Global Terrorist Attacks
The increasingly diverse and dispersed threat has seen worldwide terrorist activity rise in recent years. The number of global terrorist attacks peaked at more than 14,400 in 2006 (see Figure 1). Although there has been a slight dip in the number of attacks over the last five years, they remain at historically high levels. Attacks increased dramatically in Afghanistan and Iraq following the deployment of coalition combat troops. Several other countries have also witnessed a big jump in terrorist activity recently, including Pakistan, Yemen and Somalia.
Although developed countries have suffered relatively few major terrorist attacks over the last 20 years, the human and economic impact has been devastating for the communities that have been hit. Table 1 shows the terrorist attacks that have incurred the biggest insured losses since 1990.
Unlike the case for other perils, (re)insurers struggle to quantify the risk posed by terrorism due to its unpredictable nature. The human element means the nature of the threat is forever changing as groups relocate and adapt their tactics in response to counter-terrorism measures. However, there are some steps (re)insurers can take to improve their risk awareness.
Monitoring world events and the location and number of foiled attacks can help (re)insurers understand the risk, and
companies are increasingly using services and expert advice to stay abreast of developments. Maplecroft, an organization that assesses global risks for companies and investors, updated its Terrorism Risk Index (TRI) in November 2010, revealing the countries most at risk from terrorist attacks. The results are displayed in Figure 2.
Figure 2: Maplecroft Terrorism Risk Index
Source: Maplecroft. Please contact Maplecroft at email@example.com for the full Terrorism Risk Index
According to the TRI, Somalia replaced Iraq as the country most at risk from terrorism after it suffered 556 attacks between June 2009 and June 2010, in which 1,437 people were killed and 3,408 wounded. The principal threat in Somalia comes from al-Shabab, an Islamist insurgent group, which has claimed responsibility for several deadly bombings in the country. Pakistan, Iraq, Afghanistan, the Palestinian Occupied Territory, Colombia, Thailand, Philippines, Yemen and Russia are also rated as extreme risk nations, respectively in the top 10. Lebanon, Sudan, Democratic Republic of Congo, Israel, India and the Central African Republic complete the top 16.
No major Western country falls within the extreme risk bracket, but Greece and Spain are rated as high risk countries, 24th and 27th, respectively. According to the index, Greece is the European country most at risk from terrorist attacks, after experiencing 180 attacks between June 2009 and June 2010. Iran and Turkey are also in the high risk category. Meanwhile, the United States, France, the United Kingdom and Saudi Arabia are considered medium risk. Countries rated at low risk include China, Canada, Germany, Australia, Italy, South Africa and Japan.