Telecom
Product Recall Risks Growing In Size & Number, Technology Drives New Triggers- Allianz
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.
WhatsApp’s introduction of usernames ostensibly to increase privacy for users so they don’t have to swap phone numbers – could backfire if hackers turn usernames into a new avenue for privacy attacks.
This is according to two experts, who both note that usernames will be fair game for hackers, while also being accessible to governmental agencies and advertisers, upending WhatsApp’s key to success: conversations and calls are end-to-end encrypted by default.
WhatsApp has always stated that its encryption “ensures that only you and the person you are communicating with can read or listen to them, preventing anyone in between – including WhatsApp, Meta, or cyber criminals – from accessing your data”.
Over the weekend, the messaging app said it was introducing usernames so that users provide these as contact details instead of phone numbers, which it calls “a major privacy feature”. It is encouraging users to “reserve your username now, before the feature launches later this year”.
“Sometimes you just want to chat without handing over your digits,” WhatsApp says, noting that a phone number is personal and tied to many parts of a user’s life.
The Facebook and Instagram owner says: “This is also true for group conversations. You want to join the parent chat for the soccer team but you’re not ready to give your phone number to people you’ve never met.”
Trading View, a financial markets analysis platform, says: “The approach could help Meta position the update as a controlled privacy tool rather than a discovery feature, while bringing WhatsApp closer to rival messaging apps such as Signal, which already allows username-based conversations.”
It adds there will be no directory or username suggestions, so users will need to know a person’s exact username to contact them for the first time. An optional username key can be enabled to further restrict who is able to message them.
Meta is also introducing safeguards as the feature rolls out to reduce the risk of impersonation and scams, Trading View explains. Existing Facebook and Instagram usernames will be reserved for their current owners during the reservation period, and certain usernames associated with public figures, celebrities and government entities will remain permanently protected.
ICT veteran commentator Adrian Schofield, however, questions whether the feature will deliver the privacy benefits users expect. “Short usernames will not be difficult to find and are likely to become a new ‘game’ for those who enjoy breaking privacy protection,” he says.
The big issue is privacy, says T4i director Mark Walker, formerly with research company IDC. WhatsApp built its reputation on shielding users’ identities regardless of which groups they joined, or who they associated with. That promise, he argues, is now being quietly redefined.
“‘Privacy’ now means protection from impersonation by other users, not privacy from the platform’s own surveillance, data linkage, or other entities. It’s a security feature rebranded for a privacy-sensitive audience, directly trading away individual privacy for a form of collective safety,” he says.
Walker adds: “Users value WhatsApp for its privacy; none of the groups you join or people you associate with are shared externally with advertisers. That is what is being eroded.”
This move, Walker says, is “a sophisticated monetisation play,” using privacy, security and regulation to motivate users to verify their identities – for a fee – while positioning Meta as what he calls “the all-seeing trusted eye” attractive to both advertisers and government agencies.
In its announcement, Meta says users can reserve a username to use later this year when the feature launches. “A lot of names overlap, which is why we’re opening reservations early so everyone has the opportunity to select the username that matters to them.”
Content creators, small businesses and organisations that want to maintain a consistent online presence will be able to claim their existing Instagram or Facebook username on WhatsApp through reserved username options, says Meta.
“For most people, choosing a WhatsApp username should be something unique that only people you want to contact you will know. If you need help picking one, we have a username generator to make one work just for you,” Meta says.
WhatsApp had reached three billion users globally as of Meta’s 2025 first quarter results, or 36% of the world’s population. “WhatsApp now has more than three billion monthly actives, with more than 100 million people in the US and growing quickly there,” CEO Mark Zuckerberg said at the time.
During Meta’s latest results, Zuckerberg said: “WhatsApp continues to see strong momentum too, including in the US.”
Schofield questioned whether desirable short usernames could become targets for impersonation. “Look at the older Gmail accounts! Time to take a good look at alternative platforms? This feature will be rolled out in tranches,” Meta says.
Telecom
Airtel Nigeria CEO Urges Adoption of Intelligent Technology Platforms to Accelerate National Growth
Dinesh Balsingh, Airtel Nigeria’s Chief Executive Officer, has called on business leaders to accelerate Nigeria’s digital future by embracing intelligent technology platforms that drive innovation, productivity, and sustainable economic growth.
Speaking at the Lagos Business School (LBS) Breakfast Club on the theme, “From Telco to Techno,” Balsingh said the telecommunications industry is evolving beyond connectivity to become the foundation for enterprise transformation and the country’s digital economy.
Balsingh explained that while previous generations of mobile technology connected people through voice, internet access, and mobile broadband, the future lies in intelligent ecosystems powered by artificial intelligence (AI), the Internet of Things (IoT), satellite connectivity, and integrated enterprise solutions.
“The role of telecommunications has fundamentally changed. Businesses are no longer asking only for connectivity; they want solutions that improve productivity, strengthen security, and accelerate digital transformation. That is the journey Airtel is leading. We are evolving from a telecommunications company into a technology partner that helps organisations unlock growth and create long-term value,” he said.
Noting that value is no longer measured by the volume of data consumed but by the business outcomes technology delivers, he highlighted a key shift in telecommunications to AI-powered customer protections, industry-specific digital solutions, IoT platforms, and hybrid satellite-terrestrial networks that extend reliable connectivity to underserved communities and remote business locations.
“Technology should do more than connect people. It should protect them, simplify operations, and help businesses make better decisions. Investments are now focused on building smarter, more resilient digital infrastructure that supports organisations across every sector of the economy.”
He added that sectors including retail, education, healthcare, government, manufacturing, and oil and gas increasingly require integrated digital solutions that combine connectivity with cloud services, intelligent networking, surveillance, automation, and data analytics.
Balsingh also urged business leaders to rethink their digital priorities, noting that future competitiveness will depend on how connected, intelligent, secure, automated, and resilient their organisations become.
“The organisations that will lead the next decade are those that invest today in intelligent digital infrastructure. Our customers are no longer buying connectivity alone. They are investing in productivity, intelligence, and digital transformation.”
The session, which also featured the IMF Resident Representative for Nigeria, Christian Ebeke, formed part of the Lagos Business School Breakfast Club, a platform that brings together business executives and industry leaders to examine emerging trends shaping the future of enterprise and economic development.
Airtel Nigeria’s participation reinforced its commitment to supporting Nigeria’s digital transformation by enabling businesses with innovative technologies that improve efficiency, strengthen resilience, and unlock new opportunities for growth across the country’s rapidly evolving digital economy.
Nigerian Communications Commission (NCC) has called for accelerated deployment of Fibre-to-the-Home (FTTH) infrastructure, saying robust broadband connectivity is critical to achieving Nigeria’s ambition of building a one trillion-dollar economy.
Dr Aminu Maida, Executive Vice Chairman of the NCC, made the call while delivering a keynote address at the Association of Telecommunications Companies of Nigeria (ATCON) High-Level Industry Forum on FTTH in Lagos.
Maida said that although demand for high-speed internet continues to rise due to the growth of artificial intelligence, cloud computing, streaming services and digital businesses, fixed fibre broadband remains significantly underdeveloped in Nigeria.
According to him, the country currently has about 265,000 active FTTH subscriptions, a penetration level below the African average of 2.5 per cent and far behind the 47 per cent average recorded in more mature broadband markets.
“This low base should not discourage us. It should focus us.
“It shows the scale of the opportunity before Nigeria and reinforces the need to create the right conditions for fibre infrastructure to expand more rapidly, more sustainably and more widely across the country,” he said.
Maida said fibre infrastructure provides the speed, resilience and scalability required to support increasingly data-intensive applications and future technology upgrades.
He added that improved broadband infrastructure would enhance business competitiveness, expand digital services, improve productivity and attract greater investment into the country’s digital economy.
The NCC boss disclosed that the commission is conducting a Wholesale Fixed Broadband Market Assessment to evaluate competition in the wholesale broadband segment and identify measures to encourage infrastructure investment.
He said the assessment would also promote infrastructure sharing, strengthen open access models and improve affordability for consumers.
Maida renewed the commission’s call on state governments to remove barriers to fibre deployment, identifying Right of Way (RoW) approvals as one of the major obstacles to broadband expansion.
He said excessive RoW charges, prolonged approval timelines and multiple permitting requirements continue to increase deployment costs and delay network rollout.
According to him, 13 states have completely waived Right of Way charges, while 16 others have adopted the National Economic Council’s recommended rate of N145 per linear metre.
He said the commission would continue engaging the remaining states to eliminate impediments to broadband investment.
The NCC also disclosed that it had launched an Ease of Doing Business Portal to provide investors and network operators with state-by-state information on Right of Way charges, approval procedures and regulatory requirements.
Maida urged governments, property developers and urban planners to incorporate telecommunications infrastructure into the design of new residential and commercial developments.
He also stressed the need to enforce technical and safety standards in fibre deployment projects, warning that poor installation practices and substandard materials could lead to service disruptions and increased maintenance costs.
“Our priority is not simply that fibre is deployed quickly, but that it is built to last and capable of supporting Nigeria’s digital ambitions for decades to come,” he said.
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