December 12th, 2012

Global Terrorist Attacks

Posted at 1:00 AM ET

David Flandro, Global Head of Business Intelligence, Julian Alovisi, Assistant Vice President, Lucy Dalimonte, Senior Vice President, Ellen Rieder, Managing Director and Emma Karhan, Senior Vice President
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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 general decline in the number of attacks over the last five years, they remain at historically high levels.

Figure 1

figure-1-terror

Countries Most at Risk from Terrorism

Unlike some 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 better understand the risk. Companies should stay abreast of these developments to assess the risk of doing business in certain countries. As discussed earlier in earlier posts, Somalia and Yemen are both vulnerable to terrorism due to the presence of al-Shabab and AQAP. Other countries that face high terrorism activity include Afghanistan, Iraq, Israel, Pakistan and Palestinian Territories. Although countries such as these face extreme terrorism risks, the threat extends beyond these areas. Indeed, as described below, the recent unrest in the Middle East and North Africa has led to increased terrorism risks in countries such as Syria and Libya. In addition, although there is a reduced terrorist threat in Europe and the United States, groups are likely to continue to pursue attacks in Western countries for some time to come.

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