Corner office, risk managers see international risk differently.

C-level executives and risk managers have different views on the risks their companies will face when they expand globally, according to the 2007 Chubb International Risk Survey.

More C-level executives--43%--said international risks pose a greater threat to their companies than domestic risks, compared to only 16% of risk-manager respondents.

Chief executive officers, chief operating officers and chief financial officers also differ from risk managers in their views of the types of risks that they are most concerned about when it comes to the companies' multinational exposures. Almost a quarter--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, versus 24% of C-level executives who found terrorism to be the top threat.

Respondents' perspectives also differed on international trends in professional liability. More than half of C-level executives--59%--said they believe that employment practices liability is becoming a more serious source of risk outside the United States and Canada, while 55% of risk managers say directors and officers' liability is becoming a more serious source of risk.

"We were surprised the C-level officers were more concerned about employee practices and fiduciary issues versus the D&O issue," said Evan Rosenberg, a senior vice president at Chubb & Son and global specialty lines manager for Chubb Specialty Insurance. "It's interesting, because in our experience, employee practices claims have had some increase in frequency and severity in the United Kingdom, but it's not a big issue globally. We don't see a lot of class-action litigation there, like we do in the U.S. The risk managers are more on line. D&O pressure is the No. 1 increase in non-U.S. obligations."

Also, as more countries develop their own insurance marketplace, more of them could make D&O insurance compulsory or require the purchase of a locally admitted D&O policy to comply with local admitted laws, Rosenberg said.

Companies also need to recognize that some corporate governance trends start outside the United States. For instance, many European countries are taking a more aggressive position on disclosure than their counterparts in the United States on the global warming issue, said Rosenberg. According to Chubb's survey, only one in four companies is studying the impact of global warming on their business.

Seventy-six percent of survey respondents said their company is likely to expand its operations outside the United States and Canada in 2007, and 86% anticipated that revenue from these operations is likely to increase over the next five years.

The survey, which interviewed 242 C-level executives and risk managers, was conducted jointly in March 2007 by Opinion Research Corp., a worldwide research firm in Princeton, N.J., and the Chubb Group of Insurance Cos. in Warren, N.J.

Loss/Risk Management Note is compiled by Senior Associate Editor Meg Green.