The notion that terrorism frequency is unknowable is only true in the absence of effective intelligence services. Terrorism modeling is enabling more widely available terrorism coverage. 

- Dr. Gordon Woo, terrorism expert and catastrophist, RMS

Understanding Terrorism Risk:
A Consistent, Measured Approach to Terrorism Exposure Worldwide

For years, the prevailing industry notion has been that terrorism risk is impossible to accurately model. However, large-scale terrorist attacks are not random acts — they involve years of planning, millions of dollars of resources and equipment, and high levels of technical expertise on the part of the terrorists in order to succeed.

Since the release of the first RMS terrorism model in 2002, our methodology has been enhanced and validated. All known terrorist plots or attacks that have occurred since the model’s launch have been consistent with RMS’ approach to probabilistic terrorism risk modeling.

We provide the industry-leading view of terrorism risk with solutions that facilitate effective management, monitoring, and pricing of terrorism exposure worldwide:

  • +Identify the most critical attack scenarios facing a portfolio
  • +Estimate the likelihood of multiple attack events
  • +Calculate key realistic disaster, regulatory, and rating agency scenarios
  • +Utilize high-resolution accumulation management tools quickly and intuitively

Empirically-Driven Frequency

The RMS view of terrorism risk is developed using mathematical methods from a range of sources, including game theory, operational research, and social network analysis, as well as input from highly qualified terrorism experts, to inform a clear view of frequency and likelihood.

Three-Pronged Approach

Our approach to terrorism risk modeling focuses on three critical components: exposure management, scenario loss modeling, and probabilistic loss modeling. This allows for the broadest understanding of terrorism risk, given its uncertain and dynamic nature.

Accumulation Management Tools

The RMS Spider accumulation tool identifies key concentrations of property or human exposure in a chosen radius. It enables portfolio managers to monitor capital allocation in real-time to assist with underwriting and loss benchmarking, rating agency and regulatory support, and portfolio management.