Can companies keep up with the changing terrorism threat?

19 August 2016

Terrorism attacks in Europe now cause more loss of life and economic damage than traditional property damage. Are companies prepared?

Not if, but when. Eight out of ten (82 per cent) people in the UK expect a terrorist attack in the UK in the next 12 months, according to a survey in April by BMG Research. 

For the prospects over the next five years, that rises to almost nine in ten (87 per cent). 

This accords with expert opinion. An open letter in April signed by two former Metropolitan Police Commissioners, its former Head of Counter Terrorism, and a former Home Secretary warned that recent attacks on Brussels and Paris were a “wake up call” for others

The UK’s threat level set by its intelligence service MI5 has been “severe” since August 2014. 

The UK has escaped a mass terrorist attack since the London bombings in July 2005. Mainland Europe has been less fortunate. In a statement released in January, following the November 2015 shootings and bombings in Paris, EU law enforcement agency Europol noted: “Europe is currently facing the most significant terrorist threat in over 10 years.” That was before March’s bombings of Brussels Airport and the Maalbeek metro station.

Global threat

The terrorism threat is changing. As Europol noted, the Paris attacks signalled a significant shift in the strategy of Islamic State (IS) – which was previously focused on gaining and retaining territory in Iraq and Syria – a “shift towards a broader strategy of IS going global”. 

Analysis by CNN journalists in March shows that since declaring a caliphate in June 2014 IS has been, directly or as an inspiration, responsible for more than 70 attacks in 20 countries outside Iraq and Syria. Many have been in the Middle East and North Africa, but Europe and the North America have also been frequent targets. 

For example, the man responsible for the Orlando nightclub shooting in June – the deadliest incident of violence against LGBT people in US history, and the deadliest US terrorist attack since 9/11 – had ‘pledged allegiance to IS’ (although the CIA said that it had not been “able to uncover any link” between the shooter and IS).

There is little reason to expect this to change, says Andy Taylor-Preston, Senior Consultant, Credit, Political and Security Risk at JLT Specialty. “Globally the number of terrorism-related attacks continues at an alarming pace. 

“In the past 12 months there have been numerous attacks across Africa and Asia along with four attacks in the United States – San Bernadino in December 2015, Dallas in May 2015, Chattanooga in July 2015, and Orlando in June 2016.” 

Changing threat

The UK and various other European countries have experience of sustained bombing campaigns that claimed lives, but were principally targeted at property and infrastructure to disrupt economic activity. 

The 1993 IRA Bishopsgate bomb in London that resulted in insurance payouts of $1.2 billion (the biggest terrorism loss apart from September 11, 2001), for example, killed one person. The Brussels bombings and Paris attacks claimed 32 and 130 victims, respectively. 

Raj Rana, Head of War and Terrorism at JLT Specialty, says: “Paris and Brussels highlight the changing nature of the threat. While there was significant property damage, you now have to account for the loss of life as well.”

The threat is also no longer focused on exclusively high-profile targets or spectacular attacks such as 9/11. As the Paris attacks and the Orlando nightclub shooting demonstrated, local cafés, bars, clubs and small music venues, could be targeted. Similarly, the San Bernardino mass shooting in California in December 2015 targeted a relatively obscure county Department of Public Health training event.

High-profile attacks

High-profile attacks still remain a real possibility. In March, Metropolitan Police Assistant Commissioner Mark Rowley warned the UK faced “enormous and spectacular attacks”; in November Belgian police discovered that the terror cell responsible for the Paris attacks had videoed an official at nuclear research sites.

While the terrorism threat has spread, traditional targets continue to see attacks. Days after the Belgium bombings, a Taliban suicide bomber killed 70 in Lahore, Pakistan. 

In fact, the Global Terrorism Database, which tracks terrorist incidents, the only European country to make the top 20 for the number of attacks between 2010 and 2014 is the UK – mostly as a result of attacks in Northern Ireland. Only 2.6 per cent of all terrorist deaths since 2000 have been in the West, according to the Institute for Economics & Peace.

For companies such as telecommunications provider VimpelCom, headquartered in Amsterdam, but with operations in (among others) Algeria, Pakistan, Bangladesh and the Ukraine, attacks in France and Belgium have done relatively little to change things. 

“We’ve not altered our approach because basically we are in areas where the risk is more the norm than the exception anyway, but it does keep the organisation alert for any unexpected political violence acts,” says Peter Den Dekker, Insurance and Risk Manager at VimpelCom.

Growing threat

Overall, the terrorism risk has grown and spread. The Global Terrorism Database shows a substantial rise overall in every metric over the last decade: the number of terrorist attacks; the number of fatalities; and the economic costs. 

“It’s not as if there is anyone particularly orchestrating this,” says Aleck Burrell, Head of Crisis and Security Consulting at NYA International, which provides advice on risks of terrorism, war and political violence. 

“It is a hydra. Just because there’s a number of attacks popping up in Europe, it doesn’t mean it has shifted away from elsewhere,” says Burrell.

Trying to predict where the next attack will occur is an impossible task. And the type of attack can be as challenging to predict as the location, as indicated by the attack during the Bastille Day celebrations in Nice, where a lorry smashed into a crowd, killing at least 84 people.

But it seems there is now an acceptance by many that Europe may continue to experience more incidents. 

Regardless of country exposures, organisations need to be prepared for the threat to continue evolving. It’s therefore vital they monitor trends and regularly review their risk management and insurance policies to ensure they continue to provide the upmost protection.

Recent Terror attacks in Europe, the US and Australia

  • Istanbul's Ataturk airport bomb attack (June 2016): Killed at least 42; injured at least 239
  • Orlando nightclub shooting (June 2016): killed 49; injured at least 53
  • Brussels bombings of the airport and underground (March 2016): Killed 32; injured 330
  • San Bernardino, California shootings (December 2015): Killed 14; injured 22 
  • Paris bombings and shootings (November 2015): Killed 130; injured 368
  • Copenhagen shootings (February 2015): Killed 2; wounded 5
  • Paris Charlie Hebdo shootings and subsequent attacks (January 2015): Killed 17; injured 22
  • Sydney siege at Lindt chocolate café (December 2014): Killed 2; injured 4
  • Brussels Jewish Museum shooting (May 2014): Killed 4

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For further information, please contact Andy Taylor-Preston, Consultant, Credit, Political and Security Risk on +44 20 7886 5424 or email andy_taylor-preston@jltgroup.com

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