Seven years after 9/11, the threat of a terrorist attack remains a real possibility as Jihadist movements regroup, expand and continue to plan new ways of destroying high-profile Western targets, insurance modelers and risk management experts contend.
Indeed, while the public's view of terrorism in the United States may have diminished, the threat remains, Andrew Coburn, vice president of catastrophe research and director of terrorism research for Risk Management Solutions, told National Underwriter in a recent interview.
"The threat of terrorism has not gone away," he reiterated.
Mr. Coburn was one of four experts assessing the exposures insurers and risk managers face during the recent annual terrorism seminar in New York City sponsored by the catastrophe modeling firm, Newark, Calif.-based RMS.
Insurers need to take the long view of terrorism risk, according to Gordon Woo, a catastrophe risk consultant for RMS and chief architect for the RMS terrorism model.
He used the United Kingdom's battle with the Irish Republican Army as an example. He noted that the terrorism campaign began in the 1970s and did not end until 2000, after the populace turned its back on the IRA and no longer supported armed struggle and violence.
He quoted a British official specializing in terrorism that it would be realistic to believe the struggle with al Qaida and Muslim Jihadists will last 50 years or longer.
The experts said the only way to defeat the rise in terrorism is through a combination of continued counterterrorism measures and programs aimed at de-radicalizing followers in the Mideast, Asia and Africa.
Winning over the populace, noted Mr. Woo, would not only be an effective way of ending the war with the Jihadists, but would also be good news for underwriters as well.
"The war on terror needs to be fought on our own doorsteps and at their homes, to be able to get across to a new generation of young Muslims that it is not cool to be a suicide bomber, on hopes that this will be a message that will help insurers manage [their risks] more comfortably over the coming years," said Mr. Woo.
Discussing terrorism modeling with NU, Mr. Coburn explained that over the past seven years the models have developed more validity through the accumulation of evidence from close to 20,000 terrorism events, both large and small over that period.
"The past seven years have been the most violent in history–an extraordinary time" said Mr. Coburn.
Today's models show greater probability of events in locations and the extent of damage that can be inflicted from a terrorism event, he added, pointing out that the models do not predict events but allow insurers to better understand their exposures and help them to control those risks.
Terrorism risk exposes insurers to extreme severity losses, and the current models allow them "not to bet the whole business" on any one event, he added.
While the United States has what he terms the best counterterrorism programs in the world, carriers "cover the failures of counterterrorism, and that is pretty serious for insurers."
In the seven years since the 9/11 attacks, instead of al Qaida diminishing as a movement, it has only grown to include a broader audience of followers, according to Rohan Gunaratna, director of the international center for political violence and terrorism research at the S. Rajaratnam School of International Studies in Sinapore.
The war in Iraq has inflamed many into believing that attacks upon Western interests are necessary, he said.
Adding to the ability of al Qaida to regroup and reestablish itself is the relative safe haven it now enjoys in the border areas of Pakistan, he noted. He said the terrorist network has rebuilt its abilities to train and disseminate propaganda about its cause, while also developing a leadership structure that can quickly replace those who are captured or killed.
He said that contrary to media reports, the Pakistani army has been conducting a military campaign against al Qaida in very difficult terrain that has claimed more than 3,000 casualties in the Pakistani Army, either killed or wounded.
Bruce Hoffman, a professor in security studies at the school of foreign service at Georgetown University in Washington, called talk of al Qaida's demise "premature and exaggerated," adding that it is "far too soon to say al Qaida is finished."
While many plots have been uncovered and stopped, it is not a time for celebration, but a warning that the organization is still seeking to perpetrate another successful attack, according to Mr. Hoffman. What al Qaida has shown continuously is that it will "go back again and again until it is successful" in reaching its target, he added.
"Too often, we only pay attention to the successful attacks and forget about the failed ones," said Mr. Hoffman.
The experts noted that in the past seven years, there have been more than 30 plots uncovered or foiled in the United States alone, and close to 100 internationally, underscoring al Qaida's persistence.
Mr. Hoffman noted two dates that should draw added attention from risk managers in government and the private sector: Nov. 4, which is Election Day; and Jan. 20, 2009, the inauguration of the new president of the United States.
He said the group has often tried to influence the U.S. election in the past with either video or an attack on or near that date. Mr. Hoffman said that if there is no incident on Election Day, he believes al Qaida will "attempt to do something" on Inauguration Day.
Both Mr. Gunaratna and Mr. Hoffman said terrorists continue to try to obtain some form of weapon of mass destruction–nuclear, biological, radiological or chemical.. They said that while terroists would like to inflict mass destruction, they understand that the psychological effect of unleashing such an event could be just as devastating.
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