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Australian Businesses to Benefit from Innovative New Insurance Tool that Helps Manage the Cost of Product Recalls

Published Date 14.04.2014
Topic Press Releases

Australian Businesses to Benefit from Innovative New Insurance Tool that Helps Manage the Cost of Product Recalls

Contact: Lisa Rose: (02) 9240 1710; lisa.rose@aig.com

SYDNEY, Australia, 14 April 2014 - In response to growing concerns over the financial impact and frequency of product recalls for food and beverage businesses in Australia, AIG has today 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,” said 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 (CPI), extensive analysis of thousands of global recall incidents, and input from a leading food safety consultant, NSF International.

This free, confidential service is now available to food and beverages manufacturers in Australia and can be accessed at www.aig.com/au/novi

“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,” said Claire Richards, Crisis Management Manager, AIG Australia.“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.”

“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,” said Ms Richards.

AIG was the first company to provide CPI in 1986. Today, AIG remains the market leader, providing outstanding product recall underwriting expertise, a dedicated product recall claims team, and exclusive relationships with best-in-class crisis management consulting services which are standard in an AIG CPI insurance policy.

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Notes:

New Zealand and Australian product recall data is based on AIG analysis of data collected from data provided on Australian recall website: recalls.gov.au and does not include trade recalls or withdrawals.

 

AIG Australia Limited

Level 19, 2 Park Street

Sydney

www.aig.com.au

American International Group, Inc. (AIG) is a leading international insurance organisation serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the UnitedStates. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Insurance products are issued in Australia by AIG Australia Limited. Products or services may not be available in all jurisdictions, and coverage is subject to actual policy language.

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