Category Archives: Terrorism Risk

Terrorism in Christchurch

Since 9/11, there have been sporadic attacks on Muslims in Western countries, perpetrated by right-wing terrorists, but none has been more horrific and shocking than the coordinated assault on two mosques in Christchurch, New Zealand, after Friday prayers on March 15, 2019.

Anniversaries have a special significance in the terrorist calendar. This act of wanton religious violence took place several weeks after the 25th anniversary of the most infamous mosque shooting, in Hebron, Israel, on the morning of February 25, 1994. Baruch Goldstein, a doctor raised in U.S., entered the mosque at the Tomb of the Patriarchs, pulled out an assault rifle, fired 111 shots, killing 29 Muslims, injuring 125 others. It looks as if this carnage was surpassed in Christchurch.

Terrorist lone-wolves, like Baruch Goldstein, are hard to track because they leave only a small plot planning footprint. The Christchurch attack appears well coordinated and executed, and would have left a sizeable plot planning footprint, that security officials might potentially have detected.

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Terrorism Risk for California Workers’ Compensation

The terrorism landscape has changed significantly since 9/11. There is a visible shift from large-scale attacks to a growing number of lone wolf attacks. Many believe there has not been a major terrorist event in the United States post 9/11, but one should not overlook the near-misses in the recent past which could have caused massive losses such as the 2016 New York-New Jersey bombings.

The unpredictable and catastrophic nature of terrorism led to the emergence and continued reauthorization of the U.S. Terrorism Risk Insurance Program or TRIPRA, a federal backstop for defined acts of terrorism, which facilitated insurers to continue to provide terrorism coverage after 9/11.

Assessing Workers’ Compensation Risk from Terror Attacks in California

Reflecting this changing landscape, RMS conducted a terrorism risk study for the Workers’ Compensation Insurance Rating Bureau of California (WCIRB). The WCIRB is an unincorporated, private, non-profit association comprised of all companies licensed to transact workers’ compensation insurance in California and has over 400 member companies.

This study has received considerable market recognition, following our previous successful engagement to provide California earthquake risk assessment.

The objective of our study was to estimate California’s workers’ compensation losses to be retained by insurers due to terrorist acts, under TRIPRA for calendar year 2019. Please find a link to the study here.

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Insuring Against Failure: The Terrorist Threat to Australia

This is a reprint of an article originally published in Insurance News. For the original article, click here.

Australia, along with New Zealand, is part of the formidable Five Eyes Alliance with the intelligence forces of the U.K., U.S. and Canada.

With a massive annual budget of US$100 billion (AUD$138 billion), this is the most effective and intrusive intelligence cooperative in the world, capable of smashing terrorist cells and interdicting complex terrorist plots.

The price of security is not just financial; there is also a cost in loss of privacy. At a recent Five Eyes ministerial meeting on Australia’s Gold Coast, a statement was issued warning that privacy is not absolute, and tech companies must give law enforcement access to encrypted data.

Credible intelligence assessed by Australian security agencies indicates individuals or groups continue to possess the intent and capability to conduct a terrorist attack in Australia. On a five-grade scale, the current threat level is three: probable. The higher grades are “expected” and “certain”. By comparison, the U.K. threat level is one notch higher at grade four.

Everyone has their own social network. For terrorists, interaction with their social network is needed for motivation and gaining the tradecraft for terrorist operations. However, the more communication there is between cell members, the greater the chance that counter-terrorism surveillance will close in. Too many terrorists spoil the plot.

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Mapping 500 Trillion Dollars of Insured Exposure

RMS has just completed a two-year exercise documenting all the different types of insurance that are available in the market and a classification system for all the assets that they protect. This is published as a data definitions document v1.0 as a standardized schema for insurance companies to have a consistent method of evaluating their exposure.

This project, in collaboration with research partners Centre for Risk Studies at University of Cambridge, and a steering committee of RMS clients, involved extensive interviews with 130 industry specialists and consultation with 38 insurance, analyst, and modeling organizations.

The project will enable insurance companies to monitor and report their exposure across many different classes of insurance, which globally today covers an estimated US$554 trillion of total insured value. The data standard will improve interchanges of data between market players to refine risk transfer to reinsurers and other risk partners, reporting to regulators, and exchanging information for risk co-share, delegated authority, and bordereau activities.

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Downward Counterfactual of the Seattle Suicide Pilot Crash

When hazard events occur, substantial resources are often committed to find out what happened, and investigate the factors that led up to them. Rarely is there a systematic investigation of downward counterfactuals, addressing the question: how could the loss consequences have been more severe?

On October 31, 1999, an Egyptian pilot, Gameel Al-Batouti, deliberately crashed EgyptAir 990 into the Atlantic, en route from JFK to Cairo. Batouti had waited to be alone in the cockpit of the Boeing 767, and had intentionally manouvered the airplane to its destruction, switching off the engines. His last words, repeated several times, were, ‘I trust in Allah’.

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Terrorism Modeling: The Challenges of Keeping One Step Ahead

A version of this article was published by Insurance Day

Terrorism is asymmetric warfare, and terrorism risk analysis entails knowing not only what has occurred in past terrorist campaigns, but also everything that could have occurred. Carl von Clausewitz, the foremost Prussian military theorist, insisted that perfecting the art of warfare entailed knowing not only what had occurred in previous wars, but also everything that could have occurred. The catalog of successful terrorist attacks is only a small subset of the much longer list of terrorist plots, most of which have been interdicted through the diligent surveillance and pre-emptive action of the counter-terrorism forces.

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RMS: Working for the Good of the Game

On November 13, 2015, the multiple terrorist attacks on Paris began with a suicide bomb blast at the 81,000 capacity Stade de France soccer stadium, where France were playing Germany in an international friendly. Soccer is the world’s most popular game, and terrorism is the language of being noticed. When France hosted the FIFA World Cup in 1998, Algerian terrorists planned to attack the opening match in Marseille between England and Tunisia, and follow-up by attacking the U.S. soccer team in their Paris hotel. Fortunately, a mole inside the Algerian terrorist organization passed on intelligence to the French security service, and the plot was disrupted.

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Terrorism Insurance Market: A Mature Approach to Growth

We were delighted to welcome so many representatives of the insurance industry to the RMS Terrorism Risk seminar in New York last month. Our seminar gave us a chance to update (re)insurance risk management professionals on the latest trends in global terrorism threat, its relevance to the insurance industry, and to share some of the latest developments and approaches for managing terrorism risk. Our keynote speakers included Bruce Hoffman from Georgetown University; Jack Riley, Vice President of the National Security Research Division at RAND Corporation, and Steven Simon from Amherst College.

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Terror in Manhattan

After Faizal Shahzad was arrested on May 1, 2010, for attempting to detonate a vehicle bomb in Times Square, Mayor Bloomberg commented, “It’s been said that when you find a terrorist, he’ll have a map of New York City in his back pocket.” A few blocks from Times Square is the Port Authority Bus Terminal, where a pipe bomb explosion occurred at 7.20 a.m. local time on Monday, December 11, 2017, in an underground passage, about 200 feet (60 meters) from the bus terminal.

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Reimagining the WannaCry Cyberattack

On Thursday April 6, 2017, President Trump ordered a Tomahawk missile attack on a Syrian military airfield. This was a direct response to President Assad’s use of sarin gas to attack Syrian dissidents. Just two days later, the password to an encrypted archive of cyber weapons (stolen from the U.S. National Security Agency) was posted by the so-called Shadow Brokers cyber group. This hacking group is thought to have connections with Russia, which is the leading supporter of the Assad regime. They were angered by President Trump’s action.

An immediate beneficiary of this password release was the Lazarus Group, linked with North Korea, which had been launching ransomware attacks at targets over the previous several months. What they lacked was an effective tool to propagate their ransomware from computer to computer. This missing tool, a Microsoft Windows bug called “EternalBlue”, they now were gifted thanks to Shadow Brokers.

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