Risk Management Solutions (RMS) has announced the fourth annual release of its US Terrorism Risk Model.
The model reveals that while the risk of terrorist activity continues to increase globally, the risk of attack by terrorists on US soil has slightly decreased due to improvements in counter-terrorism security measures.
The risk of extreme events over the next five years, including terrorist attacks using chemical, biological, radiological, and nuclear (CBRN) weapons has increased, with the possibility of terrorists obtaining and using weapons of mass destruction, such as CBRN weapons, of most concern.
RMS' new model suggests that although the probability of a CBRN attack remains small, biological attacks make up an increasing share of the CBRN risk, which could result in more deadly attacks.
Dr Andrew Coburn, director of terrorism research at RMS, said: "The improvements in US security are making it harder to carry out big attacks, but as we've seen in the attacks in London and Madrid, the terrorists are now using smaller-scale attacks on soft targets to cause civilian casualties." He added: "The threat of a mass-casualty attack by a determined group remains a real possibility."
RMS has also released a position paper, 'A Risk-Based Rationale for Extending the Terrorism Risk Insurance Act' which adds to the debate on extending TRIA. RMS concludes that TRIA offers protection in the case of extreme losses that could threaten the solvency of the industry.
Hemant Shah, chief executive and president of RMS, said: "Our modelling shows that terrorism risk continues to pose a set of unique challenges to the US insurance industry, making it highly likely that a large majority of insurers will quit the market for terrorism insurance without TRIA in place.
"TRIA has achieved many of its objectives, but its expiration on 31 December will not lead to sustainable private market sector for terrorism insurance. We have set out a risk-based rationale for its extension."
