FM Global Beefs Up Resilience Index

FM Global, one of the world’s largest business property insurers, four years ago created its Resilience Index to rank 130 countries and territories according to their ability to manage disruptive events.

For 2017, FM Global made the index more robust by adding three new drivers—inherent cyber risk, urbanization rate and supply chain visibility—to the previous nine, which include political risk, quality of infrastructure and control of corruption.

“Cyber is a very popular area of concern right now,” says Bret Ahnell, FM Global’s executive vice president. To measure a country’s cyber vulnerability, FM Global looks at Internet penetration and cyber recovery. However, assessing the ability to recover from an attack means looking at a country’s civil liberties. Because of the low level of civil liberties, the Middle East as a whole and Saudi Arabia in particular score very low in terms of cyber resiliency.

The volume of flood losses is key to the second driver, the urbanization rate.

“We see flooding being a much more significant event than other catastrophes,” says Ahnell. “We’re looking at the amount of unplanned development [because it] puts stress on the power grid and overall infrastructure.”

The third new driver is supply chain visibility, the ability of an organization to track consignments around a country.

With a score of 100, Switzerland took the top ranking, while Haiti came in last. The evaluations bring up some interesting issues, finding that it’s less risky to do business in Germany than in the US, for example.