IIC.Terrorism Flashcards
How has terrorism changed in recent years? (WHO is attacking)
The perpetrators of attacks have transitioned from organized terror groups (e.g.: al-Qaeda) to lone actors that have been inspired or radicalized by organized groups.
How has terrorism changed in recent years? (Means of Attack)
The means of attacks have transition from large scale bombings to armed attacks (use of personal weapons (knives and guns), vehicles, and smaller bombs in some cases).
How has terrorism changed in recent years? (Targets of attack)
The targets of attacks have transitioned from state targets (police, military or government) to civilian targets in streets, shops, or concert venues.
How have the shifts in target of terrorist attacks changed the type of damage inflicted?
- Property damage is lower than before
- Casualties and Suffering may be higher
- Indirect costs to business (i.e.: business interruption)
RECALL: what was the original purpose of TRIA? (3)
- Ensure availability and affordability of private coverage
- Give private markets time to stabilize
- Build capacity of absorb future losses
RECALL: briefly describe the U.S. government terrorism program TRIPRA. (3)
- Requires that insurers offer commercial P&C terrorism coverage for certified acts of terrorism
- Costs are borne privately up to a certain level, then the government steps in a reinsurer
- Certain conditions are required before coverage is triggered under TRIPRA
RECALL: what are the triggers for coverage under TRIPRA? (3)
- the act must satisfy the definition of terrorism (not covered in reading)
- the act must be certified by various government bodies
- losses must exceed a specific monetary threshold
What broad purchase options are available for terrorism coverage in Canada? (2)
- can be first or third party exposures
- can be a standalone terrorism insurance or an endorsement to a property policy
What are the benefits of a standalone terrorism policy? (4)
- higher limits
- specific limits for separate locations (some locations may be more prone to attacks than others)
- multi-year coverage
- business interruption can be included
What are some possible benefit enhancements to basic terrorism coverage? (6) (hint: BEPARN)
- Business interruption
- Event cancellation
- Political violence (e.g.: G20 protests in Toronto in 2010)
- Active assailant situations
- Reservation cancellation
- Nuclear, chemical, biological, radiological terrorism
In general, how is terrorism insurance priced?
Generally, a % of the property premium.
How has assessing terrorism risk become more challenging in recent years?
- it is easier than ever for a lone actor to commit acts of terrorism (can happen anywhere, at anytime)
- the spectrum of impacts has expanded (not only 9/11 style of attacks, but also vehicles driven onto a sidewalk which just about anyone can do)
Identify considerations for assessing terrorism risk to a business. (4)
- attractiveness of location as target (# of people/employees, profile of business)
- accessibility of location (security, # of entry points)
- financial impact (risk to assets, business interruption)
- crisis management framework:
- are threats investigated?
- are there evacuation procedures?
- is there post event counselling?
Identify a similarity between assessing Terrorism and Earthquake risk.
Both use models to determine a PML (Probable Maximum Loss).