The latest research by commercial property insurer FM reveals Australian businesses are facing a growing wave of “unseen risks” – disruptive events that fall under the radar but have devastating financial impacts when they materialise.

The report, “Sight Unseen: Navigating Out-Of-Sight Risks”, conducted in partnership with The Economist, exposes these critical vulnerabilities, including cyberattacks, climate events, geopolitical shifts, and supply chain disruptions. These events are already impacting most businesses, with over 70 per cent of executives reporting revenue or profitability losses due to unexpected risks.

“Australian businesses face immediate challenges and financial consequences from climate change, cyber threats, and data breaches, which are already reshaping our economy and infrastructure” says Andrew Stafford Operations Manager, FM Australia.

“This research underscores the importance of proactive risk management and resilience building to mitigate the impact of these ‘out of sight’ risks before they escalate into major crises. By understanding and addressing these vulnerabilities, businesses can protect and safeguard their operations and build a more resilient future.”

Key findings: 

• “Out of sight, out of mind” impacting preparedness: While most executives acknowledge the impact of disruptive events, 55 per cent surveyed said most risks impacting their organisations were unexpected and a quarter confessed to not being sufficiently prepared. This disconnect stems from a tendency to view these risks as longer-term challenges rather than immediate threats.
• Underestimating climate risks: Despite Australia’s high climate risk, it ranks highest in the Asia Pacific for de-prioritising climate-related risks, with 24% of businesses considering them low or medium priorities.
• Cybersecurity a high priority, but data protection lags: 90 per cent of respondents identified cybersecurity threats and data breaches as high-priority risks, reflecting recent high-profile hacks. However, only 11 per cent prioritise regulatory concerns around non-compliance with data protection rules, creating a potential blind spot.
• Physical asset risks remain a concern: A significant 81 per cent of Australian executives deem equipment outages and accidents as high priority risks. In addition to costly downtime, the fallout of such incidents can include long term reputational damage.
• Disconnect between risk awareness and action: The research highlights a disconnect between acknowledging risks and taking action. Many businesses lack the data analytics capabilities and risk management skills needed to effectively address these challenges.
• Still lacking in preventative solutions: Science-based preventive tools and techniques, such as flood engineering, are only used by a minority of surveyed organisations (29 per cent), with just 8 per cent having plans to employ them in the next five years. Experts surveyed say that risk management skills in Australia are lagging behind other markets, including the US. 

FM’s 2025 Resilience Index reinforces these findings, highlighting Australia’s low ranking against other global nations on climate risk. This data emphasises the urgent need for Australian businesses to reassess their risk management strategies and prioritise preparedness for unforeseen events. The publicly available Resilience Index helps businesses understand a country’s vulnerability to disruptive events and make more informed risk management decisions.

Read the full report for Australia [•%09Many%20organisations%20see%20these%20risks%20as%20longer%20term%20challenges,%20rather%20than%20immediate%20issues.]here.

About FM

Established nearly two centuries ago, FM is a leading 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 to better understand the hazards that can impact their business continuity to make cost-effective risk management decisions, combining property loss prevention with insurance protection.

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