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Saturday 17 March 2018


FM Global: New insights into business vulnerabilities

Written by staff reporter

New insights have emerged around three of the most pressing risks to business performance, namely cyber attack, natural hazards and supply chain failure.

According to FM Global's latest annual index, oil-rich Saudi Arabia has emerged as a country with above-average inherent cyber risk. Its high internet penetration, combined with a limited cyber security industry, make it a more vulnerable target. Developing India, by contrast, with its growing information technology industry, emerges as a country with below-average inherent cyber risk.

For companies aware of the heavy toll of natural disasters, Sweden has above-average resilience due, in part, to its lower-than-average exposure to hazards such as windstorms, flood and earthquakes. On the other hand, flood-prone Bangladesh, a major manufacturing hub for apparel and textiles, ranks toward the bottom of the index.

For companies with global supply chains, Germany, a major exporter and importer, ranks near the top in resilience, driven in part by its strong ability to demonstrate where parts, components or products are in transit. Russia ranks below average in this respect.

“Our clients have found the index valuable when making important decisions about their properties, business strategies and supply chains,” said Bret Ahnell, executive vice president at FM Global, one of the world’s largest commercial property insurers. “We upgraded the index this year to reflect escalating threats that can make a lasting impact on business performance. FM Global will continue to improve the index and make the data publicly available to any business, client or not.”

FM Global's index also ranks countries in overall enterprise resilience. Switzerland occupies the number-one ranking, reflecting high scores for its infrastructure, local supplier quality, political stability, control of corruption and economic productivity. Hurricane-ravaged Haiti ranks at the bottom of the index due in part to its high natural hazard exposure and poor economic conditions.

Many of these insights originate from three new resilience drivers added to the index this year, including inherent cyber risk; urbanisation rate; and supply chain visibility.

Other drivers of resilience that form the index include: productivity, political risk, oil intensity, exposure to natural hazard, natural hazard risk quality, fire risk quality, control of corruption, quality of infrastructure and quality of local suppliers.

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