Released on: November 29, 2007, 2:21 am

Press Release Author: Alexandra Lewis

Industry:

Press Release Summary: Despite recent product recalls, brokers and insurers are
rising to the challenge of insuring the Chinese manufacturing industry for recalls.
However, leading insurance broker and risk management consultant Aon is warning that
companies need to boost their commitment to quality control to secure coverage.

Press Release Body: Despite recent product recalls, brokers and insurers are rising
to the challenge of insuring the Chinese manufacturing industry for recalls.
However, leading insurance broker and risk management consultant Aon is warning that
companies need to boost their commitment to quality control to secure coverage.

Chinese manufacturers are beginning to realise that to trade on a worldwide basis
many customers will make it a contractual requirement for their suppliers buy
product recall protection. But this cover will only be available after comprehensive
assessment of the individual risk by insurers.

Mark Quinn, associate director at Aon, commented on the reaction of the insurance
market: "Undoubtedly there is interest from the insurance market to offer product
recall solutions to manufacturers in expanding economies and there are markets that
see the development of recall insurance in China as an exciting opportunity, if
handled correctly."

The issue for insurers and brokers alike is developing recall insurance in a Chinese
market that is relatively unsophisticated and only just coming to terms with the
concept of product liability, let alone product recall - a niche area often written
as a standalone product or as part of a wider liability package. The industry needs
to promote product recall in China at grass roots levels, explaining the different
recall policies available and the requirements of the insurance market in order to
secure cover.

In particular, insurers will demand evidence of testing and controls throughout the
supply chain. This appears to have been lacking in some cases and contributed to the
high level of recalls emanating from the region. Bad track records will lead to high
premiums or refusal to quote at all.

But effective quality control does not stop with the manufacturers. Mark advises
companies across the supply chain should be conducting due diligence on suppliers'
quality control processes: "Businesses trading with China need to consider the knock
on effect to their business. Recent EU legislation means that companies are
obligated to inform authorities in the event of a recall and as such should also
have robust checks in place to test products before being released to the public."

Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic car
insurance, high value home insurance, entertainment and media liability insurance
and builder\'s
insurance.


Web Site:
http://www.commercialservices.aon.co.uk/commercialservices/microsites/construction/


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