Category Archives: Terrorism Risk

The Death Of Abu Bakr al-Baghdadi: Implications for the Global Terrorism Risk Landscape

The death of Abu Bakr al-Baghdadi is a significant blow to the global salafi-jihadist movement. Since al-Baghdadi declared himself caliph of IS in the summer of 2014, his name has been used to lure new recruits and to help coalesce the myriad of salafi-jihadist groups to a common cause of forming a caliphate. The vision of a caliphate bestowed power and legitimacy to al-Baghdadi’s cause, inspired online masses, and drew an unprecedented number of foreign fighters all across the globe into its ranks. But al-Baghdadi’s death together with the demise of the caliph, has adversely impacted their cause and makes it more difficult for followers to be inspired to join their movement. 

While al-Baghdadi’s death will adversely affect the ideological narrative within the global salafist movement, this does not quell the threat from IS and their associated groups for three primary reasons. First, al-Baghdadi’s death will not impact the core operations of IS. Given that he has been in hiding for many years now, command and control of IS fighters and the group’s affiliates have not been directly dependent on him for their ongoing undertakings. Core leaders of IS still remain operational and while military pressure on IS has made analysis of its leadership challenging, most counter terrorism experts agree that there is a succession plan to put a new leader in place.

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Re-evaluating TRIA

At this year’s RMS Terrorism Risk Summit, we focused attention on the U.S. landscape. The main issue these days in terrorism insurance discussions relates to the Terrorism Risk Insurance Protection and Reauthorization Act (TRIPRA), which will expire at the end of December 2020 if not reauthorized. This important legislation is also known by other acronyms including TRIA (Terrorism Risk Insurance Act) and TRIP (Terrorism Risk Insurance Program). In discussing the U.S. federal backstop for certified acts of terrorism, all these names are synonymous.

To help make sense of the speculation and various policy options, RMS was proud to host Scott Williamson, Vice President and Director of Financial Analytics at the Reinsurance Association of America (RAA). Mr. Williamson has developed legislative models to assist the RAA in its advocacy on issues such as TRIA.  

At the RMS event, Mr. Williamson provided an overview of the current TRIA structure and explored some alternative modifications to the program that were considered to make a legislative recommendation. This included an evaluation of multiple ‘what-if’ scenarios, using a range of attack modes and targets, and various assumptions regarding the compounded average growth rate of the U.S. economy. For this study, RMS partnered with RAA to estimate economic losses due to a range of scenario terrorism events for property and workers’ compensation lines of businesses, using its latest Terrorism Model and Economic Exposure Data.  

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Managing the Multifaceted Terrorism Threat: RMS Terrorism Risk Summit 2019

Despite the paucity of large-scale terrorism attacks in North America, the multifaceted terrorism threat in the U.S. continues to be a significant one that must be managed by the (re)insurance risk management industry, according to experts at this year’s RMS Terrorism Risk Summit. 

The theme for this year’s summit, held in New York on September 25, focused on the multifaceted terrorism threat landscape in the U.S. and how the peril can be managed by the insurance industry. While terrorism insurance take-up rates remain healthy, and the U.S. Government Terrorism Risk Insurance Program (TRIP) backstop offers reassurance in the event of a large-scale attack, the uncertainty around TRIP’s pending renewal at the end of 2020 and the fluid threat environment have given (re)insurers some pause for thought. 

The invited speakers for this year‘s summit included Ambassador Dan Benjamin, director of The John Sloan Dickey Center at Dartmouth University, Steven Simon, professor of security studies at Colby College and Scott Williamson, vice president and director of Financial Analytics at Reinsurance Association of America (RAA). 

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Terrorism in El Paso

Terrorism is a global menace that spreads like a virus along social networks. On March 15, 2019, Brenton Tarrant killed 51 Muslims attending Friday prayers at two mosques in Christchurch, New Zealand. Terrorism is the language of being noticed. Shortly before his rampage, he emailed his white supremacist manifesto, The Great Replacement, to the New Zealand Prime Minister’s office and media outlets, and shared a link with 8chan, a counter-culture website associated with political extremism.

Ever since the Christchurch mass shooting, 8chan users have commented regularly on their desire to beat Tarrant’s high score of victims. On Saturday, August 3, 2019, 21-year-old Patrick Crusius posted a four-page document, The Inconvenient Truth, on 8chan, which has since gone offline.  

This expressed support for the Christchurch shootings, and blamed immigrants and first-generation Americans for taking away jobs. He also called for the deportation of immigrants. Such a white supremacist tirade is not unusual on 8chan. However, shortly after this posting, he headed for the Walmart near the Cielo Vista Mall, El Paso, Texas, and opened fire in the parking lot and store with an assault rifle. Mid-morning on Saturday, Walmart was busy with shoppers. His twenty-minute shooting spree left 20 dead with 26 people hospitalized. He then surrendered to police officers. 

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London Bridge Terrorism Inquests: A Counterfactual Risk Perspective

The inquests into the deaths of eight individuals killed in a terrorist attack on London Bridge and in Borough Market on June 3, 2017, were held at the Central Criminal Court, Old Bailey, London, two years later – from May 7 to June 28, 2019. Judge Mark Lucraft, the Chief Coroner for England and Wales, concluded that the eight victims were unlawfully killed, but he was not convinced that MI5 and the police missed any opportunities that would have prevented the attack.

Three Islamist terrorists, Khuram Butt, Rachid Redouane, and Youssef Zaghba, rammed pedestrians on London Bridge, before launching a frenzied knife rampage around nearby Borough Market, a lively food market and tourist hotspot that attracts 4.5 million visitors per year. The three attackers were shot dead by police at 10.17 p.m., less than 10 minutes after the rampage began.

Although the Chief Coroner did not criticize MI5 and the police in his conclusions, he did criticize the lack of security barriers on the bridge, and concluded that this showed weaknesses in systems for assessing the need for such measures, and implementing them promptly. The attack happened only two-and-a-half months after the Westminster Bridge vehicle ramming attack on March 22, 2017.

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Cyber and the War Exclusion

In 1915, Cuthbert Heath – pioneer of catastrophe insurance at Lloyds of London, decided to offer insurance policies to cover the impacts of war, far from the front line. Zeppelin airships were arriving over London during World War One, dropping bombs and incendiary devices. Later in the War, the bombs were being thrown out of Gotha biplanes.

Heath did some simple calculations: the number of Zeppelins, the frequency of attacks, the number of bombs each airship could carry, the damage area of an explosion, and how much of London was built up compared to open spaces. Having generated a risk cost estimate, he then multiplied it by six to arrive at his proposed rate for the insurance coverage. As the intensity of air attacks went up and down so his insurance prices followed.

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Understanding the Terror Attacks in Sri Lanka

A decade ago, an RMS colleague traveling to Bali for a climate change conference sought my advice on where to stay to minimize the risk of falling victim to terrorism. In 2002, some 204 people had been killed in a bomb attack by Islamist militants in Kuta Beach, a busy tourist area in Bali. My advice then, as it is now, was to stay away from luxury hotels. Not just for tourists, but for insurers also, the risk to luxury hotels is far higher than for lesser accommodation.

The basic principles of terrorism risk modeling explain the terrorist preference for luxury hotels and places of worship, both of which were targeted in a coordinated terrorist attack in Sri Lanka on Easter Sunday (April 21), which with a current death toll of 290, has nearly killed half as many more people than the Bali bombing.

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LockerGoga Cyberattack on Norsk Hydro

On Monday, March 18, 2019, Norsk Hydro, one of the world’s largest aluminum producers, announced the replacement of its CEO, who had left the company through early retirement. This followed admissions that the company was responsible for a massive environmental spillage of bauxite residues at its plants in north-eastern Brazil in February 2018. As a result, a government-imposed shutdown of some of Norsk Hydro’s operations had seen aluminum production at its Alunorte refinery cut to just 50 percent of its capacity.

Late that same evening, the company’s IT team became alerted of a major cyberattack. At a press conference the following morning, it was the CFO rather than CEO who disclosed that IT systems in most Norsk Hydro business areas were impacted, including the digital systems at its smelting plants. Apart from switching to manual operations at its smelting plants, several metal extrusion plants had to be shut down. Acting resiliently to avoid infection from one plant to another, Norsk Hydro quickly isolated its plants.

Alunorte alumina refinery, Barcarena, Pará, Brazil. Image credit: Flickr/Amazônia Real

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Comprehending America’s Far Right Terror Groups

A surge in right wing populism, rooted by the effects of globalization has energized a series of extreme right political movements across the world. Many such groups have resorted to acts of terrorism violence to express their objectives. Some have even committed mass shooting events such as the recent tragic events in Christchurch, New Zealand.

Unfortunately, the United States has not been an exception to this trend. According to the University of Maryland’s Global Terrorism Database, right wing inspired terrorist acts in the U.S. have grown from six percent to 35 percent from 2010 to 2016. The Center for Strategic and International Studies (CSIS) also reported that between 2016 and 2017, right wing inspired violence had also quadrupled in the U.S. – a terrifying trend. This blog will attempt to address this threat of far-right terror groups in the U.S.

The threat from far-right terrorism in U.S. is not a monolithic one. While it is true that far-right terrorism is very vibrant and structurally diverse, the groups do still fall under two categories: White supremacist and anti-government extremists.

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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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