The weather is changing and it’s changing fast

The impact is more devastating than ever and it’s affecting regions once considered to be at low risk, upending what businesses and their risk partners thought they knew about the weather.

The good news? Organizations are responding. They’re educating themselves on these changes, tracking and monitoring the weather to be better prepared. And they’re implementing resilience measures to weather the storm, whatever form it might take. Despite these efforts, awareness gaps are emerging in many businesses of the true nature of the risks and in their ability to respond effectively. That’s according to FM’s survey of 800 risk decision-makers, including C-Suite executives and risk managers, at businesses in the industrial, manufacturing, and technology sectors, and 150 insurance brokers across the globe. While most businesses are confident they understand the nature of the risk, FM’s research shows they may not have the full picture. Most underestimate the exposure of the countries in which they operate to extreme weather. And most have not fully mitigated these risks: on average, risk decision-makers estimate that their insurance covers less than half the potential cost of an extreme weather event.

“Awareness gaps are emerging in many businesses of the true nature of the risks and in their ability to respond effectively.”

These gaps in awareness and mitigation are emerging at a time when businesses are under increasing pressure from their employees, investors, and regulators to demonstrate full awareness of these threats and plans to manage them, both within and beyond their own operations. If your organization is facing these challenges, you are not alone. There is a range of strategic and tactical measures you can take to increase your resilience levels, while bringing greater levels of stability and effectiveness to your long-term insurance spend. But to ensure these measures mitigate the risks today and account for future changes, it’s vital that your plans are based on robust climate science. Effective and lasting resilience requires an understanding of how extreme weather and the associated risks are evolving, and how resilience can be built into business operations and supply chains from end to end. That requires genuine partnership between buyers and their risk experts—the kind of partnership that, at FM, we have been building for nearly two centuries.