Insuring Food Safety: What's on the menu?
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Food recalls are on the rise, with a US survey revealing that companies with a recalled product reported costs of USD 10 million and up, some more than USD 100 million. The 'Insuring food safety' event at Swiss Re's Centre for Global Dialogue brought experts together to discuss how to mitigate these risks.
Read a text version of the video here:
We believe that food safety and food security are a growing problem and the main driver for that is population growth in the world. The United Nations expects world population to grow by 2050 to more than nine billion people from currently about seven billion. That increase of 30 percent in the world population will be accompanied with an increase in food demand of more than 70 percent, driven by organization and increased wealth levels. That means this food needs to be produced, supply chains will become more complex and intertwined and that will increase the risk around food security.
The industry is facing different issues around food safety and just to mention two, pathogenic bacteria are still issue number one and today we also see the emerging threat of antibiotic resistant bacteria and we have the huge threat of micro-toxins, which is becoming worse due to climate change.
The insurance industry, working through for example, product recall insurance or product liability insurance really contributes to the industry via risk management and insurance as a joint solution. Working with companies to identify issues and really trying to correct them, which is in the interests of the insurance industry as well as the company themselves, of course.
Anita Scholte op Reimer:
One of the challenges we are seeing at the moment is auditor competency. How do we make sure, how do we guarantee that the auditor who is checking the plant where the plant is produced, that this is in the hands of the auditor to be sure that what he see at that day or in those two to three days, is applicable to the whole year. That's a big challenge we see at the moment.
When you discuss things like this, for the insurances, for company who make the insurance, they are frightened because it's about what are the consequences of course, financially and when you have sort of media bashing on the ground, it can be the food company which is exposed. So the risk can be very big. For the food industry, discussing with them, it's about being transparent about the risk.
An event like this, organized by Swiss Re, is important because at the end nobody will be able to solve this alone. We need all actors to play together to build sustainable value chains and at the end guarantee safe food for the consumers."