Thursday, April 18, 2013
While insured property losses from the Boston Marathon bombing are small, the insurance of sports events is likely to be impacted, according to catastrophe modeling firmÂ RMS.
Dr. Gordon Woo, catastrophist at RMS noted that the shortage of terrorism insurance cover in the years after 9/11 had led to the securitization of the cancellation risk of the 2006 FIFA World Cup.
Dr. Wooâ€™s comments came as investigators moved closer to identifying possible suspects in Mondayâ€™s bombing which left 3 dead and more than 170 injured.
RMS says most of the property damage appears to be within 10-20 feet of the explosions, and insured property losses are unlikely to exceed $1 million. However, it believes the costs of business interruption as a result of security restrictions made after the event may be a larger source of insurance claims.
The Boston marathon attack was the first high-profile successful act of terror in the U.S. since 9/11, but it should be seen as one of the dozens of terrorist plots launched against the U.S. homeland since then.â€
RMS noted that the use of smaller sized lethal explosive devices has been the preferred attack mode in recent terrorist plots. Street events, like the marathon, are inherently vulnerable because while they are very large crowds public access is unrestricted.
Dr. Woo added that plots involving a small number of operatives, such as seems to be the case in the Boston bombing, are the most difficult to prevent:
Global Reinsurance has more on this story.
Check out I.I.I. facts and stats on terrorism risk.