Are Australian companies ready for the next big disaster?

From the widespread bushfires of 2019 to the record-breaking east coast floods of 2022, Australia’s exposure to disaster is no longer a theoretical risk. Now, with escalating cyber threats targeting critical infrastructure and supply chains, companies are facing the stark realisation that the cost of being unprepared is rising—and fast.

This article is sponsored by FM

As climate shocks and digital disruptions become increasingly routine, a growing number of Australian businesses are abandoning the playbook of reactive damage control. In its place, they’re embracing resilience planning – a strategic shift aimed not just at surviving disasters, but withstanding and recovering from them with minimal disruption.

The pivot is driven in part by the financial reality of compounding risks. Companies that fail to adapt are finding themselves uninsurable, uninvestable, or, in some cases, inoperable. According to the Insurance Council of Australia's Insurance Catastrophe Resilience Report 2023–24, insurers incurred approximately $2.19 billion in claims from declared extreme weather events during the 2023-2024 period. This figure matches the previous year's losses, highlighting a persistent trend of costly natural disasters. 

Resilience planning now often includes climate risk modelling, investment in physical asset hardening, and scenario testing for both environmental and cyber threats. In flood-prone areas, manufacturers are raising electrical systems and installing waterproof barriers. Agricultural businesses are investing in drought-resistant technologies and diversified supply chains. Retailers are building digital redundancies to protect operations in the event of ransomware attacks or internet outages.

 

One major shift is in how businesses evaluate risk. Many companies are co-ordinating closely with local governments and emergency services to align contingency planning with broader disaster response efforts. They’re also no longer relying solely on financial or compliance-based frameworks, and are using engineering assessments, data analytics, and predictive modelling to anticipate threats before they happen. 

 

Paul May, operations engineering manager, Australia at commercial property insurer FM, said in light of the recent uptick in risk, the company has enhanced its practical engineering advice on climate resilience. 

“In addition to offering engineering solutions to exposures that exist today, we can now provide an insight into potential climate risks in the future – as far forward as 2050. This really helps businesses understand how climate change may impact their risk profile over time.”

He said in reaction to the increase in risk, FM had created a program that offers clients ‘resilience credits’, to help them fund the improvements being recommended. This has enabled FM clients to eliminate approximately USD$30billion in business exposure since 2022.

As Australia braces for another unpredictable event – be it weather, geopolitical tension, or digital volatility – the question is no longer whether the next disaster will come, but whether companies will be ready. For many, the answer will hinge not just on what they insure, but how well they’ve built resilience.

“To avoid a nasty surprise when the next event hits, businesses need to have a clear view of their own risk appetite,” May said. “What risk can their business absorb; what risks can be mitigated and what risks need to be transferred via an insurance product.”

“Preparedness isn’t about fear, it’s about foresight. The companies that understand this are the ones who are best positioned when the next disaster hits.”

FM works to understand individual businesses and their specific risk exposures. For a detailed consultation, evaluation and risk report, contact FM today by visiting fm.com.