The risk of cyberattack, once overhyped, now threatens businesses’ very existence, according to a recent survey, 2018 FM Global Resilience Index. These attacks raise the specter of stalled operations, disrupted supply chains, class-action lawsuits and permanent brand damage.
Its severity varies significantly with geography: For example, inherent cyber risk has climbed in France over the past year while plummeting in Taiwan, two of the biggest changes in cyber risk in the index.
Cyber risk is just one of the indicators of the index which reflects data related to economics, natural hazards and supply chains, and addresses deep concerns about business risks including political upheaval, fire and hurricanes.
Looking at the rankings Switzerland again holds the top spot in overall resilience in the index, followed by Luxembourg and Sweden—all the same as last year. Haiti is the bottom-ranked country followed by Venezuela and Nepal—also the same order as last year.
“Our mission is to give global business executives powerful intelligence to support their decisions about where to site facilities, what partners to select, and how to manage their risks,” said Thomas A. Lawson, CEO at FM Global.
Some Specific Findings for US
The United States saw its rank in political resilience drop over the last year from 31st to 46th. The fall likely reflects a turbulent diplomatic climate intensified by North Korea’s nuclear threat and signs of Russian election meddling.
The political risk driver of the index draws on data from the World Bank and represents “perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism.”
Despite a fraught political climate, the group says, the U.S. remains a country with a resilient environment for business with its regions coming in 9th, 10th and 15th on the overall ranking—or the top 12% of all countries ranked.
Cyber Risks Across the Globe
France fell 33 places in the cyber resilience dimension of this year’s index from 68th to 101st of 130 regions. The drop reflects a deterioration in civil liberties within the country rating and a slight uptick in the country’s internet penetration.
Internet penetration also explains Australia’s nine-place fall in cyber resilience. The country and continent dropped from 66th to 75th of the 130 regions ranked in the Index, driven by a 3% increase in internet penetration.
Taiwan’s cyber resilience, on the other hand, soared 57 places from 107th to 50th, the biggest rise in the index, due in large part to an increase in its civil liberties.
As these examples show, different nations exhibit different cyber risks, according to Lawson. “Although the internet transcends national boundaries, users, businesses and defenses do not.”
Natural Hazards a Wild Card
Natural hazards are another concern for business executives as demonstrated by 2017’s Atlantic hurricane season, the most expensive on record. Hurricanes Harvey, Irma and Maria claimed hundreds of lives, cost an estimated $265 billion and caught many executives less than fully prepared.
Geographies in the index with significant natural hazard exposure include China Region 1 (ranked 69th), the Philippines (88th), Japan (24th), Mexico (62nd) and U.S. Region 1 (ranked 10th).