IIC.Terrorism Flashcards

1
Q

How has terrorism changed in recent years? (WHO is attacking)

A

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.

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2
Q

How has terrorism changed in recent years? (Means of Attack)

A

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).

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3
Q

How has terrorism changed in recent years? (Targets of attack)

A

The targets of attacks have transitioned from state targets (police, military or government) to civilian targets in streets, shops, or concert venues.

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4
Q

How have the shifts in target of terrorist attacks changed the type of damage inflicted?

A
  • Property damage is lower than before
  • Casualties and Suffering may be higher
  • Indirect costs to business (i.e.: business interruption)
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5
Q

RECALL: what was the original purpose of TRIA? (3)

A
  • Ensure availability and affordability of private coverage
  • Give private markets time to stabilize
  • Build capacity of absorb future losses
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6
Q

RECALL: briefly describe the U.S. government terrorism program TRIPRA. (3)

A
  • 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
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7
Q

RECALL: what are the triggers for coverage under TRIPRA? (3)

A
  • 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
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8
Q

What broad purchase options are available for terrorism coverage in Canada? (2)

A
  • can be first or third party exposures

- can be a standalone terrorism insurance or an endorsement to a property policy

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9
Q

What are the benefits of a standalone terrorism policy? (4)

A
  • 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
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10
Q

What are some possible benefit enhancements to basic terrorism coverage? (6) (hint: BEPARN)

A
  • Business interruption
  • Event cancellation
  • Political violence (e.g.: G20 protests in Toronto in 2010)
  • Active assailant situations
  • Reservation cancellation
  • Nuclear, chemical, biological, radiological terrorism
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11
Q

In general, how is terrorism insurance priced?

A

Generally, a % of the property premium.

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12
Q

How has assessing terrorism risk become more challenging in recent years?

A
  • 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)
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13
Q

Identify considerations for assessing terrorism risk to a business. (4)

A
  • 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?
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14
Q

Identify a similarity between assessing Terrorism and Earthquake risk.

A

Both use models to determine a PML (Probable Maximum Loss).

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