Allianz Group’s specialist corporate insurer Allianz Global Corporate & Specialty® (AGCS) announced today that it is acquiring the renewal portfolio of Liberty Mutual Insurance’s s United States Product Recall and Special Contingency business, written through Liberty International Underwriters (LIU) U.S., with effect from Jan.30, 2018. AGCS began offering product recall insurance in North America in 2016 and is committed to further expanding its business in this segment, with a focus on larger corporate clients.
"As LIU recently announced an exit from the Crisis Management space, we are pleased to have the opportunity to offer our underwriting expertise to their former clientele in an effort to continuously support their coverage needs,” stated Christof Bentele, Head of Global Crisis Management, AGCS. “Companies that choose to renew policies with Allianz will benefit not only from an overall smooth transition, including engagement of the same crisis management partners, but also from Allianz’s unparalleled global network and talent both in underwriting and claims handling. For Allianz, this opportunity helps further position us as a leading product recall carrier and supports our strategy of expanding our customer base in the US."
Demand for product recall insurance has been increasing over the past decade and specialized product recall insurance is designed to help manage the considerable costs of a recall such as testing, consultant and/or advisor expenses, costs for advertising and implementing the recall as well as costs for repairing or replacing products. Beyond covering financial losses following a recall incident, AGCS also offers its clients crisis management assistance services globally on a 24/7 basis through its partner company red24, which also supported Liberty Mutual’s clients.
According to AGCS’s most recent report Product Recall: Managing The Impact of the New Risk Landscape, the average cost of a significant1 incident is in excess of $12 million, with the costs of largest events far exceeding this total. Record levels of recall incidents - both in size and cost - are a result of several factors, including tougher regulation and harsher penalties, the rise of large multi-national corporations and complex global supply chains, growing consumer awareness, economic pressures in R&D and production as well as the growth of social media.
Launched in 2016, the AGCS Crisis Management division in North America assists larger companies in preventing, preparing for and recovering from crisis incidents; it resides within AGCS’s global Liability line of business and provides insurance and service solutions pertaining to
- product recall and contamination
- terrorism and political violence
- hostile environments.