Pool Re publishes first quantitative assessment of terrorism
Pool Re, the UK terrorism reinsurance pool, has published its first quantitative assessment of terrorism in 2016, analysing the frequency and severity of terrorism events in its new Terrorism Threat and Mitigation Report.
The report revealed that Islamist extremists remain the principal threat to the UK. Daesh and al Qaeda (AQ) associates remain the key threat actors and likely targets are crowded places, national infrastructure and police and military institutions and personnel.
It also said that attacks are likely to continue. The methodology of them may be wide ranging and, while the most frequent may be unsophisticated, attacks involving home-made Improvised Explosive Devices (IEDs) should not be discounted.
It also noted that the arrests of three women in London in April, and their suspected involvement in the commission, preparation and instigation of terrorism acts indicate that women may play a greater role in attack planning.
Some of its other conclusions noted the ‘industrialisation of terrorism’ by Daesh, which encourages individuals to use readily available weapons and cause mass casualties rather than inflict damage on infrastructure, is likely to continue.
Julian Enoizi, chief executive, Pool Re said, “This report aims to inform, raise awareness and provide an accessible and expert resource on the evolving terrorist threat. By supplying Pool Re’s Members and by extension their clients across the UK with knowledge and insight, businesses can better protect themselves, their employees and the UK as a whole. A key addition to the latest report is the database of global terrorism incidents.
“Modelling terrorism has always been fraught. The factors which govern frequency and severity are not possible to determine with the same degree of accuracy as other perils. However, this database and the factors which we are now considering in this analysis enables us to work towards creating a more robust terrorism model. This data also illustrates the changing nature of the threat. Islamist extremists are motivated to inflict massive civilian casualties rather than damage to property. This represents a fundamental shift in the types of economic losses experienced.
“The majority of terrorism insurance policies require physical damage to trigger a claim. This creates gaps in insurance coverage as recent terrorist events, whilst they have caused significant loss of life, have also resulted in severe disruption to business, and associated financial losses, but with minimal or no damage to commercial property.
“Another limiting factor to the success of the insurance market in mitigating economic loss is the low level of insurance uptake in the SME sector and outside of London. Pool Re has been working to educate small business and to fill this penetration gap since the attacks in Europe last year.
“Spurred on by the recent spate of UK attacks, intensive talks with both the insurance industry and the Government are under way. Extending Pool Re’s cover requires a change in legislation, albeit minor. Combined with more affordable pricing as well as incentives designed to improve risk management, a change in underlying insurance cover is essential to enable businesses across the UK to better combat today’s threat and to safeguard future investment in our economy.”
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