Newark, Calif.--Responding to increases in the frequency and severity of global terrorist activity in each of the past three years, Risk Management Solutions (RMS), the world's leading provider of products and services for the management of catastrophe risk, today announced the launch of a new suite of tools designed to help insurers and reinsurers manage terrorism risk outside the U.S. The tools include the industry's first Global Terrorism Risk Model, as well as a multi-country expansion of the RMS(R) Terrorism Scenario Model and accumulation management functionality in the company's RiskLink(R) catastrophe management software.
"Over the past two years, we have seen increased adoption of terrorism risk management tools for the U.S. within the insurance industry. Now our clients are looking for analytical tools to more knowledgeably underwrite and manage terrorism risk beyond U.S. borders," said Hemant Shah, RMS president and CEO. "Our new set of tools for global terrorism risk management addresses this need, equipping insurers and reinsurers to assess the risk in essentially any country in the world."
The RMS(R) Global Terrorism Risk Model allows companies to quantify property, business interruption, and casualty risk associated with terrorism for locations in 227 countries. The model takes into account an assessment of local threat groups, the "attractiveness" of a location to terrorists, likely attack modes, and historical terrorism loss in the region. Designed with global underwriters in mind, the tool is easy to use and requires only basic information about the property such as location, type and size of structure, ownership, and number of occupants. The model can be readily updated by the user to account for perceived changes in the terrorism landscape for a given country.
"Terrorism activity outside of the U.S. is of increasing concern to global risk managers and has provided a significant impetus for the development of software to track and measure such exposures," said Russell Fletcher, Chief Underwriting Officer, Montpelier Reinsurance Ltd. "We have found it a growing challenge to deal with the large number of submissions for terrorism insurance from around the world, particularly Europe, Latin America and the Far East, as our terrorism practice has grown. We hail RMS's new global terrorism tools as highly useful in providing critical inputs for making sound underwriting decisions."
The RMS model was developed with input from an advisory group of world-leading authorities on terrorism, including Jane's Information Group; Dr. Rohan Gunaratna, Head of the International Centre for Political Violence and Terrorism Research, Singapore; Dr. Bruce Hoffman, Director, RAND, Washington, D.C.; Dr. Magnus Ranstorp, Director of the Centre for the Study of Terrorism and Political Violence, University of St. Andrews; and Dr. K. Jack Riley, Co-Director, RAND Center for Terrorism Risk Management Policy.
The model's introduction reflects the reality that, increasingly, terrorist intent extends to many locations worldwide. "International terrorism risk is changing and becoming more of a global phenomenon. The diversification of Islamic terrorism now threatens Western interests in many countries," said Dr. Gunaratna. "The war in Iraq is serving as a psychological and physical training ground for a new generation of terrorists, many of whom are now turning their attention to promoting jihadist causes in other countries around the world."
Perspective on the resources available to thwart potential terrorist activity is a key factor in assessing the nature of risk in specific countries. "Terrorism risk in a particular country is a function of internal and transnational threats counterposed by the domestic counter-terrorism environment," said Richard Reeve of Jane's Information Group. "Jane's has developed an index of counter-terrorism environments for RMS, based on analysis of the intelligence services, frontier security, legal framework, and other factors in each country."
Other components of the expanded suite of RMS terrorism risk management products are:
Exposure accumulation functionality is being expanded to all of the more than 40 countries that are currently supported by RiskLink(R), the company's core catastrophe modeling software. The exposure accumulation functionality allows users to identify and quantify multi-line concentrations of insured exposure within a user-defined radius, and the implications for associated terrorism risk.
The RMS(R) Terrorism Scenario Model in RiskLink also has been expanded to cover 14 countries. The model allows users to estimate multi-line losses at any user-defined location under 30 different attack scenarios, ranging from conventional bombs to chemical, biological, radiological, and nuclear attacks.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access