Food & BeverageRonan Kavanagh, Aviva

Aviva: Internal

Aviva

Complete Protection For

Irish Food & BeverageBusinesses

September 2018

Food & Beverage Proposition

Cover and Considerations

.

Aviva: Internal

Page 1

Objectives & Agenda

Aviva have a strong appetite to write Food & Beverages risks.You will leave with a clear understanding of Aviva’s appetite and know how to get

the best quote from us.

Agenda:

➢ Overview

➢ Aviva Appetite

➢ Employers Liability

➢ Public & Products Liability

➢ Product Recall

➢ Property Covers

Aviva: Internal

Page 2

Sector Overview

▪ In depth review of current Aviva held business in F&B sector

▪ Carried out extensive research with brokers and

representatives of the F&B Industry

▪ Analysis showed profitable sector in clearly identified

segments particularly in SME rather than large F&B risks

▪ Market very evenly spread with no one Insurer dominant

▪ Aviva currently hold market share of 12%

Aviva: Internal

Page 3

Objectives & Agenda

The Proposition – a reminder

▪ 4 Offers for the F&B Industry.

▪ Composite Offering for Life & General

▪ Clear Risk Appetite for segments in F&B Industry

▪ Dedicated expert underwriters in Dublin & Cork

▪ Wrote directly to 4000 food business asking them to think of Aviva and contact their broker

Aviva Complete – Complete protection for your

business, family & financial future

Aviva: Internal

Page 4

Food & Beverage – Size of the Prize

1051

497

362 338307

231198 186 175

120 98

0

200

400

600

800

1000

1200

Approx 3,564 Food & Drink Companies in Ireland50% Have Websites – 50% Do Not

655 Large Companies – 18%

2909 SMEs – 82%

80% Food, 10% Drink & 10% Catering

PCF = Prepared Consumer Foods –Confectionery, Biscuits, Ready Meals, Sauces etc

Aviva: Internal

Page 5

Food & Beverage – Claims 2001-2016

19%

12%10%

9%8%

5%4% 4% 3% 3%

0%2%4%6%8%

10%12%14%16%18%20%

67% of Claims Relate to Employer Liability

Top 10 Claim Types Account for 77% of All Claims

Aviva: Internal

Page 6

Food & Beverage - AppetiteSegments of great interest Selected customers/products only

Segment Large SME

Drinks Alcoholic 25 150

Drinks Non Alcoholic 40 158

PCF (Approved CIPs no Heat Process Only)

931

Meat 120 242

Catering 40 298

Fruit/Veg 71 115

Seafood 435

Dairy 171

Ingredients 80

Poultry/Eggs 62

Total 296 2642

Segment Large

SME

PCF 121

Bakery 40 267

Seafood 62

Dairy 60

Ingredients 40

Poultry/Eggs 36

Total 359 267

Aviva: Internal

Page 7

4 of the Offers for the Irish Food & Beverage Industry

Aviva: Internal

Page 8

Food & Beverage – The Composite Offering

Aviva: Internal

Page 9

Additional Cover - Product Recall

Cover = Product recall withdrawal expenses

We cover the Insured’s direct recall costs:▪ Communications▪ Transport▪ Storage▪ Disposal▪ Staff▪ Expenses

Cover Availability: (Limit €100,000 subject to satisfactory questionnaire)

*Excess is 10% or €5k which ever is greater

Aviva: Internal

Page 10

Employers Liability

Death, bodily injury, shock, illness or disease caused during

the Period of Insurance, to any person under a contract of

service or apprenticeship with the Insured, if such death,

bodily injury, shock, illness or disease arises out of and in the

course of such person’s employment by the Insured.

Aviva: Internal

Page 11

Employers Liability

Cover

▪ Limit of Indemnity €13,000,000

▪ Wide definition of ‘employee’

▪ Contractual Liability cover

▪ Court Attendance costs

▪ Unsatisfied Court Judgements

* Higher limits available

Appetite

▪ Employ 1 to 1,000

▪ Based in ROI (& UK

subsidiaries)

▪ Good H&S standards

▪ Good Claims Experience

Aviva: Internal

Page 12

Public & Products Liability

Death, bodily injury, shock, illness or disease of any person except that arising our

of and in the course of such person’s employment by the insured under a contract

of service or apprenticeship

Loss of or physical damage to physical Property not belonging to the Insured or in

the charge or under the control of the Insured or any servant of the Insured.

Loss arising from obstruction trespass nuisance or interference with any easement

of air light water or way

Aviva: Internal

Page 13

Public & Products Liability

Cover

▪ Limit of Indemnity €6,500,000*

▪ PL Contractual Liability cover

▪ Rented Premises cover

▪ Unsatisfied Court Judgements

* Higher limits available

Appetite

▪ Turnover €5k to €50m

▪ Retailers, Wholesalers &

Manufacturers

▪ Good QC procedures

▪ Good Claims Experience

▪ Exports to North America

Aviva: Internal

Page 14

Understanding Food Risks

When underwriting risks in the Food and Drink sector we look to understand two primary elements:

1. The products that are made

2. The processes involved in the manufacturing of the product

3. The construction of the Property and understanding of CIP’s

4. Investment in Health & Safety is vital in this industry

Aviva: Internal

Page 15

Product – Key Categories

Meat, Poultry, Fish Cooking with Dry Heat

Deep Fat Frying Drinks

Aviva: Internal

Page 16

Product – Process & Hazards

Process:

▪ Receipt of meat/poultry/fish in bulk

▪ Cleaning, jointing, deboning, filleting

▪ Using mechanical or hand held tools

▪ Level of automation▪ Mixing in required

proportions▪ Cooking – dry heat, frying▪ Refrigeration / Freezing▪ Carbonation, bottling▪ Packaging, storing,

despatching

Hazards:

▪ Electrical infrastructure and equipment – ‘wet’ process areas

▪ Ammonia ▪ Construction – use of CIPs ▪ Failure of temperature

control systems▪ Build up of combustible

deposits ▪ Gas explosion▪ Flammable vapours that▪ Poor cleaning regimes

Aviva: Internal

Page 17

Other ConsiderationsWhilst, common to all risks in this sector, the following are also important;

Arson Hot Works Smoking Fork Lift Trucks

Lighting Vibration Packaging

Materials

Waste

Management

Aviva: Internal

Page 18

CIPs – Where & Why?

Advantages

▪ Factory produced under controlled conditions

▪ Ease/speed of initial build

▪ Performance and durability

▪ Cost

▪ Hygiene & thermal performance

Disadvantages

▪ Fire spread

▪ Heat release

▪ Fire brigade attitude

▪ Personal injury

▪ Claims costs

Usage/Locations

▪ External wall cladding Cold store constructions▪ Acoustic barriers Sterile risks▪ Roof cladding Internal enclosures and internal wall and ▪ Compartment walls Ceiling linings

Aviva: Internal

Page 19

Understanding the Exposure - Checklist

Understand the risk and exposure presented:

▪ Activities and Processes

▪ Concentrations of values, EML

▪ Construction incl. panel type and fitting, location and percentage of risk

▪ Active fire protection (e.g. sprinklers, AFAs, suppression) / Passive fire protection (fire walls, doors/other openings, fire stopping)

▪ Site fire safety management, both internal and external:

➢ Housekeeping / Maintenance programmes including panel management and dealing with defects

➢ Staff training

➢ Security

➢ Permit to work/Hot work controls – including before any layout alterations

➢ Electrical testing

➢ Arson prevention

➢ Panel Management programme

➢ Risk management needs to recognise that work on/around panelled areas may not be solely by contractors but also by insured’s own employees

Aviva: Internal

Page 20

Success to date +€3M achieved to date

Over €3 Million in New Food & Beverage BusinessWritten Since launch

Micro Breweries Meat

Dairy

Fruit & Veg

Chocolate / Cheese

Manufacturers Ingredients

25Aviva: Internal

Appendices

26Aviva: Internal

Property- Other Hazards in Food & Drink Industry

Feature/Hazard Comment

Dairy – pasteurisation – heating of milk • Generally low risk as temperature reached 72 degrees

Shrink wrapping involves heat sealing of wrapping,

bags – various types of heat sealing seen

• Medium to high risk at can operate at 100 – 200 degrees C

• Repetitive actions, trapped/stuck bags etc.

Conveyor systems

Feeding products into fryers/ovens or between units –

if conveyor stops product can be exposed to heat for

much longer than planned &/or carry burning materials

across site

• Combustible elements e.g. belts, transfer flames, burning material

• Build up of dust/residue on conveyor (or below in hard to clean areas)

• Alignment & slippage – mechanical peril

Electricals – in machinery and fixed installation.

Overheating of circuitry is major hazard. Also HID

Lighting, FLT charging, Overhead heaters

• High demand on machinery & capacity of installation

• Cables penetrating CIPs – hot copper wires

• FLT Battery charging (ideally 60 minutes fire resisting enclosure if inside)

External Storage – arson/spreading fire risk • Wood & plastic pallets/containers

• Skips/recycling containers with packaging materials – 10M from building

• Housekeeping essential, consider Security devices, CCTV, Guarding

Flammables – oils, liquids, cooking mediums, gases,

solvent extraction in oils manufacture. High fire load,

often readily ignited.

• Proximity to ignition sources

• Earthing & bonding

• Maintenance/storage/segregation/ventilation/ATEX/DSEAR

• Detection & Suppression systems

• External storage desireable

Ammonia

Widely used as a refrigerant, flammable in air &

explosion risk

• Proximity to ignition sources

• Maintenance/storage/segregation/ventilation/ATEX/DSEAR

• Detection & Suppression systems

Dust - any finely ground solids at certain

concentrations can explode on ignition form a fixed

flame to a static charge

• explosive dusts e.g. flour, custard powder, instant coffee, sugar, dried mile, potato

powder, soup powder, tea

• fine dust in contact with hot surfaces or ignition sources can cause fire – example of

tea & tea bags in extraction system

27Aviva: Internal

Core materials - reaction to fire and fire resistance capabilities

Expanded polystyrene:

• Readily combustible

• Will shrink and melt away from a small heat source

• Supports combustion and burns with severe flaming

• Rapid emission of heavy black toxic smoke and flammable gases

• Early panel delamination

• Flaming droplets not uncommon

Polyurethane Foam;

• One of the most commonly encountered core materials.

• Some polyurethanes have an element of heat and fire retardancy and will prevent ignition from low heat sources (but will not prevent ignition from larger heat sources).

• Depending upon formulation can have a rapid rate of heat release when directly exposed to sizeable flame.

• When encapsulated in a sandwich panel with good joint design, the risk of serious fire spread is reduced (but not eliminated).

28Aviva: Internal

Core materials - reaction to fire and fire resistance capabilities

Polyisocyanurate Foam:

• Resistant to all but large ignition sources, but does greatly depend on the formulation of the product and quality control (hence the importance of LPCB Approvals).

• When foam core directly exposed to a flame will initially burn rapidly until formation of a char layer which tends to prevent further combustion (NB joint design and construction detail important as char layer can be fragile)

• LPCB approved polyisocyanurate panels will perform significantly better than standard non-approved PIR panels. (LPS 1181 and LPS 1208 are deemed non-combustible for rating purposes).

Modified Phenolic Foam:

• Some of the more recent phenolics have very good fire resisting qualities.

• Not easily ignited.

• Has the closed cells filled with inorganic fillers e.g. gypsum

• Some manufacturers panels have been tested by LPCB under LPS1208, and are now approved (performed significantly better than some of the LPCB approved PIR’s)

Rock Fibre / Mineral Wool:

• Non-combustible.

• Made from glassfibre, slagwool, rockfibre, rockwool etc)

• One of the best materials in respect to fire protection available.

• The higher the density of the panel the higher the fire insulation.

Aviva: Internal

Loss Prevention Certification Board

Loss Prevention Standard 1181

Tests the fire performance of CIPs in the external structure I.e. walls and roof cladding

Loss Prevention Standard 1208

The performance standard that covers fire resistance, specifically in relation to compartmentation and internal.

Panels conforming to the above should not significantly contribute to fire growth or fire spread

30Aviva: Internal

Property Insurance – CIPs Summary

CIPs Summary:

• We accept that ‘panels’ do not cause fires

• Panels are only part of the equation

• External cladding may present a better risk profile

• Selection paramount – we want the best!

• Preference has to be for non-combustible materials or LPCB Approved products but:

• Composite panels are not considered in isolation of other risk features

• Consider the type and application - external v internal, polystyrene v others, proportion of CIPs in total building construction, trade process

• Not all composite panels are a significant hazard i.e. no significant contribution to fire growth or spread (Design Guide) if LPCB approved

31Aviva: Internal

Meat Poultry and Fish Processing – No Cooking

Processes are likely to include:

▪ Receipt of meat/poultry/fish in bulk; ▪ Cleaning, jointing, deboning/filleting using mechanical or hand held tools; ▪ may be extensively automated▪ packaging, storage and despatch ▪ Processes may also include receipt and slaughter of animals.

Main hazards are likely to be:

▪ Electrical infrastructure and equipment – especially in ‘wet’ process areas,▪ Ammonia ▪ Construction – use of CIPs is often seen in these trades

32Aviva: Internal

Meat Poultry and Fish Processing – No Cooking (cont.)

With no cooking/smoking/curing there should be no inception risk from this source.

Whilst, common to all risks in this sector, the following are also important

Arson Hot Works Smoking Fork Lift Trucks

Lighting Vibration Packaging

Materials

Waste

Management

33Aviva: Internal

Wet mixing – cooking with dry heat e.g. ovens

Processes can include:

▪ Receipt of ingredients e.g. into vats/silos

▪ Mixing in required proportions▪ Cooking▪ Packaging ▪ Refrigeration/Freezing▪ Despatch

Main hazards are likely to be;

▪ Process heat – ovens▪ Overheating/burning of food due to:▪ the failure of the temperature control systems, ▪ in the case of travelling ovens a change in the speed of

the conveyor.▪ Some ovens use internal gas burners to brown products

but may ignite the product▪ combustible deposits that build up in the oven and the

fume extraction ductwork▪ Build up of crumb/cooking oils▪ Oil spraying onto food materials entering oven▪ Gas explosion▪ flammable vapours that are released▪ leakage of oils and other flammables in the oven ▪ auto heating with no attendance, cleaning regimes,

housekeeping▪ Electrical equipment – especially in ‘wet’ process areas▪ Ammonia ▪ Construction – use of CIPs is often seen in these trades

34Aviva: Internal

Cooking Heating

Cooking/heating – Considerations;

• Where is cooking undertaken in relation to fire-load; e.g. packing/storage

• What type of cooking processes are used

• What are walls/ceilings/roofs comprised of within at least 10m of such areas?

• How do any services/ducting pass through the walls/ceilings/roofs?

• Oils, fats used in cooking processes?

• Naked flames e.g. Grilles?

• Suppression, or capability of being suppressed? Cost/business disruption? Premier offering? Partial

discounting of risk?

• Auto cut out devices/thermostats on cooking devices

• Manual main fuel shut off valve – gas or electric

• Degree of supervision

• Cleaning & maintenance regimes

Solutions;

✓ Ideally housed in 1 hour compartment

✓Automatic temperature controls

✓Regular inspections and cleaning

✓Fire suppression

35Aviva: Internal

Frying/Deep Fat Frying

Processes can include:

• Receipt of ingredients

• Preparation of ingredients e.g. washing, peeling, mixing together

• Frying

• Cooling

• Refrigeration

• Packaging and despatch

Main hazards are likely to be:

• Process heating. Frying is inherently hazardous and fires are frequently seen – both in the fryer itself & surrounds as well as in the ducting/flues; requires constant supervision

• Spontaneous combustion of crumb

• Electrical equipment – especially in ‘wet’ process areas

• Ammonia

• Construction

Hazards common to all food risks

36Aviva: Internal

Frying

Frying – key issues:-

• Fryers typically operate at 200 degrees C & contain more than 300 litres of oil

• Flammable vapours given off at 230 degrees C & auto ignition can occur at 310-360 degrees C

• Common hazards:- ignition of the cooking oil in pans/hot surfaces

➢ Spontaneous combustion of crumb

➢ Sediment deposits and ductwork fires from a build up of fats and greases

➢ Poor supervision of cooking operations a major problem – several large losses

• Duct fires common & often difficult to manage

• Ducts & other services penetrating panels and other combustible materials; requiring fire stopping, sleeves & collars

• Oil level shut off devices, high temperature controls/cut out & electric/gas shot off facility all required

• Sediment/crumb, often a significant problem as can spontaneously combust - regular cleaning and emptying of catch boxes (metal) required

• Oils can pose risk of a flowing fire. How and where are they stored? What are their properties (e.g. flashpoint)

• Conclusion – Businesses with any frying involved are outside our appetite (not including frying in staff canteens however usual requirements apply such as cleaning of ductwork extraction system)

37Aviva: Internal

Soft Drink manufacturing

Processes are likely to include;

• Receipt of ingredients

• Pulping/juice extraction

• Filtering

• Addition of any required ingredients

• Carbonation – if required

• Bottling and despatch

Main hazards are likely to be;

• Electrical equipment – especially in ‘wet’ process areas

• Syrups, flavourings and concentrates can be flammable e.g. Sprite

Whilst, common to all risks in this sector, the following are also important

• Arson

• Hot Works

• Smoking

• Fork Lift trucks

• Stocks of packaging materials

• Waste management

• Construction

38Aviva: Internal

Composite Insulation Panels (CIPs)

Advantages:• Factory produced under controlled conditions.

• Ease/speed of initial build

• Performance and durability not dependent on site labour quality.

• Cost.

• Hygiene & thermal performance.

• Alteration of internal layout

Disadvantages:• Fire spread.

• Heat release.

• Fire brigade attitude.

• Environmental considerations.

• Personal injury.

• CLAIMS COSTS…..

• Difficulty in identifying core

• Method and quality of installation varies

Usage/Locations:

External wall cladding Cold store constructions.Acoustic barriers. Sterile risksRoof cladding Internal enclosures and internal wall and Compartment walls. ceiling linings

Aviva: Internal

Trade Processes – Property Underwriting

Food -

No Cooking

Meat, Poultry and Fish processing - no cooking.

Corn, Rice, Wheat etc. processing

Hay/Straw etc

Fruit and vegetable processing - no cooking

Banana Ripener

Dairy/Dairy Products

Wet mixing - no cooking

Dry mixing – no cooking

Food -

Cooking

Wet mixing – cooking – wet heat e.g. boiling/steaming only (jams, fruit fillings

Wet mixing – cooking – dry heat e.g. ovens

Dry mixing – cooking - dry heat e.g. ovens -

Frying/Deep Fat Frying

Smoking/Curing

Food – Heating/dryingMalting, other drying or heating processes for example, powdered milk made by

evaporating milk and drying by heating.

Drinks

Soft drink mfr

Drinks: Alcoholic – spirits ex whisky

Drinks: Alcoholic – Whisky

Drink mfr: Alcoholic ex spirits. Inc vinegar brewery

Aviva: Internal

Other Considerations…

Unattended operations

• Delay between faults & human intervention.

• Ovens in bakeries pre heated prior to cooking quite common

• Frying ranges – left to heat up or interruptions during oil changes/cooking periods without supervision

• Temperature monitoring/cut off devices essential but not always the total solution

Staff Issues:-

• At times of peak production/output standards can suffer

• Training and inspections of work can be time consuming to maintain

• Staff/labour in short supply or high turnover can make it difficult to maintain standards

• Use of agency staff, staff on zero hour contracts or with language limitations

Waste removal

• strict procedures

• non combustible receptacles

• frequency

• outside storage

Storage•

• Combustible using plastic (HDPE) pallets or ones made from card/paper/glue!

Strict cleaning and

housekeeping regimes

and their enforcement

are critical

Thanks for listening

Questions welcome

?