Threat from Islamist Extremism is unprecedented with industrialisation of terrorism meaning unsophisticated attacks remain highly likely
Latest Pool Re report launches with new quantitative assessment of frequency and severity of terrorism events
Pool Re, the terrorism reinsurance pool, today announces the publication of the latest Terrorism Threat and Mitigation Report. The report analyses recent terrorist attacks as well as outlining and assessing the broad spectrum of terrorist threats faced by the UK and Europe. For the first time, the research also provides a quantitative assessment of terrorism in 2016, analysing the frequency and severity of terrorism events. Further key themes and emerging trends discussed in the report include:
- 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.
- 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.
- 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.
- 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.
- The influence of Islamist extremist magazines on terrorist attack methodology.
- A year on from the murder of Jo Cox MP, the threat from Far-Right extremism continues in the UK.
- The Dissident Republican threat to Great Britain remains SUBSTANTIAL and is unlikely to reduce, although aspirations to carry out an attack may currently exceed capabilities.
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.”
The latest Terrorism Threat and Mitigation Report is available here – Terrorism Threat and Mitigation Report 2017
Contact
Haggie Partners LLP
+44 (0)20 7562 4444
Peter Rigby
peter.rigby@haggie.co.uk
Brian Norris
brian.norris@haggie.co.uk
About Pool Re
The Pool Re scheme was set up in 1993 by the insurance industry in cooperation with the UK Government in the wake of the IRA bombing campaign on the UK Mainland. Pool Re is a mutual reinsurer whose Members comprise the vast majority of insurers and Lloyd’s Syndicates which offer commercial property insurance in the Great Britain, with membership of the scheme affording them a guarantee which ensures that they can provide cover for losses resulting from acts of terrorism, regardless of the scale of the claims.
The scheme, which is recognised as a leading example of public/private partnership, is owned by its Members but is underpinned by a HM Treasury commitment to support Pool Re if ever it has insufficient funds to pay a legitimate claim. Pool Re pays a fee to Government for this guarantee and would repay the money over time if it ever used this facility.
However, in the event of a loss resulting from an act of terrorism, each Member must first pay losses up to a threshold, which is determined individually for that insurer. When losses exceed that threshold, the insurer can claim upon Pool Re’s reserves, which now stand at approximately £6.2billion. These reserves have been accumulated by the Members of Pool Re since its inception. It is only in the event that these reserves and the company’s commercial reinsurance are exhausted that Pool Re would require Government support.
The Pool Re fund has paid out following 13 separate terrorism incidents covering losses of over £600m.
Since March 2015, the Pool Re Scheme’s resilience has been augmented by an external reinsurance placement. This re-engages the global market in aggregated UK terrorism for the first time , and additionally provides protection to both Scheme assets and the UK taxpayer.
Pool Re is also a founding member of the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP). Established in 2016, IFTRIP is aimed at fostering closer ties and allowing for greater collaboration between the world’s terrorism (re)insurance entities. IFTRIP is comprised of national terrorism reinsurance pools from twelve countries.