Impact Forecasting unveils new terrorist risk approach

Impact Forecasting has applied a new approach to provide a more realistic understanding of the potential range of losses from a terrorist attack.

The new approach breaks from traditional blast radius modelling by taking into account a number of nuances that are absent in current blast analysis that can have a substantial impact on the losses.

According to Impact Forecasting, their terrorism risk experts utilise computational fluid dynamics (CFD) software developed over many years in conjunction with the US military and government to define an explosion and how it moves within a 3D urban environment.

This approach is used by the New York Police Department and federal security agencies to plan preparedness, resilience and surveillance strategies with regards to terrorist attacks.

Mark Lynch, who leads political risk model development at Impact Forecasting, said: “As insurers look to grow their books of business, this tool will help them manage risk more strategically providing important insight for underwriters, reinsurance buyers and exposure managers.

“Most encouragingly, we can now apply CFD analysis to any city across the world upon client request, quantifying the effect of location and blast size uncertainties to highlight the variation of the possible impacts.”