Although brokers rank embedding risk engineering into new site design as the most effective resilience measure, only 28% of companies have fully implemented it, a new report from FM warns, pointing to untapped opportunities to limit losses from extreme weather.
The report, Ready for the Storm: Closing the Extreme Weather Resilience Gap, surveyed 800 risk decision-makers and 150 insurance brokers in May 2025. The respondents came from industrial, manufacturing, and technology sectors, with annual revenues ranging from $250 million to more than $10 billion.
FM’s findings show that while many businesses recognise the threats, actions remain incomplete. Only 23% of companies reported fully selecting and installing equipment based on resilience to extreme weather, even though brokers placed it among the most impactful measures. Similarly, just 20% redesigned interiors to ensure the safe flow of floodwater, despite 61% of brokers recommending it. Cost continues to be a constraint. Among risk decision-makers, 44% said premiums are too high to secure full insurance coverage. On average, they expect insurance to cover only half of potential losses from extreme weather. Brokers were more sceptical, estimating closer to 40%.
The study also found that 62% of companies suffered at least one severe disruption due to extreme weather in the past three years. When asked to quantify potential financial exposure, risk decision-makers estimated that disruptions to supply chains, infrastructure, and customer operations could each exceed 8% of annual revenue, yet most said their insurance would cover less than half of those impacts. Awareness gaps were also evident. While 95% of risk decision-makers said they were mostly or fully aware of their exposure, only 67% of brokers agreed. An informal test comparing respondents’ estimates with FM’s Resilience Index showed that 74% underestimated wind and flood exposure in countries where their most critical operations were located.
FM reported that, in 2024, its engineers assisted clients with 46,245 risk improvements, which contributed to a $1.05 trillion reduction in loss expectancy. The company also issued nearly $1.5 billion in membership and resilience credits.
The report recommends that businesses review their exposure assessments, apply resilience measures throughout facility lifecycles, consider supply chains and infrastructure, and work closely with insurers and risk experts.
With adoption of engineering-based measures still limited, are businesses prioritising cost savings over long-term resilience against extreme weather? Share your views in the comments.
