LONDON, UK—Resilience is never more critical than in a world shocked by pandemic, and the top-ranked countries in the 2020 FM Global Resilience Index possess strong foundations for a robust rebound.

The annual index, published today by FM Global, one of the world’s largest commercial property insurers, is the definitive ranking of nearly 130 countries by the resilience of their business environments. It provides companies with objective information about countries’ economic, risk quality and supply chain resilience – factors that create a springboard for businesses working to recover from the pandemic.

“When recovering after a crisis like COVID-19, resilience should be a key consideration for people, countries and businesses,” said Adriano Lanzilotto, operations vice president and client service manager for FM Global’s London operations. “The 2020 FM Global Resilience Index provides a strong indication of how a country’s business environment may fare during the recovery phase, and how quickly organisations in that country might be able to bounce back from the economic damage caused by COVID-19. This insight can be vital for making significant decisions as they establish or relocate facilities, expand supply chains and engage with new markets.”

In addition to outlining the post-pandemic business landscape, the FM Global Resilience Index stands as a dynamic reminder that conventional business risks – flood, cyberattack, fire, hurricanes, earthquakes, oil shocks and political upheaval – continue to threaten operations and overall value. That’s worth remembering on the eve of an Atlantic hurricane season projected to see above-normal activity, and in today’s constantly evolving risk landscape.

“Unfortunately, a devastating global situation like COVID-19 does not stop other disasters from occurring,” said Lanzilotto. “With this in-mind, it is critical that businesses are diligent and make use of data-driven risk-and-resilience analysis, coupled with appropriate engineering-led loss prevention, to preserve a company’s value and growth opportunities throughout these difficult times.”

 

Top, bottom, risers, fallers

The index’s top-ranked regions (in descending order) are Norway, Switzerland, Demark, Germany, Sweden, Finland, Luxembourg, Austria, Central United States and Eastern United States (both the U.S. and China comprise three regions with differing natural hazard exposure).

Norway occupies the top spot for the second year in a row, supported by strong economic productivity, a stable political environment, low corruption, high natural hazard risk quality and robust corporate governance.

The United Kingdom ranked 13th for its overall ranking in this year’s update to the FM Global Resilience Index. The country also continued to rank highly in the 2020 index for a variety of drivers of resilience that underpin the country’s overall ranking, including supply chain visibility (ranked 4th), quality of infrastructure (ranked 11th) and natural hazard risk quality (ranked 12th).

The bottom 10 countries in the 2020 Resilience Index overall (in descending order) are Nicaragua, Nepal, Mali, Mozambique, Iran, Lebanon, Chad, Ethiopia, Venezuela and Haiti.

A major riser in this year’s index is Taiwan which climbed 6 places to 29th place based on improvements in its natural hazard risk quality and quality of infrastructure. A major faller in the index is Nicaragua, which fell 9 places to 121st place due to increases in cyber risk and political risk as well as decreased control of corruption.

How to use the index

Index data like this is designed to help chief financial officers (CFOs) and other business leaders make prudent business decisions as they site facilities, extend supply chains and cultivate customers. A lack of business resilience can result in long-lasting effects on market share, growth opportunities and investor confidence – all contributors to business value.

“Resilience is ultimately a product of the choices businesses make, including where they do business and how they invest in each location,” said Sanjay Chawla, chief investment officer at FM Global. “The index is designed to make these choices clearer as executives weigh the regular strategic reasons – logistics, labour force and market opportunity – for selecting particular geographies.”

Index methodology

The Index’s rankings are based on 12 equally weighted measures of resilience in three categories, including:

THE FM GLOBAL RESILIENCE INDEX
 

 

ECONOMIC

RISK QUALITY

SUPPLY CHAIN

 

 

DRIVERS

Productivity

Exposure to Natural Hazards

Control of Corruption

Political Risk

Natural Hazard Risk Quality

Quality of Infrastructure

Oil Intensity

Fire Risk Quality

Corporate Governance

Urbanisation Rate

Inherent Cyber Risk

Supply Chain Visibility

 

 

Additional index resources

 

About FM Global

Established nearly 200 years ago, FM Global is a mutual insurance company whose capital, scientific research capability and engineering expertise are solely dedicated to property risk management and the resilience of its client-owners. These owners, who share the belief that the majority of property loss is preventable, represent many of the world’s largest organisations, including one of every three Fortune 1000 companies. They work with FM Global to better understand the hazards that can impact their business continuity in order to make cost-effective risk management decisions, combining property loss prevention with insurance protection.