Extreme Weather Risk is Growing, as are Gaps in Resilience: FM Report

Ready for the Storm: Closing the Extreme Weather Resilience Gap – New report reflects views of 950 risk decision-makers and insurance brokers

Johnston, RI (Sept. 18, 2025) – Global businesses are seeing the effects of increasingly frequent extreme weather, but many are missing opportunities to fully protect against it, according to a new report by commercial property insurer FM.

The report, “Ready for the Storm: Closing the Extreme Weather Resilience Gap,” found that many companies are not fully adopting cost-effective opportunities to close resilience gaps. And while 95% of risk decision-makers at corporations believe they are fully or mostly aware of the extreme weather exposure of their business, only 67% of brokers believe the same of their clients, according to the report. The survey also found that 62% of risk decision-makers report they have suffered at least one severe disruption due to extreme weather in the past three years.

FM’s report included recommendations for businesses to close the resilience gap, including taking a long-term view of risk and evaluating supply chains.

In the report’s survey of 150 brokers and 800 risk decision-makers from industrial, manufacturing and technology companies:

• 78% agree that changing weather systems render past assumptions about their exposure irrelevant.
• Risk decision-makers on average believe their insurance would cover only half of their potential losses due to extreme weather.
• 44% of risk decision-makers say the cost of insurance is too high to secure full coverage.

The survey also asked respondents about the countries where they had their most business-critical operations. As an informal test, FM asked respondents to estimate what percentage of those countries’ economic activity was exposed to wind or flood. About three quarters of corporate buyers underestimated the figure when compared to the FM Resilience Index.

Organizations are responding

“We found emerging gaps in awareness and mitigation at a time when many businesses face increasing pressure from their employees, investors and regulators to fully manage weather-related threats, both within and beyond their own operations,” said Dr. Louis Gritzo, chief science officer at FM. “The good news? Organizations are starting to respond. They’re educating themselves on these changes and tracking and monitoring the weather to be better prepared. They’re implementing resilience measures to weather the storm, whatever form it might take.”

For nearly two centuries, FM has helped clients prevent loss through science – by deeply understanding hazards – and engineering the risk out of property and operations. Unfortunately, only 28% of risk decision-makers in the new survey say their organizations have fully embedded risk engineering in the design and construction of new sites. Brokers rank this action more effective than reviewing, inspecting and equipping built-out properties.

The self-funding cycle of resilience

To close resilience gaps, FM engineering teams advise clients throughout the lifecycle of a facility, from location selection to emergency response planning. In 2024, FM helped clients complete 46,245 risk improvements, resulting in a US$1.05 trillion reduction in loss expectancy. While cost will always be a consideration, investing in resilience against extreme weather creates a virtuous cycle in which insurance savings can be reinvested in further risk mitigation measures.

These insights and findings can be found in FM’s new report, “Ready for the Storm: Closing the Extreme Weather Resilience Gap.”

Methodology

The report is largely based on FM’s May 2025 survey of 800 risk decision-makers – half from the C-suite and half from risk management – in industrial, manufacturing and technology businesses around the world with revenue ranging from US$250 million to more than US$10 billion, as well as 150 insurance brokers.

About FM

Established nearly two centuries ago, FM is a leading mutual insurance company whose capital, scientific research capability and engineering expertise are solely dedicated to property risk management and the resilience of its policyholder-owners. These owners, who share the belief that the majority of property loss is preventable, represent many of the world’s largest organizations, including one of every four Fortune 500 companies. They work with FM to better understand the hazards that can impact their business continuity to make cost-effective risk management decisions, combining property loss prevention with insurance protection. For more information, please visit www.fmglobal.com.

Source: FM Global

Tags: FM Global, Natural Catastrophes, protection gap, resilience, severe weather