In 2021, Denmark was the country with the highest overall resilience score of 100. Broken down into the three key resilience factors, Denmark scored 85.2 for economic risk, 94.5 for risk quality and 91.4 for the supply chain. The remaining countries ranked 2 to 10 for business resilience were: Norway, Luxembourg, Germany, Switzerland, Finland, Sweden, Austria, United States Zone 3 (central US), and the United Kingdom.
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What does corporate resilience really mean? For Eric Jones, Vice President and Global Manager of Business Risk Consulting at FM Global, this can be broken down as follows: 1) What is the risk that something bad will disrupt a company? 2) If something bad happened, would the environment allow a company to recover quickly and effectively? FM Global’s Resilience Index does “a great job” by taking a holistic view of resilience, according to Jones.
“The Resilience Index is a great conversation starter; it’s a way of getting companies to think differently about risk, ”said Jones. “The fact of the matter is that resilience and property-related risks can often be a blind spot in making important business decisions – they’re not always taken into account. The index is a great way to shed some light on this and get people to think about the risks associated with where you do or want to do business in the world. And it’s not just your own internal facilities and employees and where they are, but also anywhere in the world where you have business dependencies, especially within the supply chain, logistics and even your customers. “
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Jones gave the example of a company looking to expand into Asia, considering key suppliers in Taiwan and Singapore. In FM Global’s Resilience Index 2021, Taiwan ranks 70th overall, while Singapore ranks 12th for corporate resilience. He commented, “That doesn’t mean you won’t do business in Taiwan, but the fact that there is a higher risk there – that needs to be incorporated into the entire decision-making process. You have to go in with your eyes open […] and dig a little deeper to really understand this risk better. ”
Quantifying risks is fundamental to all facets of risk management. Understanding the potential financial implications of risk resistance helps organizations strategize and decide where to focus their resources and how to allocate capital for risk improvement. The index enables organizations to fuel these discussions and directs policyholders to areas where they need to delve further.
“Regardless of whether you are a broker, consultant, insurer, risk manager or executive, I would recommend everyone to look at the data in the Resilience Index and think about it: What does that mean? for you and your organization or your customers? ”said Jones. “The application of all of this may vary depending on your role, but ultimately it tries to answer the question: How is your business, or your client’s business, affected when you operate in different parts of the world? Where do you have to dig deeper? Who do you have to show this to?
“Start having these conversations because the reality is that risks are different around the world. And time and resources are always limited, no matter what role you’re talking about, so the index is a great way to prioritize and think about: what do we really need to focus on from a risk perspective? And it helps you understand where companies need to go deeper and kickstart the risk assessment process, and hopefully help companies become more resilient in that process. “