Chubb has released the results of its annual study of operational risks facing North America head-quartered multinational companies. The 2008 Multinational Risk Survey found that top threats have shifted from terrorism to economic issues.

Survey respondents reported that their companies will continue to seek additional revenue outside the United States and Canada in 2008. A majority of the respondents (71 percent) expect revenues from foreign operations, foreign sales and/or imports to increase, and three in four companies plan to expand their operations outside the United States and Canada this year. Companies will grow their foreign business by introducing new products (71 percent), increasing employee headcount (62 percent), acquiring another company (47 percent), and increasing the amount of imports (41 percent). In addition, 68 percent of respondents indicated their organizations will increase employee travel outside the United States and Canada.

Senior-level executives and risk managers agreed that the top three threats to their business operations or business conducted outside the United States and Canada are currency risk (23 percent), supply-chain failure (16 percent) and credit risk (13 percent). In the 2007 Chubb Multinational Risk Survey, the top three threats were terrorism, natural catastrophes and political instability.

Companies seek protection from foreign products liability
This year's survey also found that 39 percent of companies acquired final products and product components from foreign suppliers. Forty-one percent expect to increase the amount of imports in 2008.

Although a vast majority of survey respondents (85 percent) indicated that their companies have not been affected by recent reports of defective products from China and other countries, 41 percent of all respondents are taking action to help avoid a products liability event.

One in four of all respondents are implementing new policies and procedures to qualify suppliers. Companies are also testing imported products (13 percent) and requiring foreign suppliers to carry products liability insurance in the United States and/or Canada (10 percent). Fewer companies have halted importing certain products and components or have changed or stopped using foreign suppliers.

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•Date: 29th April 2008• Region: US •Type: Article •Topic: Operational risk
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