Iran’s Resilience Index score and global standing have improved to reach the best level on record in 2023.
An initiative of American mutual insurance company FM Global, the Resilience Index is a data-driven tool that provides analysts with a means for understanding the resilience of nearly 130 countries' business environments.
According to FM Global, the index provides insights that inform responsible strategic decisions concerning:
• A country's vulnerability to disruptive events and its ability to recover swiftly.
• 15 key drivers of resilience, such as a changing climate, political risk and control of corruption.
• Risk evaluations of owned locations, critical dependencies within supply chains, aspirations for future expansion and acquisition/divestment due diligence.
• Environmental, Social and Governance values.
Iran’s score in 2023 stood at a record high of 29.4, up from 27.3 in 2022. The country’s global standing rose from 111 in 2022 to a record high of 108 in 2023.
Composite Measure of Three Factors
The Resilience Index is an equally-weighted composite measure of three core resilience factors: economic, risk quality and the supply chain. Each factor comprises four core drivers. Scores are bound on a scale of 0 to 100 with 0 representing the lowest resilience and 100 being the highest resilience.
1. Economic: This factor represents political and macroeconomic influences on resilience. Combining to form this factor are four drivers: productivity, political risk, oil intensity and urbanization rate. Terrorism was found to be highly correlated with political instability, so these two variables are combined into a single driver: political risk.
2. Risk Quality: This factor comprises three drivers sourced from FM Global: exposure to natural hazards, natural hazard risk quality and fire risk quality. An additional fourth driver is included to capture the inherent cyber risk of a country.
3. Supply Chain: This factor pertains to the supply chain itself and comprises four drivers: control of corruption, quality of infrastructure, local supplier quality and supply chain visibility.
The new FM Global’s data has placed these 10 countries/territories atop this year’s Resilience Index:
Denmark
Singapore
Luxembourg
Germany
Switzerland
United States Region 3 (Central)
United States Region 1 (East)
Sweden
Finland
Austria
The bottom three are:
Ethiopia
Venezuela
Haiti
The biggest riser was the Dominican Republic, which rose from 99th to 95th based on a higher climate risk quality ranking in this year’s index. The biggest faller was Lebanon, which dropped from 101st to 106th, due in part to a lower ranking in health care spending.
Tan Hian Hong, operations senior vice president, operations manager, Asia, FM Global said, “Asia remains home to some of the most resilient economies on the planet as well as some of its least, reflecting the region’s continued competitiveness in an evolving risk landscape dominated by climate and economic concerns, as well as its challenges. With its global perspective, the FM Global Resilience Index provides you with a sharp lens to examine the risk profiles of new developments or supply chain expansion in Asia or around the world, reflecting our focus on robust science-based data to keep your business moving.”
The ranking of the region’s major economies reflects the region’s complexity and the challenges for international businesses and investors seeking stability and continuity in a dynamic global landscape. Singapore maintains is historically high ranking due to its strong economy, supply chain management and advanced approaches to risk management, followed by Japan, Hong Kong and Korea which all rank in the top quarter of the index due to their strong economic and supply chain resilience. Economic powerhouses China and India, as well as Singapore’s Southeast Asian neighbors dominate the mid sections of the FM Global Resilience Index, where factors including natural hazard exposure, geopolitics and infrastructure quality influence rankings.
Established nearly two centuries ago, and present in the Asia Pacific region for 50 years, 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 policyholder-owners. These owners, who share the belief that the majority of property loss is preventable, represent many of the world’s largest organizations, including one of every four Fortune 500 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.
