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

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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.


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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

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Airtel, SpaceX Partner to Bring Starlink’s Connectivity Solutions to its Customers in Africa

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Airtel Africa has announced an agreement with SpaceX to bring Starlink’s high-speed internet services to its customers in Africa. Currently, SpaceX has acquired requisite licenses in 9 out of 14 countries within Airtel Africa’s footprint. Operating licenses for the other 5 countries are under process.

With this collaboration, Airtel Africa will further enhance its next-generation satellite connectivity offerings and augment connectivity for enterprises, businesses, and socio-economic communities like schools, health centres in even the most rural parts of Africa. Airtel Africa will also explore rural coverage expansion through cellular backhauling.

Airtel Africa and SpaceX will continue to explore other areas to promote digital inclusion in the continent as well as SpaceX’s ability to utilize and benefit from Airtel’s ground network infrastructure and other capabilities in Africa.

Airtel Africa MD and Chief Executive Officer Sunil Taldar said: “We remain deeply committed to our vision to enrich the lives of people of Africa. This partnership with SpaceX is a significant step to demonstrate our continued commitment to advancing Africa’s digital economy through strategic investments and partnerships.

Next-generation satellite connectivity will ensure that every individual, business, and community have reliable and affordable voice and data connectivity even in the most remote and currently under-served parts of Africa.”

SpaceX Vice President of Starlink Business Operations Chad Gibbs said: “We are very excited to work with Airtel to bring the transformative benefits of Starlink to the African people in new and innovative ways.

“Starlink is available in more than 20 African markets and this agreement with Airtel highlights how, once licensed, Starlink welcomes the opportunity to join forces with important industry leaders to ensure as many people as possible can benefit from Starlink’s presence.  The team at Airtel has played a pivotal role in Africa’s telecom story, so working with them to complement our direct offering across Africa makes great sense for our business.”


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How MTN Employees Are Driving Social Change Through the Power of Corporate Volunteerism

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In a world often dominated by corporate profit margins and bottom-line thinking, it’s easy to overlook the quieter revolutions happening behind the scenes.

In Nigeria, one such movement is being quietly driven not by executives in boardrooms, but by employees armed with a powerful sense of purpose to go make a difference.

Each year, MTN Nigeria’s staff volunteers set aside their day jobs to participate in Y’ello Care, the company’s corporate social responsibility initiative. But in 2024, they did more than volunteer — they raised over NGN20 million from their own pockets to renovate a crumbling school block at Iwerekun Community High School, Lakowe.

Iwerekun Community High School, before the intervention, was a picture of broken promise: dilapidated classrooms, leaking roofs, and a lack of basic facilities. Students struggled to learn in an environment that failed to inspire hope. Today, thanks to the hands-on efforts of MTN employees, the school boasts refurbished classrooms, a steady water supply, and even an inverter system to ensure stable electricity. More importantly, it offers a renewed sense of possibility.

Speaking about the 2024 edition, Tobe Okigbo, Chief Corporate Services & Sustainability Officer, MTN Nigeria, said, “Y’ello Care is the MTN Nigeria ecosystem giving back and contributing time, money, and resources to make a positive impact. Last year, we focused on education in remote areas, supporting three projects that will provide access to quality education for young Nigerians. And we are eager for the 2025 edition.”

Beyond renovations, previous editions of Y’ello Care have touched lives across Nigeria. Employees have organised vocational skill workshops, distributed learning materials through the KNOSK Charity Education Initiative, and mentored students to equip them for the future. From building digital libraries to delivering healthcare services through mobile clinics, MTN’s staff-led projects focus on long-term empowerment rather than short-term charity.

For many MTN volunteers, Y’ello Care is personal. Christiana Agyei, a participant in one of MTN’s earlier vocational training programmes, went from an unemployed single mother to a thriving entrepreneur. Today, she employs others in her soap-making business, a ripple effect that began with one employee-led workshop.

Over the past 18 years, Y’ello Care has grown into more than a CSR programme; it has become a culture within MTN, a living, breathing part of the company’s identity. Each initiative is not just a project, but a commitment to building the kind of Nigeria where opportunity isn’t determined by postcode or privilege.

At the commissioning of the Lakowe project, Honourable Jamiu Tolani Alli-Balogun, Commissioner of the Lagos State Ministry of Basic and Secondary Education, summed it up simply: “The education sector worldwide thrives on collaboration and commitment between public and private partners.

“MTN’s generous contribution is truly recognised, and I express my deepest gratitude for its unwavering commitment to supporting education in Lagos State.

“This new facility will provide a conducive environment for teaching and learning, enabling our students to reach their full potential.”

As Nigeria faces ever-evolving economic and social challenges, initiatives like Y’ello Care offer a template for how corporations can genuinely transform the communities they serve, not with slogans, but with sleeves rolled up and boots on the ground.

In the end, it’s not about NGN20 million or refurbished buildings. It’s about faith restored, dreams reignited, and the simple, radical idea that change begins with care.

Beyond Y’ello Care: MTN’s has had Broader Impact through its Foundation

Beyond Y’ello Care MTN Foundation has impacted the society through critical initiatives such as:

Healthcare Interventions: Through the Y’ello Doctor Mobile Medical Intervention Scheme, MTN provided free primary healthcare services to individuals across communities. Since its inception, the initiative has impacted thousands of Nigerians.

Vocational Training & Entrepreneurship Support: In collaboration with partners, MTN facilitated skill acquisition workshops that enabled over 500 Nigerians—including women and persons with disabilities—to launch small businesses. Over 65% of participants actively applied their new skills, and 50% successfully started businesses.

Scholarships & Digital Libraries: MTN Y’ello Care has established digital libraries and awarded scholarships to students, ensuring that quality education is accessible to as many young Nigerians as possible.

As Y’ello Care continues to grow, MTN remains dedicated to expanding its impact, especially in underserved areas. By investing in education, healthcare, and economic empowerment, the initiative is building a brighter future for Nigeria, one project at a time.


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Zoho Unveils AI-Powered Features in Zoho Creator for Faster App Development

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Zoho Corporation, a global technology company, today announces the launch of new services and features within Zoho Creator, the company’s low-code application development platform.

This milestone reflects Zoho’s commitment to investing in AI capabilities that offer real-time, practical, and secure advantages to business users.

Zoho Creator’s new AI assistant, CoCreator, facilitates faster, simpler, and more intelligent app building by using voice and written prompts, process flows and business specification documents. Powered by Zia, Zoho’s AI assistant, CoCreator drives shorter go-to-market timeframes and democratises app creation for users of varying skill levels—all without requiring add-ons to a customer’s existing subscription.

Zia has served as a bridge across Zoho’s entire product suite, including Creator, since its launch in 2015. As artificial intelligence becomes increasingly central to business operations, Zoho’s complete ownership of its tech stack and deep AI integration provides customers with a higher level of contextual AI across all company workflows compared to competitors.

This empowers users with a system that truly understands their data and anticipates its usage.

“Since we introduced Creator in 2006, our mission has been to make app development simpler and faster, without compromising on functionality,” said Kehinde Ogundare, Country Head, Zoho Nigeria. “AI now takes us to the next level, shortening the time from an idea to an app. Today’s announcement significantly raises the baseline on speed of quality app creation with deep capabilities, without adding costs.”

Among the newly-launched capabilities is the Idea-to-App Generation feature, allowing businesses to utilise ZohoAI or OpenAI to develop full-fledged applications including contextual integrations, automations, permission sets and insightful dashboards.

By using text or voice prompts, process flow diagrams, or systems documentations like software requirement specifications (SRS), Creator will provide domain-specific suggestions, ideas for relevant fields, and modules tailored to a customer’s business

Contextual component generation AI enhances existing applications by offering prompt-based form generation.

Zia also proactively suggests contextual fields within forms, a functionality missing from many low-code development platforms.

Developers of all skill levels can generate and optimise code blocks contextually within apps using Zia’s prompter and also annotate existing code blocks for future maintenance.

Further advancing business capabilities, users can rapidly transform unstructured data from various file types and databases into custom applications and remove inconsistencies using the AI-driven data cleansing and modelling feature.

Additionally, the newly-introduced AI Skills enables businesses to build apps with specialised skills that interpret natural language instructions in the business context and automate complex chains of actions intelligently. This feature is currently available in early access and will be widely available from June 2025.

Additional enhancements now available include document uploads that allow extraction of relevant information into an application that can then be queried easily; voice-based app generation from mobile devices; and deploying custom AI models for deploying capabilities like OCR, prediction, and object detection.

Zoho Artificial Intelligence Differentiation

Zoho remains steadfast in its commitment to AI innovation guided by principles of customer privacy and delivering true customer value.

Its generic AI models across contextual, assistive, and agentic categories are not trained on consumer data, nor do they retain customer information, ensuring responsible AI use.

Zoho focuses on practical AI tools that assist workers by right-sizing models and without inflating customer costs unnecessarily.


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