FM Global Aims to Build Circle of Resilience

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Last September, FM Global announced its second consecutive resilience credit to support client investment in climate resilience solutions. US$350 million was made available to FM Global's clients to advance mitigation measures against extreme weather hazards such as wind, flood and wildfire. It followed a US$300 million credit distributed in 2022, which FM Global estimates led to a US$20 billion reduced economic impact.

"Investing in resilience is more important than ever," said Malcolm Roberts, president and chief executive officer of FM Global last year, noting that climate-related perils continue to impact FM Global's clients and drive the current insurance market. "With the increasing frequency of disruptive events around the globe, our clients need the tools and resources to invest in risk mitigation solutions and support business continuity," said Roberts. "The resilience credit enables our mutual owners to protect against climate change risk today, invest in tomorrow, and make a positive impact on their customers, colleagues and communities."

In an article published in StrategicRISK today, FM Global’s operations manager, Bill Bradshaw continues the theme. “Insurance alone is not enough,” says Bradshaw. “From a flood or wind perspective, there are lots of things you can do to manage those exposures to make sure that facilities are in the best position possible. There has to be some element of risk mitigation running alongside that.”

Referring to the FM Global's objective as “a circle of resilience," Bradshaw added “If our customers take control of their risks, we can see less losses together, which means we can generate more profit and provide more resilience funding. That’s a big part of what our mutual model is all about – investing in clients and good decisions to go on a journey together that will ultimately help those clients be successful in their business."

FM Global is a mutual insurance company, and as such distributes profits to policyholders, which in turn creates a unique opportunity to incentivise climate risk mitigation and adaptation.

As Bradshaw explains, “As a mutual company, we can take a really long-term view of risk – we don’t need to knee-jerk whenever something happens in the markets. We made the decision a couple of years ago to take a certain amount of our surplus and give it back to our clients... to reinvest back into resilience measures for their business."

Bradshaw also commented on the importance of data in driving resilience investments. “Good data equals good decisions, equals successful businesses” said Bradshaw. "We know resilient businesses are successful. We are able to go to clients and say ’this is your exposure now, this it will be in the future and, if you were to spend and invest this money [into resilience measures now], this is what it would do to your risk long term’."

Bradshaw also tied the importance of data driven resiliency together with both business and societal impact. "Data has a very real operational impact for insureds, as it allows them to make business-critical decisions around how to protect themselves most effectively from disasters," said Bradshaw. “Ultimately, we all suffer in society if a pharmaceutical plant stops functioning, if food factories or power generation plants close down – so there’s a collective responsibility to address some of these things.”

FM Globals Resilience Credit is part of what it calls a Climate Resilience Product Suite that also includes:

  • Climate Change Impact Report – Uses FM Global's unique, site-specific data to show clients how climate change may affect their facilities by 2030 and 2050.
  • Climate Risk Report – Uses FM Global's unique, site-specific data to show clients the event-driven climate risks that exist at their locations today and recommends how to mitigate them.
  • Climate Reporting Aid – Helps clients with reporting exposure to climate-related risks and the impact on their organizations.
  • FM Global Resilience Index – A client and public resource that offers executives insight into the vulnerabilities of a country’s business environment and its resilience to help inform strategic decisions.


Bradshaw's comments to StrategicRISK are available here. 

Source: StrategicRISK, | FM Global,