Posts Tagged ‘terror’
Modeling methodologies for terrorism have been continually refined and updated since the three major modeling companies - AIR Worldwide (AIR), EQECAT and Risk Management Solutions (RMS) - released their first terrorism models in 2002. Quantifying the economic, insured and human losses from a terrorist attack continues to pose major challenges for (re)insurers and alternative capacity providers. There are three main techniques to model terrorism risk:
Some may question why terrorism risk has a place in a document dedicated to emerging risk. Terrorism as a form of violence to promote cause or promote change is one of the original human conflicts. The wind blows and the earth shakes much the same way now as it has for hundreds, thousands of years. However, terrorism as a risk and a peril has evolved over the years and is a current concern in all parts of the world. Given the growing population, regional conflicts producing a broad list of potential instigators, the expansive reach of social media for extremists spreading their messages and recruiting and the diversity of possible attack modes to cause human and economic loss, terrorism does qualify as an emerging risk. With this contemporaneity in mind, we will discuss terrorism as an example of an emerging risk that is being aggravated by changes in geo-political events and in the continued notable challenges in modeling its ever changing underlying complexities.
Cyber-attacks and Terrorism Revealed as Top Emerging Risks for 2015, According to Annual Guy Carpenter Survey
Cyber-attacks and terrorism are ranked among the top emerging risks concerning the (re)insurance industry in the year ahead, according to a survey released today by Guy Carpenter. According to the findings, new products, expansion into new geographic markets and access to new distribution channels will be the primary drivers of profitable growth in 2015.
Cyber insurance has grown out of recognition that cyber-crime and data privacy are among the most concerning risks facing organizations today. With the increasing severity and frequency of cyber-attacks and data breaches worldwide, the demand for cyber-specific insurance is growing. Cyber-related risk to critical infrastructure and the overlap with cyber-terrorism are also issues that have come to the forefront.
(Re)insurers today face a degree of change and uncertainty that appears to be evolving at an ever quickening pace. Guy Carpenter has published a report, Ahead of the Curve: Understanding Emerging Risks, highlighting emerging risks facing the (re)insurance sector, including cyber-attacks, terrorism and new compensation structures for long-term bodily injuries. The report seeks to identify and categorize these risks that are now confronting the sector, as well as analyze their implications on businesses and (re)insurers.