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Firms doing business abroad fear supply chain failure the most: Survey

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Supply chain failure and data breaches are the top overseas business threats, according to a survey of U.S. and Canadian businesses that Chubb Group of Insurance Cos. released Tuesday.

Nineteen percent of the 300 respondents in the “2014 Chubb Multinational Risk Survey” identified supply chain failure as the top oversees business threat, Chubb said in a statement.

Data breach/cyber event, cited by 15%, was ranked second. Government/regulatory investigation and political instability both were both cited by 13%, followed by natural catastrophe at 12%.

The survey also found that 52% of businesses plan to increase overseas activity this year, 27% expect to increase overseas travel, and introduce new products in foreign markets, and 26% plan to increase their employee headcount abroad.

However, 45% of the executives surveyed said overseas risks pose a greater threat to their company than domestic risks, while 33% said overseas risk are an equal theat. In addition, 48% of the companies said they had experienced at least one loss related to conducting business overseas over the past three years.

Despite their concern about supply chain failure, 44% of companies do not have a business continuity plan that addresses overseas risk and among the 56% that do have a plan, 22% have never tested it.

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“The lack of business continuity plans and testing is disturbing,” Kathleen Ellis, change to Whitehouse Station, N.J.-based senior vice president and worldwide manager for Chubb Multinational Solutions, said in a statement. “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.”

A total of 72% of companies allow employees to use their own mobile devices, including smartphones, tablets and laptops for work.

“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,” Ms. Ellis said. “The good news is that many, but not all, executives recognize the threat and are taking steps to mitigate the risk.”

According to the survey, 82% of companies require at least one security feature on mobile devices used for work, including password protection, which is used by 75%; encryption, used by 53%; and the ability to remotely wipe clean the device, cited by 39%.

The survey was conducted by Avon, Conn.-based JLA Strategic Research L.L.C., an independent public opinion and market research firm.