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Chubb Survey Finds Smaller Companies Are More Likely to Experience a Loss Overseas
Nearly One in Two Firms Respond to Reports of Defective Products from China and Elsewhere WARREN, NJ, April 28, 2008 -As businesses continue to grow their foreign operations, small to mid-size companies are more likely to experience a loss to corporate assets outside the United States or Canada than larger companies, according to Chubb's 2008 Multinational Risk Survey. Compared to companies with annual revenues of more than $1 billion, smaller companies experienced at least a 50% higher frequency of foreign losses during 2007 for liability lawsuits, theft of intellectual property/piracy and theft of goods in transit. Smaller companies also experienced at least a 35% higher frequency of losses for crimes against and injuries to American and Canadian employees traveling or working overseas. "Larger companies often have the resources needed to take the global patchwork of different laws and languages, currencies and styles of conducting business and create corporate risk management standards throughout the world," said Kathleen Ellis, senior vice president, Chubb & Son, and worldwide manager of the Multinational Risk Group for Chubb Commercial Insurance. "Small and mid-size companies that do business overseas need to look to their business partners to help them create standards that will help reduce foreign property and liability losses and injuries to employees." Top threats shift 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%) 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%), increasing employee headcount (62%), acquiring another company (47%), and increasing the amount of imports (41%). In addition, 68% of respondents indicated their organizations will increase employee travel outside the United States and Canada. This year 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%), supply-chain failure (16%) and credit risk (13%). In the 2007 Chubb Multinational Risk Survey, the top three threats were terrorism, natural catastrophes and political instability.