Today marks the 16-year anniversary of 9/11, and as we remember those who perished and honor first responders on that day, it’s worth noting that we have not had a large-scale terrorist attack on U.S. soil since then.
From a recent discussion by property underwriters Gedion Amesias and Jeri Xu at the Swiss Re Open Minds blog:
“Since 9/11, the U.S. government and four of its allies (Five Eyes alliance) have been spending tens of billions of dollars each year on counter-terrorism. Even though it’s hard to accurately estimate, there are experts that approximate the U.S. spends around $100 billion a year on counter-terrorism efforts. Successful attacks since 9/11 have been carried out by either a lone wolf or a duo, for example the 2016 cargo truck attack in Nice by one driver, and 2013 Boston Marathon bombing by a pair of brothers. Plots that involve more people are more likely to be discovered through the surveillance of their communications, so organized large-scale plots are less likely to occur.”
“Terrorism insurance is effectively insurance against the failure of counter-terrorism. Because counter-terrorism efforts have increased so much post 9/11, a reasonable assumption to make is that the frequency and severity of loss from terrorism have decreased significantly.”
They conclude that underwriters need to think about how terrorists will behave going forward and how governments around the world will counteract terrorism in order to predict where and to what extent future losses may occur.
Willis Towers Watson offers insight into how insurers are responding to meet the evolving nature of terrorism.
The I.I.I. has resources on terrorism risk and insurance here.
The 9/11 attack produced insured losses of $39.4 billion (adjusted to 2009 dollars), including property, business interruption, aviation, workers compensation, life and liability claims.
The report finds that the terrorism threat facing the U.S. today is more complex and more diverse than at any time in the past nine years.
While the reportÃ¢â‚¬â„¢s authors believe mass casualty attacks involving weapons of mass destruction are now unlikely, they point to the increasingly prominent role in planning and operations that U.S. citizens and residents have played in terrorist groups. They also note the increasing growth and diversification of homegrown terrorist threats: