As International Business Activity Heats Up, So Do Supply Chain Fears, Chubb Survey Finds
Employers Also Remain Vulnerable to Travel-Related Injuries and Mobile Device Risks
WARREN, NJ, April 29, 2014 — As U.S. and Canadian businesses plan to expand their business overseas this year, supply chain failures, data breaches and
political instability are weighing heavily on the minds of their executives, according to a survey by the Chubb Group of Insurance
The 2014 Chubb Multinational Risk Survey identified the top overseas business threat as supply chain failure (19%). A data
breach/cyber event (15%) was ranked second, and government/regulatory investigation and political instability were tied for
third (13%). Natural catastrophe (12%) was ranked fourth out of the 10 events listed.
The survey also found that one in two (52%) businesses plans to increase its overseas activity in 2014. Survey respondents
expect to increase overseas travel (27%), introduce new products in foreign markets (27%) and increase employee headcount
“Companies, large and small, continue to seek out new business opportunities abroad, and they increasingly are being confronted
by political and economic turmoil, natural and manmade disasters, and regulatory hurdles,” said Kathleen Ellis, senior vice
president and worldwide manager for Chubb Multinational Solutions. “As they expand their international business operations,
companies need to take a more holistic or global approach to managing risk.”
Nearly half (45%) of the executives surveyed noted that overseas risks pose a greater threat to their company than domestic
ones, while one-third (33%) reported that overseas risks are an equal threat. In addition, nearly half (48%) of the companies
had experienced at least one loss related to conducting business overseas over the last three years.
Supply Chain Risk
Despite their concern regarding supply chain failure, only 56% of companies have a business continuity plan that addresses
overseas risks, and 22% of companies that do have a plan have never tested it.
Larger companies (74%) were much more likely to be prepared for overseas business interruptions than smaller companies (48%).
“The lack of business continuity plans and testing is disturbing,” said Ellis. “Companies are left exposed to significant
supply chain failures and associated business interruption costs that can undermine their financial results and stability.
It is equally important for companies to assess whether their overseas suppliers and vendors also have up-to-date, well-tested
business continuity plans.”
Forty percent of respondents require their overseas suppliers and vendors to have a business continuity plan.
Employee Travel Risk
Two out of three (69%) companies have employees who travel outside the United States and Canada on business, according to
the survey. Only 57% of the companies provide emergency medical care or evacuation assistance to those employees.
“Companies have a moral and legal obligation to take care of their employees when they travel on business,” said Ellis. “A
global emergency assistance provider could mean the difference between life and death when an employee becomes seriously ill
overseas or is caught in the middle of a military coup.”
Mobile Device and Social Media Risk
Employees traveling with mobile devices are increasing the potential for cyber-related data breaches. Nearly three in four
(72%) companies allow employees to use their own mobile devices, such as smartphones, tablets and laptops, for work. However,
companies with fewer than 500 employees (80%) are more likely to permit these devices, compared to 67% of companies with 5,000
or more employees.
“With many employees traveling outside the U.S. and Canada, more mobile devices, often with proprietary company information,
are at risk of being lost or stolen,” said Ellis. “The good news is that many, but not all, executives recognize the threat
and are taking steps to mitigate the risk.”
Eighty-two percent of companies require at least one security feature on mobile devices used for work, including password
protection (75%), encryption (53%) and the ability to remotely wipe clean the device (39%).
Survey respondents also were asked whether their companies have established global social media policies. Sixty-three percent
of the firms have social media policies that extend to overseas employees, and 23% of these firms have tailored the policies
for different locations. However, large companies (77%) were significantly more likely to have an overseas social media policy
than smaller companies (55%).
“It’s not surprising that larger companies appear to be better prepared to manage the risks that come with an increase in
overseas activities,” observed Ellis. “But smaller companies, which may be more financially vulnerable to such risks as data
breaches or supply chain failures, can turn to agents, brokers and insurers that have underwriting, loss control and claims
resources on the ground overseas to help them manage the risks of their international expansions.”
Chubb’s survey of 300 senior executives was conducted by JLA Strategic Research, an independent public opinion and market
Since 1882, members of the Chubb Group of Insurance Companies have provided property and casualty insurance products to customers
around the globe. These products are offered through a worldwide network of independent agents and brokers. The Chubb Group
of Insurance Companies is known for financial strength, underwriting and loss-control expertise, tailoring products for the
needs of high-net-worth individuals and commercial customers in niche markets and select industry segments, and outstanding
The Chubb Group of Insurance Companies is the marketing term used to describe several separately incorporated insurance companies
under the common ownership of The Chubb Corporation. The Chubb Corporation is listed on the New York Stock Exchange (NYSE:
CB) and, together with its subsidiaries, employs approximately 10,000 people throughout North America, Europe, Latin America,
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Group of Insurance Companies, visit www.chubb.com.