This article was produced in partnership with FM
For insurers and brokers, understanding how an economy responds to shocks is as important as knowing the specific perils their clients face.
The FM Resilience Index is designed for exactly that purpose: to capture a country’s vulnerability to disruptive events, its ability to recover quickly, and which risks are manageable. It draws on 18 measures across macroeconomic, environmental, and physical factors, offering a data-driven framework to guide underwriting and advisory strategies.
Australia’s 13th-place ranking in the 2025 edition carries important signals for insurers and brokers assessing market risk, underwriting strategies, and client advisory approaches. The composite score of 89.7 reflects the country’s strong foundations in governance, economic output, and human capital, alongside persistent exposures in inflation, climate, and energy use.
For insurance professionals, the rankings offer a clear view of where systemic strengths can support stability—and where exposures demand closer attention.
Australia’s robust GDP per capita (12th globally) and productivity ranking (21st) point to a solid economic base. A stable macroeconomic environment can help maintain policy affordability and client retention, while a strong service sector and investment in infrastructure create opportunities for specialised coverage, from construction to professional indemnity.
The health sector’s strong showing—14th globally—indicates lower systemic health risk and a healthier workforce, factors that can indirectly support group life, income protection, and corporate benefits portfolios.
Top-ranked education performance also has implications for talent pipelines, both within the insurance workforce and across client industries, supporting the skill sets needed for resilience planning and risk management.
But the index also makes clear where vulnerabilities lie. The 67th-place inflation ranking reflects persistent cost pressures: Higher wages, construction costs, and interest rates flow directly into claims inflation, particularly for property, motor, and liability lines. Brokers may need to work closely with clients to manage expectations on premium movements and explore higher deductibles or revised limits to maintain affordability.
High energy intensity (103rd) and emissions (89th) highlight Australia’s reliance on carbon-heavy industries and the associated transition risks. For insurers, this means balancing the capacity to support sectors such as mining and manufacturing with the growing need for ESG-aligned underwriting.
Climate change exposure (106th) and water stress (31st) place agriculture, mining, and tourism squarely in the path of weather-related perils. Property, business interruption, and crop insurance lines will require careful risk selection, pricing for catastrophe exposure, and consideration of parametric solutions.
Strong governance scores—12th in political risk and 10th in control of corruption—support investor and market confidence, providing a stable platform for insurance growth.
The logistics ranking (23rd) and high internet usage (25th) point to reliable infrastructure and digital connectivity, underpinning the operational resilience of both insurers and their clients. However, sub-par fixed broadband speeds could be a bottleneck for digital claims and policy administration in some regions.
The 25th-place urbanisation ranking suggests planned growth that can reduce strain on infrastructure and services. Coupled with strong fire risk quality (18th), these factors can lower insured loss potential in well-managed urban areas.
Strategic implications for insurance:
Australia’s 2025 FM Resilience Index profile paints a picture of a market with solid institutional and economic capacity, yet with environmental and cost pressures that will test insurers’ ability to adapt.
For brokers and underwriters, the value lies in applying the index as a decision-making tool—one that can link global risk metrics directly to day-to-day insurance strategy.
