Power Plants Seen As No. 1 Terror Risk Target
NU Online News Service, March 22, 3:24 p.m. EST?A former war correspondent warned utility risk managers today at an industry symposium in London that power installations are the number one target for terrorists.[@@]
The meeting, organized by global insurance broker Jardine Lloyd Thompson, heard from Kate Adie, formerly with the BBC.
According to a JLT report on the session, Ms. Adie told the power industry risk managers that parliaments and television stations were no longer targets.
Ms. Adie said, "If you want to disrupt a western developed country you don't bomb the Parliament, you don't attack the TV station like you used to 30 years ago?you attack the power supply system. It is absolutely now the bottom line to tear a developed country apart?you attack the power supply.
"It produces in people the most tremendous amount of panic, especially in people who are just not used to living without electricity, light and heat," she added.
Ms. Adie said that power interruption disrupts a huge amount of functions in complex cities "to the extent that ordinary life cannot be carried on literally from that moment on."
Additionally, she noted that a loss of power "produces immense resentment, anger and trouble. It is a perfect way of tearing a society apart."
Ms Adie expressed the view that, "there is only one thing that obsesses the average citizen in southern Iraq and also in Baghdad?the power isn't on for any more than two hours a day, if that. That is the one thing contributing to massive fury and resentment about political matters and particularly the occupying troops."
Rob Drelich, a senior vice president of Swiss Re's Electricity Price Solutions, said that utilities had to weigh up the risk and the cost of insuring against terrorism.
"It's up to the individual buyer of insurance or the individual utility company to choose whether they think that it is an acceptable expenditure, and not everyone opts to buy it," said Mr. Drelich.
He ventured, "In my opinion, if a company has a fairly large, concentrated exposure, they are more likely to buy terrorism coverage. If, on the other hand, a company has scattered or smaller locations in the middle of nowhere, they don't seem to buy it provided the risk is fairly small as well."
Jeff Powell, a Jardine Lloyd Thompson partner, said that major banks financing utility projects abroad insist on terrorism insurance as part of the financing package.
He said: "The international banks share your views on what the major exposures are in Third World countries?sabotage and terrorism. It is right up the list of priorities for them on insurance protection."
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