triggers- Allianz

Published

on

Kindly share this post

By peter oluka

Defective product risk is an increasing peril for companies, causing significant financial damage, according to a Allianz Global Corporate & Specialty (AGCS) report.

A faulty pedal causes a car to inadvertently accelerate. An outbreak of contaminated peanuts results in a 25% 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,” said 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.”

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 US$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 US$12 million (€10.5 million), with the costs from the largest events far exceeding this total.

Over 50% 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% of the value of all losses analyzed, which is unsurprising given recent record levels of activity in both the US and Europe.

“We see an increasing number of recalls with higher units in the automotive industry,” said 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 to 70 million units across at least 19 manufacturers being recalled worldwide. Costs have been estimated at close to US$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% of analyzed losses with the average cost of a significant product recall claim almost US$9.5 million (€8 million). 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.

The report also notes that products from Asia continue to account for a disproportionate number of recalls in the US 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.

Allianz Global Corporate & Specialty Product Recall Risk Cyber

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,” said 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 said.

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,” said Bentele.


Kindly share this post

Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

Telecom

Celebrating African Creativity: Made by Africa, Loved by the World’ Returns for Its Fifth Year

Published

on

Kindly share this post

The “Made by Africa, Loved by the World” campaign is back for its fifth year, celebrating African creativity and global influence. This year’s theme, “Where Culture Meets Connection,” highlights how social media fosters conversations around cultural moments worldwide.

The campaign features three cinematic films premiering on the Meta Africa page, showcasing the groundbreaking work and personal stories of six dynamic African creatives.

These artists, from Nigeria, Kenya, Ghana, and South Africa, represent diverse disciplines, including rap, animation, dance, photography, fashion, and videography.

Here are some of the featured talents:

  • Ladipoe (Nigeria) – A BET-nominated rapper known for blending global hip-hop with African rhythms.
  • Fatboy Animations (Kenya) – An animation studio founded by Michael Muthiga, recognized by Forbes for its original African storytelling.
  • Lisa Quama (Ghana) – A dancer who gained fame after appearing in Beyoncé’s “Already” music video.
  • Gilbert Asante (Ghana) – A photographer and creative director featured in GQ and Glam Africa.
  • David Tlale (South Africa) – A fashion designer whose bold designs have been showcased at major fashion events, including the Met Gala.
  • Ofentse Mwase (South Africa) – A filmmaker with over 24 international awards for his unique visual storytelling.

Kezia Anim-Addo, Communications Director for Africa, Middle East & Turkey, emphasized that the campaign not only celebrates individual success stories but also showcases how culture and social media drive meaningful connections and inspiration.


Kindly share this post
Continue Reading

Telecom

Telcos Warn of Nationwide Telecom Blackout over Diesel Shortage

Published

on

Mr Tony Emoekpere, president, ATCON
Kindly share this post

Association of Telecommunications Companies of Nigeria (ATCON), has raised the alarm over a diesel supply crisis caused by an ongoing strike by the National Union of Petroleum and Natural Gas Workers (NUPENG).

Telcos Warn of Nationwide Telecom Blackout over Diesel Shortage

Mr Tony Emoekpere, president, ATCON in a statement said that the fuel supply disruption is critically affecting telecom base stations, pushing them to the brink of a shutdown and threatening millions of mobile and internet users in the region.

“This strike, which stems from the persistent harassment of tanker and petroleum product drivers by police officers in Lagos State, has effectively halted all truck loading operations and fuel movements,” Emoekpere stated.

He explained that diesel supply to telecom infrastructure has been severely impacted, leaving critical sites with dangerously low fuel levels.

According to him, if urgent measures are not taken, the situation could escalate into a full-blown network blackout, disrupting essential services, including mobile and internet access, business operations, emergency response systems, and daily communications.

ATCON has called on the governors of Lagos and Ogun states to intervene immediately by facilitating the release of diesel from depots to telecom operators to prevent further deterioration of the situation.

“This is not just a telecom issue—it is a national emergency that could cripple economic activities and compromise public safety,” Emoekpere stressed.

The association also appealed to security agencies and petroleum unions to resolve the crisis swiftly to safeguard Nigeria’s connectivity and economic stability.

ATCON emphasised that a prolonged disruption in fuel supply to telecom infrastructure could have far-reaching consequences for both businesses and individuals who rely on stable communication networks for daily operations.

 

 

 


Kindly share this post
Continue Reading

Telecom

Nigerians Spend N5.3 Trillion on Telecom Services

Published

on

Kindly share this post

In 2023, Nigerians spent a total of about ₦5.3 trillion on telecommunications services, which includes calls, data, SMS, and other telecom services, according to the Leadership.

Nigerians Spend N5.3 Trillion on Telecom Services

Specifically for voice calls, Nigerians made approximately 408.5 billion minutes of local calls, generating around ₦3.28 trillion from outgoing calls and ₦3.23 trillion from incoming calls, totaling about ₦6.51 trillion in call-related revenue according to projections based on 2023 call volumes and tariff data.

However, the ₦5.3 trillion figure represents the overall telecom sector revenue, with voice calls being a major component but also including data and other services.

For individual spending, MTN subscribers spent an average of ₦2,508 monthly on voice calls in 2023, showing a 14.4% increase from 2022, while Airtel customers spent about ₦1,694 monthly on voice calls.

Total telecom spending (calls, data, SMS, etc.): ₦5.3 trillion in 2023

Estimated revenue from voice calls alone: around ₦6.5 trillion based on call minutes and tariffs

Average monthly spending on calls per subscriber: ₦1,694 to ₦2,508 depending on the network

 

 

 


Kindly share this post
Continue Reading

Trending