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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 Africa Foundation Launches Airtel Green Schools to Promote Sustainability Education in Nigeria

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Airtel Africa Foundation, through Airtel Nigeria, has launched the Airtel Green Schools initiative, a sustainability-focused programme designed to create environmental learning spaces in primary and secondary schools.

The spaces, which are branded Airtel Garden, have been introduced as part of Airtel Nigeria’s activities to commemorate the 2026 World Environment Day, themed “Climate Action”.

According to Airtel Nigeria’s schedule, the company’s 10 adopted schools, located in nine states across country’s six geopolitical zones, have been onboarded as Green Schools.

Each of the schools now features an Airtel Garden, with dedicated sections for edible crops, fruit trees and shade trees, enabling pupils to learn firsthand about food cultivation, biodiversity and the importance of increasing green cover to help mitigate the effects of climate change.

The gardens also incorporate composting stations where organic waste generated within the school environment can be converted into nutrient-rich compost. To boost circular economy practices, plastic recycling segments have also been built in to repurpose common wastes such as plastic bottles and tyres.

The beneficiary schools of the programme include St. George’s Nursery and Primary School, Ipaja, Lagos; Yahaya Primary School, Zaria; Iyeru-Okin Primary School, Iyeru-Okin, Kwara; St. John Primary School, Ijebu Igbo, Ogun State, and Community Primary School, Amumara, Imo State.

Others are Presbyterian Primary School, Ediba, Cross-River; Migrant Farmers Community Primary School, Umuahia, Abia State; Gwange III Primary School, Maiduguri, Borno State; Mayflower Secondary School, Ikenne, Ogun State; and Government Day Primary School, Gombe State.

Segun Ogusanya, Chairman of the Airtel Africa Foundation, highlighted the developmental focus of Airtel Garden. “We are excited to inaugurate Airtel Green Schools, which are designed to go beyond awareness and create real behavioural change within Nigeria’s school communities.

“Through the Restore, Reduce and Educate pillars, we are equipping young people with practical tools such as gardens, recycling awareness, and environmental learning resources.

2Our goal is to create a replicable Green School model that can be scaled and sustained over time, ensuring that environmental education becomes part of everyday learning for the children in our adopted schools,” he said.

A key feature of the launch programme is the signature “Read, Engage, Plant” experience, an immersive environmental learning model that combines storytelling, practical engagement and environmental action.

At the launch, Airtel staff from the Employee Volunteer Programme (EVP) led pupils of the adopted schools in the reading “Jojo and Jade, Heroes of Mother Earth” before joining in interactive environmental activities such as crop planting. The programme also featured a recitation of the climate action pledge and the inauguration of Airtel Garden Eco Club.

Speaking on the flag-off of Airtel Green Schools and Airtel Garden, the Chief Executive Officer of Airtel Nigeria, Dinesh Balsingh, said, “Climate action becomes meaningful when awareness is translated into action.

“Through the Airtel Garden, we are creating living classrooms where pupils can learn practical lessons about environmental stewardship, sustainable agriculture, waste management and the importance of protecting our planet. We believe that empowering young people with these experiences today will help shape a more environmentally responsible generation tomorrow.”

The Airtel Green Schools campaign is built on the telecom giant’s sustainability theme of Reuse, Educate, and Restore. Through tree planting and garden development, the programme seeks to establish green spaces within school communities while promoting waste reduction and responsible environmental practices via composting and plastic recycling.


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GSMA Launches Global Satellite Regulatory Playbook to Help Policymakers Build Future-Ready Connectivity Frameworks

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The GSMA has launched its new Satellite Regulatory Playbook, a practical guide designed to help policymakers develop clear, consistent and future-ready policy frameworks for the rapidly evolving satellite connectivity sector.

As Low Earth Orbit (LEO) satellite services expand globally and begin to complement terrestrial mobile and broadband networks, the Playbook provides governments with a structured framework to modernise satellite regulation in ways that support societal needs, protect consumers, and encourage investment in the next generation of communications networks.

Developed in collaboration with Access Partnership, the Playbook focuses on emerging satellite broadband and direct-to-device (D2D) services delivered directly to end users without mobile operator partnerships, where existing regulatory frameworks often leave gaps.

Where mobile operators are involved, existing regulations typically provide sufficient safeguards. The playbook offers practical guidance that policymakers can adapt to their national circumstances. It is designed to support technology-neutral regulation while promoting greater consistency in regulatory outcomes across markets.

The GSMA emphasises that no single connectivity technology can meet all of society’s long-term communications needs. Instead, resilient and inclusive digital societies require multiple forms of connectivity working together, including mobile, fixed and satellite networks. Regulatory frameworks therefore need to evolve to address all connectivity services consistently, ensuring users receive comparable protections and benefits regardless of how services are delivered.

Michaela Angonius, Head of Policy & Regulation at the GSMA, said: “As satellite connectivity becomes an increasingly important part of the global communications landscape, policymakers have an opportunity to create regulatory frameworks that are fit for the future.

“The Satellite Regulatory Playbook gives policymakers practical guidance to create frameworks that protect people, ensure law enforcement can always do their job, attract investment into the whole communications sector and keep pace with innovation.”

“Connectivity is not a choice between terrestrial and satellite networks. Meeting the needs of citizens, businesses and governments requires a diverse and complementary connectivity ecosystem. Regulation should therefore be technology-neutral and focused on delivering consistent outcomes for consumers and society, regardless of how services are provided.”

The Playbook identifies eight key regulatory pillars that policymakers should consider when developing or modernising frameworks for satellite services:

  • Local establishment rules
  • National security
  • Consumer protection and operational measures
  • Infrastructure and facility requirements
  • End-user terminal deployment
  • Fiscal considerations
  • Emergency services and public safety
  • Enforcement

The guidance is underpinned by the GSMA’s principles of transparency, regulatory parity, harmonisation, collaboration and balanced innovation. Together, these principles aim to support regulatory certainty, encourage investment, strengthen consumer trust and promote fair competition across the broader connectivity ecosystem.

Recognising that regulatory frameworks vary significantly between countries, the Playbook does not prescribe a one-size-fits-all model. Instead, it provides a flexible framework that regulators can tailor to national priorities while helping to reduce fragmentation and promote greater international alignment.

As satellite services continue to evolve and expand, the GSMA believes that forward-looking and harmonised regulatory approaches will be essential to unlocking the full benefits of next-generation connectivity for consumers, businesses and societies worldwide.


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NITDA Unveils Bold Vision to Make Nigeria an AI Powerhouse

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National Information Technology Development Agency (NITDA) has reaffirmed its commitment to establishing Nigeria as a frontrunner in Africa’s artificial intelligence economy, emphasizing that the country’s digital future relies heavily on responsible AI adoption, digital sovereignty, and homegrown innovation.

NITDA Unveils Bold Vision to Make Nigeria an AI Powerhouse

Represetative of Kashifu Inuwa Abdullahi, the DG NITDA, Barrister Emmanuel Edet, Ag. Director, Regulation and Compliance Department, delivering a remark at the AI Summit Nigeria 2026.

Speaking at the AI Summit Nigeria 2026—hosted by Microsoft in Abuja—NITDA’s Director-General, Kashifu Inuwa CCIE, described AI as a transformative force capable of revolutionising every economic sector.

His insights were delivered by Barr. Emmanuel Edet, NITDA’s Acting Director of Regulation and Compliance, who highlighted that trust serves as the bedrock for any sustainable AI rollout. Without a firm commitment to accountability and transparency, he warned, widespread innovation simply cannot scale.

“Without public trust, AI adoption will be stalled,” Inuwa noted. “Without accountability, innovation will not scale sustainably, and without transparency, citizens will lose confidence in the systems designed to serve them.”

Themed “From Policy to Progress: Accelerating Responsible AI Adoption for Nigeria’s Digital Decade,” the summit was a collaborative effort between Microsoft, NITDA, and MTN.

The event brought together a diverse group of public and private sector stakeholders to map out actionable strategies for embedding AI into the fabric of Nigeria’s economy.

A central theme of Inuwa’s address was the critical need for Nigeria to achieve true digital sovereignty. He urged the nation to pivot from being mere consumers of global technology to becoming active creators of it.

“We must become creators of intelligence rooted in our realities and responsive to our aspirations,” Inuwa urged.

“We must build local talent, strengthen research ecosystems and create an enabling environment where Nigerian and African solutions can thrive.”

He added that Africa needs to play a defining role in shaping the global future of AI, rather than just adapting to technologies built elsewhere.

Microsoft’s Director of Government Affairs for West Africa, Nonye Ujam, also spoke at the event, praising Nigeria’s proactive steps in AI governance, particularly through the National AI Strategy and ongoing regulatory reforms.

However, she challenged attendees to move past the paperwork and focus on executing AI solutions that yield measurable benefits for everyday citizens, businesses, and government operations.

Ujam pointed out that truly effective AI adoption hinges on robust governance frameworks, solid infrastructure, and institutional capacity, all while anchoring new innovations to the core principles of fairness, security, transparency, and accountability.

The summit sparked vital conversations around regulatory clarity, digital sovereignty, and the delicate balance between fostering innovation, driving collaboration, and maintaining strategic control over Nigeria’s fast-evolving tech landscape.

The event drew active participation from key institutions, including the Nigeria Customs Service, the National Identity Management Commission, and Galaxy Backbone, all signaling a unified front for Nigeria’s digital future.


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