April 27, 2007 by Canadian Underwriter
Top-level company executives and risk managers may not always see eye-to-eye when it comes to the risks associated with international expansion, according to the 2007 Chubb International Risk Survey.
The survey was conducted jointly in March 2007 by Opinion Research Corporation, a worldwide research firm in Princeton, NJ, and the Chubb Group of Insurance Companies in Warren, NJ.
The Internet survey queried C-level executives i.e. chief executive officers, chief operating officers and chief financial officers and risk managers at 242 U.S. companies.
More C-level executives (43%) noted that international risks pose a greater threat to their companies than domestic risks, compared to only 16% of risk manager respondents, the survey found. There are also differences in the types of risks that C-level executives and risk managers are most concerned about when it comes to the companies’ multinational exposures.
For example, 24% of risk managers cited natural catastrophes such as hurricanes and earthquakes as the top threat posed by a company’s overseas business operations or the business it conducts abroad, whereas 24% of C-level executives found terrorism to be the top threat.
“The findings illustrate the importance of an emerging trend toward closer collaboration between an organization’s risk manager and its most senior executives,” said Kathleen Ellis, senior vice president, Chubb & Son, and worldwide manager of the Multinational Risk Group for Chubb Commercial Insurance.
“To effectively allocate resources, organizations need a clear, agreed-upon big picture of global risk-one that’s built on many perspectives. Companies that don’t take this holistic approach could find themselves unexpectedly self-insuring losses that occur outside the United States and Canada.”