Businesses are responding to climate change but underestimate the risk or believe it is too expensive to insure, according to FM.

The US mutual insurer surveyed 800 risk managers and 150 brokers worldwide and found about 62% have suffered at least one severe disruption due to extreme weather in the past three years.

While 95% of corporate risk decision-makers say they are fully or mostly aware of their extreme weather exposures, only 67% of brokers believe the same of their clients.

Brokers estimate clients’ insurance will cover less than half their losses from an extreme weather event, but 44% of risk managers say fully insuring costs too much.

FM chief science officer Louis Gritzo says more organisations are tracking the weather.

Some invest in resilience measures to keep down insurance costs, but others view their insurers as “risk police” and try to keep interaction to a minimum.

Dr Gritzo says the industry faces a challenge to partner with clients “and move from transactional oversight to working together to mitigate the risks”.

He notes boards are paying more attention to extreme weather because of pressure from regulators and investors.

In Europe, regulators expect businesses to show how climate events could affect them “and the same shift is happening the US and Australia”.