RMS and RAND Launch Center for the Study of Terrorism Risk Management

Workshop held on June 19th, 2003 in Washington D.C.

In December 2002, RMS and RAND announced the formation of a strategic alliance to pursue a collaborative research agenda to facilitate the formation of sound public policy vis-à-vis terrorism risk. The vehicle for this collaboration, the RAND Center for the Study of Terrorism Risk Management, was launched at a roundtable co-hosted by RMS and RAND in RAND's Washington D.C. office on June 19th, 2003. Thirty representatives from leading insurers, reinsurers, intermediaries, trade associations, TRIA, and the Treasury attended this event, that featured briefings on terrorism risk and related issues from several of RAND's top terrorism experts.

	Dr. Bruce Hoffman, the director of RAND's Washington D.C. office and one of the world's leading experts on terrorism risk, briefed roundtable participants on "The Future of Terrorism." In this briefing, Dr. Hoffman described the implications of the ongoing threat from al-Qaeda, and his view that despite the significant progress thus far in the war on terror, this 'movement' remains a clear danger to the United States and will do so for the foreseeable future.
	John Parachini, a RAND policy analyst who is currently researching terrorist's propensity to acquire and use nuclear, biological, radiological, and chemical weapons, briefed roundtable participants on "Motives, Means, and Mayhem: Terrorist Acquisition and Use of Unconventional Weapons." In Mr. Parachini's briefing, he described his analyses of over 20 historical cases studies of terror groups' attempts to acquire or use such weapons, and his work to parameterize and mitigate the likelihood of this threat.
	Dr. Sam Bozzette, a senior natural scientist at RAND Health and board-certified medical doctor in Internal Medicine and Infectious Diseases, briefed roundtable participants on "Smallpox: Attacks, Responses, Outcomes, and Options." Dr. Bozzette described the analyses he performed which contributed to President Bush's decision to make the smallpox inoculation of medical first responders a national policy. His research resulted in the development of a probabilistic model of smallpox contagion, which he used to explore the cost-benefit relationship of various inoculation strategies across attack scenarios ranging from contamination of the HVAC system of an office building to simultaneous attacks in major airports throughout the country.
	Dr. Lloyd Dixon, a senior economist with RAND's Institute for Civil Justice, briefed roundtable participants on "Compensating Victims of Terrorist Attacks: Lessons Learned from the September 11th Attacks and Visions for the Future." In his presentations, Dr. Dixon described the preliminary findings of an 18-month study on the assistance and compensation that victims, individuals, and businesses have received from insurers, charitable organizations, and government programs.
	Dr. Jerry Green, the director of the RAND Center on Middle East Policy, briefed roundtable participants on "Sources of Terrorism in the Middle East," and provided a colorful description of how the subject of terrorism permeates the political dynamic of the region.

In addition to the briefings, Dr. Robert Reville, the co-director of the new Center for the Study of Terrorism Risk Management described how RAND will apply over 25 years of multidisciplinary institutional expertise on terrorism in collaboration with the modeling capabilities of RMS. Already, a team of RAND analysts has successfully completed an extensive peer review of the RMS terrorism models. By combining RMS and RAND capabilities, the Center intends to pursue research to advise public policy makers in Washington D.C. on a broad range of issues relating to terrorism risk management and homeland security, and liability and compensation for terrorist attacks. However, a particular focus will be on the terrorism insurance policy, exploring such topics as the insurability of terrorism risk, the appropriate role for government in private terrorism insurance markets, and if TRIA should be amended or renewed in 2005. To help advance this research agenda, RAND is actively seeking direction and financial support from the insurance industry.

For more information about the RAND Center for the Study of Terrorism Risk Management, please contact Dr. Andrew Coburn of RMS at andrew.coburn@rms.com.