Author Archives: Gordon Woo

About Gordon Woo

Catastrophist, RMS
Gordon is a catastrophe-risk expert, with 30 years’ experience in catastrophe science, covering both natural and man-made hazards. Gordon is the chief architect of the RMS terrorism risk model, which he started work on a year after joining RMS in December 2000. For his thought leadership in terrorism risk modeling, he was named by Treasury & Risk magazine as one of the 100 most influential people in finance in 2004. He has since lectured on terrorism at the NATO Center of Excellence for the Defense against Terrorism, and testified before the U.S. Congress on terrorism-risk modeling. As an acknowledged, international expert on catastrophes, Gordon is the author of two acclaimed books: “The Mathematics of Natural Catastrophes” (1999) and “Calculating Catastrophe” (2011). Dr. Woo graduated as the best mathematician of his year at Cambridge University and he completed his doctorate at MIT as a Kennedy Scholar and was a member of the Harvard Society of Fellows. He also has an Master of Science in computer science from Cambridge University.

Containment of COVID-19 Is the Best-Case Scenario

Dr. Tedros Adhonom Ghebreyesus, director-general of the World Health Organization (WHO), has insisted that containment of COVID-19 is feasible, and must remain the top priority for all countries, but that there is not a one-size-fits-all approach. This was reiterated by Dr. Gaudenz Silberschmidt, director, health and multilateral partnerships – external relations at the WHO, who gave a keynote talk at the ReFocus 2020 conference in Las Vegas on March 3. This is the leading annual meeting for senior figures in the life insurance industry.

After his keynote, as an expert on pandemic risk modeling, I participated in a panel together with Dr. Silberschmidt and others, on the benefits of prevention. All the panelists, including myself, expressed support for this focus on containment, and the overall approach the WHO is taking in dealing with the COVID-19 outbreak, especially in Iran where the WHO has sent an urgent mission.

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Economic Impact of COVID-19 Will Be Far Worse than SARS

Imagine being seated for eleven hours on a plane next to a passenger wearing an anti-viral face mask, and with a hand sanitizer clipped to his back-pack, which he dipped into for cough relief lozenges. This was my stressful experience last week; and it could be a common anxiety in the months ahead.  IATA has estimated a revenue loss of about USD $30 billion this year, most of which would be in the Asia-Pacific region. But this was assuming that Covid-19 would play out like SARS in 2003, which caused a sharp decline for six months, followed by a quick rebound.  Many business sectors other than aviation are likewise hoping for recovery after the summer. The fate of the Tokyo Olympics depends on recovery by July.

SARS was a very severe disease. Most patients developed pneumonia, and about 10% died. According to China CDC, about 5% of Covid-19 patients have critical diseases including respiratory failure, septic shock and multiorgan failure.  In about 14% of cases, the virus causes severe diseases including pneumonia and shortness of breath. But about 80% of patients have a mild form of disease. Reassuring as this may sound, the mildness of most cases makes Covid-19 a far greater global menace than SARS. Those infected with SARS were not infectious during the incubation period.  This greatly facilitated the task of tracking infected contacts of SARS cases; surveillance could focus on those contacts who developed symptoms.

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Coronavirus Event Cancellation Risk

In the spring of 2003, RMS pioneered quantitative event cancellation risk analysis with a study for FIFA in respect of the 2006 World Cup in Germany. As it happened, SARS was first reported outside China in February 2003, and was rampant throughout the duration of the risk analysis. At that time in London, as in Asia, sensible precautions such as avoiding busy Chinese restaurants was a rational defensive measure. Since the World Cup was scheduled for three years later – the summer of 2006, SARS was not considered as a cancellation risk. Terrorism was the primary risk to which investors in Golden Goal Finance Ltd were exposed.

Thanks to intensive global contact-tracing, and the need for an infected person to be symptomatic before being contagious, the World Health Organization was able to declare the SARS outbreak contained in July 2003. Nearly seventeen years after SARS, a novel coronavirus related to SARS appeared in China over a month ago in December 2019. Whereas SARS had a case fatality rate of about ten percent, the novel coronavirus (2019-nCoV) is more benign. The case fatality rate is currently estimated at just a couple percent. But even this level is highly disruptive, and all risk stakeholders will be anxious over the number of months before 2019-nCoV is contained.

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Clues on the Coronavirus Contagion

Epidemiologists are disease detectives. The investigative insights of a forensic epidemiologist are exemplified by Sherlock Holmes, whose creator, Arthur Conan Doyle, qualified as a medical doctor in Edinburgh. With limited information, some of which may be dubious and misleading, epidemiologists search for hidden clues as to the cause of a disease and its manner of population spread and use statistical modeling techniques to estimate the degree of disease contagion and the number of cases of infection. 

Prof. Neil Ferguson heads the World Health Organization (WHO) Collaborating Center for Infectious Disease Modeling at Imperial College London. His search for scientific understanding using sparse observational data dates back to his theoretical physics PhD at Oxford. Like others trained in theoretical physics, Prof. Ferguson is not shy in making mathematical forecasts that may be at odds with partial data of suspect reliability. Misreporting blighted the Chinese response to the 2002 SARS outbreak.

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Spread of the New Coronavirus in the Year of the Rat

When the Middle East Respiratory Syndrome (MERS) was first identified as a coronavirus in 2012, the case fatality rate was very high at 35 percent; but thankfully there was very low human-to-human transmission. Such transmission happened in healthcare settings, or to a much lesser extent in households where people caring for an infected person had close contact. 

Camels were identified as a “reservoir host” for MERS, with infection primarily caused through direct contact with camel fluids. As evidence of very low human-to-human transmission, there were no MERS cases reported in either the 2012 or 2013 Hajj pilgrimage to Mecca, although an Indonesian couple may have caught MERS in the 2014 Hajj.

In China, there is an even larger annual migration tied to the lunar calendar – as the lunar New Year starts on Saturday, January 25. This is normally a time of happiness and celebration during family reunions. This year, there will be fear and foreboding over the new coronavirus, which emerged in December from a seafood market in Wuhan, Central China. On January 21, Chinese health authorities confirmed human-to-human transmission of the coronavirus. Fortunately, the case fatality rate seems to be quite low, just a few percent.

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New Lethal Coronavirus In China

In this the centennial year of the great 1918 pandemic, I was invited to speak at a special symposium on emerging infectious diseases at the renowned Pasteur Institute in Paris. One presentation that was both fascinating and alarming was on viruses in fish. I haven’t eaten raw fish since. When I heard that, in mid-December, a new form of pneumonia had struck a seafood market in Wuhan, central China, it seemed like a new fish disease affecting humans might have finally emerged. It turns out that the seafood market at the center of the outbreak also sold live animals and meat from wildlife such as snakes and marmots, and a wildlife primary infection source is most probable.

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Je Suis Charlie 2020

“Trump is a joke: why satire makes sense when politics doesn’t.” This was the title of a presentation at the McCourtney Institute for Democracy at Penn State on February 20, 2018. One of the cherished freedoms of democracy is satire. Since Saturday Night Live first aired on NBC in October 1975, all presidents from Ford to Trump, and other prominent public figures, have been targets of merciless satire. Censorship of satire is an affront to democracy. The murder of satirists is terrorism.

Five years ago, on Wednesday, January 7, 2015, the Paris office of the satirical weekly, Charlie Hebdo, was attacked by two Jihadi brothers, Cherif and Said Kouachi, armed with AK-47s. This was the day of the week when the editorial committee met. Of the dozen deaths, eight were Charlie Hebdo staff members, including the fearless editor Stéphane Charbonnier, known as Charb. He had declared he would “… prefer to die standing than live on his knees.” President Hollande condemned this terrorist attack as the most serious in France in more than forty years. Indeed, this event was referred to as France’s 9/11: it was like killing Voltaire.

Memorial at the Place de la Republique in Paris. Image credit: Author’s own

A measure of the singular nature of this event was the global response it triggered; not only heavily armed police security in Paris, but also a popular demonstration of millions throughout France, joined by world political leaders, expressing international solidarity against terrorism. The popular slogan, “Je Suis Charlie”, coined spontaneously at a French style magazine, echoed around the world.

At the start of a new decade, democracies are still threatened with acts of terrorist violence, aimed at coercing changes in public policy. These threats can emerge from the far right as well as from Islamists. The hate speech peddled by terrorist groups needs to be vigorously countered by the free press, including satirical publications.

As one of the most notable terrorist attacks in the Western world since 9/11, the attack on Charlie Hebdo has been insightful for affirming the basic principles of terrorism risk modeling. An overarching principle is that terrorist operations follow the path of least resistance. Charlie Hebdo was a prime target because of the global media publicity associated with the brutal assassination of the editorial committee. According to an ISIS doctrine, half of Jihad is media. Charlie Hebdo was also a soft target, having weak security compared with alternative political, economic or military targets.

Another important principle underlying terrorist operations is that too many terrorists spoil the plot. The surveillance profile of a plot is minimized by having as few operatives as possible. Brothers, like the Kouachis (and the Tsarnaev Boston marathon bombers), also have the advantage of a more compact counterintelligence footprint than terrorists from different families. 

Since the great majority of terrorist plots against Western democracies are interdicted by the security and law enforcement services, a counterfactual perspective on plots is essential for terrorism risk modeling. This perspective of reimagining history is universal, and applies to any peril, natural or man-made[1]. Carl von Clausewitz, the Prussian master of military strategy, noted that perfecting the art of warfare entails knowing not only what has occurred, but also everything that could have occurred.

On January 7, 2015, the editorial committee of Charlie Hebdo planned to have lunch after their meeting at a local bistro, Les Canailles (Little Rascals). A large table was routinely reserved for them on Wednesdays. This bistro had open public access, unlike the Charlie Hebdo office, so it would have been easy for the two shooters to storm in firing their AK-47s. Through target substitution, this bistro might well have been attacked rather than the Charlie Hebdo office.

Counterfactual thinking such as this is not mere hindsight; it can provide valuable foresight into the future. The vulnerability of Parisian restaurants and cafés was evident. Months later, on Friday, November 13, 2015, six Parisian restaurants were attacked by ISIS terrorists, along with the Stade de France sports stadium and the Bataclan theater.  

Knowledge of history is a precious resource for terrorism risk modelers. Most attacks have either happened before – or might have happened before. For insurers as well as civic authorities and businesses, strategic surprise can be avoided by reimagining history.


[1] Woo G. (2019)  Downward counterfactual search for extreme events. Frontiers in Earth Science https:/doi.org/10.3389/feart.2019.00340

White Island Risk Mitigation: A Role for Insurance

Safety from volcanic eruptions is heavily influenced by economic factors. Those who earn their livelihood from farming around a volcano may be reluctant to evacuate, and those who operate tourist excursions may be reluctant to suspend them. This may have been the case with White Island Tours which holds an exclusive license to land tourists on the privately-owned island in New Zealand’s Bay of Plenty, named White Island by Captain James Cook. Tourists averse to sea sickness have also been able to arrive on the island via helicopter through Volcanic Air.

With around 10,000 customers per year, paying up to several hundred New Zealand dollars (US$0.66 per NZ dollar) for a tour, White Island Tours has been a substantial business. But one whose financial viability would have required that as few trips as possible were cancelled because of the volcano risk.

After 22 years of business operation, the volcano erupted on December 9, 2019. There were 47 tourists on White Island; most were killed or seriously injured. 38 of the tourists were from the cruise liner Ovation of the Seas, operated by Royal Caribbean Cruises Ltd., which denies any responsibility for their excursions, which were advertised with the statement that White Island is one of the most active volcanoes in the world. The terms and conditions of cruise tickets require that any lawsuit be filed in Miami. The U.S. courts will thus decide what liability Royal Caribbean Cruises Ltd. had in vetting White Island Tours.

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The Unrehabilitated Terrorist

A few hundred yards from where Stephen Hawking first explored black holes from his wheelchair, is the Institute of Criminology at the University of Cambridge. Hawking never shied away from really hard problems; nor do the Cambridge criminologists. There is no Nobel Prize for finding viable solutions to rehabilitating prisoners, but the Cambridge Learning Together program has forged new communal pathways for addressing this major societal challenge. The program seeks to bring together people in criminal justice and higher education institutions to study alongside each other in inclusive and transformative learning communities.

The Learning Together program began at the University of Cambridge in 2014, in partnership with HMP Grendon, a small prison at a village named Grendon Underwood, outside London. This program recognizes that collaboration underpins the growth of opportunities for the learning progression of students in prison, and the development of pathways towards non-offending futures.

Five years on, a celebration alumni event was organized for Black Friday, November 29. This took place in the City of London, at Fishmongers’ Hall, off London Bridge. This happens to be close to the Monument, where the RMS London office is situated.

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MyShake: New App Unveiled for California Earthquake Early Warning

As my colleague Mohsen Rahnama reminded us in his recent blog, the last destructive earthquake to strike Northern California was on October 17, 1989. Loma Prieta was a magnitude 6.9 earthquake which resulted in 63 deaths and about four thousand injuries. The epicenter was about ten miles northeast of Santa Cruz, and seismic waves took about 30 seconds to reach San Francisco. But there was no way of communicating any earthquake early warning to residents of the Marina district of San Francisco, which suffered some of the worst damage from shaking and fire outbreak.

On October 17, 2019, the thirtieth anniversary of this earthquake, the California Governor’s Office of Emergency Services unveiled a smartphone app from the University of California, Berkeley Seismological Lab that will give all Californians the opportunity to receive earthquake early warnings.

Governor Gavin Newsom, who happened to be in the Marina district at the time of the 1989 earthquake, has urged people to download the MyShake app. This app (myshake.berkeley.edu) is available on the Apple App Store and Google Play, and relies on the ShakeAlert earthquake early warning system, developed by the U.S. Geological Survey (USGS).

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