Austerity measures and spending cuts in Europe sparked civil unrest, riots, strikes and student protests across Europe, leading to 43 percent of the downgrades in AonÃ¢â‚¬â„¢s analysis. The UK, France, Germany, Italy, Portugal and Spain were all downgraded from low risk to medium risk.
Meanwhile, terrorism remains relevant to the security of businesses, with some 46 percent of all countries assessed possessing the risk of terrorist incident icon, according to Aon.
It notes that the death of Osama bin Laden last year signified the decline of a truly globalized radical Islamist terrorism capability, but regionally active groups continue to be inspired by al-QaidaÃ¢â‚¬â„¢s ideology.
While South Asia and the Middle East remain focal points for Islamist terrorist groups, Africa has shown the most dramatic shift in terrorism threat in the last year, Aon says. The ratings of six African countries have been downgraded with Senegal receiving a double downgrade from low to high risk.
In a press release Dr. David Claridge, managing director of Aon Risk Advisory, comments:
Is it possible that a remote cyber attack from Russia caused a pump to fail at an Illinois water utility? ThatÃ¢â‚¬â„¢s the theory put forward by cyber security expertsÃ‚ cited inÃ‚ numerous media reports.
The Federal Bureau of Investigation (FBI) and the U.S. Department of Homeland Security are said to be investigating the matter, but so far have not confirmed the reports.
According to the Washington Post blog Checkpoint Washington, this cyber attack, if confirmed, would be the first to cause physical damage:
Additional I.I.I. resources on this topic can be found here.Ã‚ A New York Times special report also has some interesting perspectives on the costs and consequences of 9/11.
As we look to the 10th anniversary of 9/11 this weekend we pause to remember those who lost their lives on that day.
The 9/11 MemorialÃ‚ in New York City will be dedicatedÃ‚ on Sunday and open to the public on Monday. The website www.911memorial.orgÃ‚ has images and details for planning your visit.
On a separate note, the latest edition of Cavalcade of Risk,Ã‚ which featuresÃ‚ relevant and timely blog posts on a variety of risk management and insurance topics, is hosted this week by our friends over at Risk Management Monitor.
While the report states that substantial progress has been made post-9/11 in improving homeland security, it highlights a number of areas where more needs to be done.
For example, it says the nation is still highly vulnerable to aviation security threats, noting that the Transportation Security Administration still lacks reliable explosives detection technology and lags in its capability to automatically identify concealed weapons and explosives.
As America pauses to reflect on the decade since 9/11, a new book by experts from the RAND Corporation points out that the United States has made many mistakes in its response to the 9/11 attacks and significant attention is needed to correct the nationÃ¢â‚¬â„¢s path.
Those errors include overconfidence in rebuilding Afghanistan, launching a war in Iraq that did little to weaken al Qaeda, and many actions that aided jihadist recruiting by fostering resentment toward the U.S., such as the detainee abuse committed at Abu Ghraib prison.
A key insurance-related topic covered by one of the essays in the book is how to compensate victims of terrorism where some early solutions may soon disappear.
In this essay RAND economist Lloyd Dixon and colleagues point out that when the latest extension of the Terrorism Risk Insurance Act of 2002 expires at the end of 2014, the nation will be without a system to fund insurance against losses from terrorist attacks.
The authors suggest that creating a rational compensation system to aid those hurt by terrorism can promote social cohesion and national unity, and contribute significantly to both social and economic resiliency.
Ã¢â‚¬Å“The Long Shadow of 9/11: AmericaÃ¢â‚¬â„¢s Response to TerrorismÃ¢â‚¬ is available at www.rand.org
It also discusses the importance of the terrorism risk insurance program Ã¢â‚¬“ a public-private risk sharing partnership that since 2002 has allowed the federal government and the insurance industry to share losses in the event of a major terrorist attack.
To learn more about the insurance implications of Bin LadenÃ¢â‚¬â„¢s death, check out the video below featuring I.I.I. president Dr. Robert Hartwig speaking from Ground Zero.
Today both these terrorist attacks (9/11 and the Oklahoma City bombing) would be covered under the terrorism risk insurance program — a public-private risk sharing partnership that since 2002 has allowed the federal government and the insurance industry to share losses in the event of a major terrorist attack.
The 2007 extension to the terrorism risk insurance program expanded the definition of a certified act of terrorism to eliminate any distinction between domestic or foreign acts of terrorism.
The program is designed to ensure that adequate resources are available for businesses to recover and rebuild if they become the victims of a terrorist attack.
While the Obama Administration has proposed scaling back federal support of the program, the I.I.I. paper cites industry views that the program provides incentive to property/casualty insurers and reinsurers who might not otherwise provide terrorism insurance at current capacity levels or pricing.
Next year marks the 10th anniversary of 9/11 and the cost of terrorism still looms large in United States history.
ItÃ¢â‚¬â„¢s worth noting that after more than nine attack-free years, the $32.5 billion in losses paid out by insurers for the terrorist attack of September 11, 2001, places second in an I.I.I. ranking of the most costly U.S. catastrophes Ã¢â‚¬“ after just Hurricane Katrina (2005).
According to a story today on NPR, human error is a key reason for the failure of a number of high-profile terrorist attacks in the course of the past year.
NPR quotes Phillip Mudd, a former CIA and FBI terrorism specialist saying that the U.S. shouldnÃ¢â‚¬â„¢t take any solace in the fact that plots launched in 2010 fell flat:
The WSJ says the simulation of attacks included a series of bombings and gun attacks and was structured to mirror the November 2008 Mumbai attacks in India, when in the course of a few minutes, 10 gunmen attacked various locations in the city.
It shows that Somalia moved from 4 to 1 in this yearÃ¢â‚¬â„¢s Terrorism Risk Index (TRI) and has the highest number of deaths from terrorism per population, surpassing Iraq and Afghanistan in the number of fatalities per terrorist attack.
Yemen has also jumped into the extreme risk category for the first time. The country has seen a very significant increase in the number of terrorist incidents on its own soil with a total of 109 attacks between June 2009 and June 2010, Maplecroft reports.
A recent incident in which two parcel bombs sent from the Yemen were discovered aboard cargo planes en route to the U.S. minutes before detonation, highlights the elevated risk given this country by Maplecroft.
The index ranks the U.S. (33) at higher risk for a terrorist attack than France (44) and the United Kingdom (46), though none of the major Western economies fall within the high or extreme risk bracket.
Greece saw the largest jump in rankings from 57 to 24, overtaking Spain (27) to become the European country most at risk from terrorist attacks.
Check out the I.I.I. paper for more information on why terrorism risk is likely to remain a serious threat in the decade ahead and why changes to the federal terrorism risk insurance program would have a detrimental impact on the availability and affordability of terrorism insurance.