Category Archives: Terrorism Risk

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

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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Crossing the Terrorism Casualty Protection Gap

This blog was first published as an article in Insurance Day

The victims of the Las Vegas shooter Stephen Paddock, the injured and the dependents of the 57 who died have one comfort following their tragic predicament. Their vicious and indiscriminate attacker (whose reported comments get the attack classified as “domestic terrorism”) chose to fire at the 20,000-plus crowd attending the Route 91 Harvest music festival from the 32nd floor of the Mandalay Hotel, part of the MGM chain with a US$735 million liability insurance coverage. As a result (reflecting in part the “moral hazard” of insurance limits), the victims will receive the distribution (after substantial lawyers’ fees) of a near-US$800 million settlement.

In the lead-up to the attack on October 1, 2017, Paddock had researched renting a high-rise condo in Las Vegas and also explored the crowd numbers on the beach at Santa Monica and considered other festivals to target in Boston and Chicago. If he had chosen to shoot from a residential building or clifftop, to the same effect, the only compensation the victims could have expected would have been the US$11 million raised in a public appeal after the shooting: equal to around US$200,000 for each of those who died. As it is, their compensation should work out 30 times more generous.

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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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