2 Pool Re working with businesses across UK to mitigate impact of terrorism

3 Launch of the Terrorism Threat and Mitigation Report

3 Pool Re and Nuclear Threat Initiative (NTI) Conference

4 Message from the Chief Executive

Three attacks in as many months has highlighted the scale of the challenge the UK now faces, each exhibiting slightly different threats for MI5, the police and society as a whole to deal with.

In the case of the Westminster attack on 22 March 2017, the methodology used was consistent with many of the recent events in mainland Europe, involving a vehicle intentionally driven into pedestrians, followed by a knife attack. It was carried out by a 52-year old lone actor, Khalid Masood, who had no apparent links overseas, or affiliations with a wider network.

Whilst also carried out by a lone actor, the attack in Manchester on 22 May illustrated a much higher degree of complexity

and sophistication, indicating the involvement of a wider network or specialist knowledge. The attacker, Salman Abedi (22), was considerably younger than Masood and had recently returned from a trip to Libya where he may have learnt the required bomb making skills. It was also likely he received assistance from other UK-based individuals, hence the Government’s decision to raise the threat level from SEVERE to CRITICAL following this event.

Finally, while the method of the London Bridge attack had similarities to the one in Westminster, considering the use of a vehicle at high speed and subsequently knives, this time there were three attackers, Khuram Butt, aged 27 from

Barking, Rachid Radouane, aged 30 also from Barking, and Youssef Zaghba, aged 22, a Moroccan-Italian, suggesting a greater degree of pre-meditation and planning.

All the attacks took place in crowded places and were timed to maximise casualties. They were all Islamist extremist in nature and the methodologies consistent with other Daesh or al Qaeda inspired activity in Europe as well as advice promoted in extremist publications such as Inspire and Rumiyah. Crucially, it now seems likely almost all the attackers were known to MI5 and the police.

The frequency of these latest attacks has similarities with the scale experienced in France in recent years. Why the UK is now

experiencing such activity is complex. It may perhaps be a result of changing strategic priorities from Daesh’s leadership, although this is unlikely. Far more likely is that MI5 and the police are facing an increasingly demanding and ever-changing threat.

As a result, the Government’s plans to bring forward the review of CONTEST to bolster the UK’s counter-terrorism capabilities are welcome. Preventing attacks and protecting the public is clearly the priority. We are also working with Government to help build the UK’s resilience to attacks, particularly considering the detrimental impact of such events on the economy. Ensuring that the economy is more than adequately covered from terrorist attacks is a vital part of maintaining the strength of the United Kingdom. Business has a role to play in protecting itself.

Pool Re will, by incentivising behavioural change through premium discounts in exchange for the implementation of security measures, also play its part in managing and mitigating risk.

The Changing Face of Terrorism: How the Government should respond

Inside this issue

Insight | Issue 5 | June 2017

In July last year, then Commissioner of the Metropolitan Police, Sir Bernard Hogan-Howe, clearly stated that the risk of a terror attack in the UK remained a case of “when, not if”. Almost a year later his warning has become a painful reality. In just ten weeks, there have been 35 deaths in the UK at the hands of so called Islamist terrorists, while over 300 people have also been injured.

The recent terrorist attacks in London and Manchester prove that UK is dealing with an unprecedented threat that is not just isolated to London. As the attacks in France and now the UK have proven, it is not just capital cities which are targeted by terrorists. As we have seen with the indiscriminate attack on Manchester, regional city centres are proving just as viable, resulting in the fact that businesses outside of London may bear the brunt of business interruption and loss of attraction.

The police cordon around Manchester Arena and Manchester Victoria station was in place for a week, resulting in significant loss of income for businesses during the period. Once reopened, a combination of reduced public footfall and the UK threat level escalated to “critical” - its highest terror alert for a decade – further impacted the ability to trade in the area in general.

This interruption was not just limited to the immediate area of the attack. The Arndale shopping centre was also evacuated and closed for a short time due to heightened security, equally resulting in a loss of attraction and significant loss of income.

Businesses across the UK need to have the confidence that, following a terrorist attack, they will be able to get back on their feet to provide much needed services. Pool Re, whilst working with businesses across the UK to ensure that they have appropriate risk management and resilience processes in place to mitigate the effects of terrorism, still looks to do more. Indeed, Pool Re has now partnered with the Centre for the Protection of National Infrastructure (“CPNI”) to raise awareness of the Government’s risk management advice for businesses and the Passport

to Good Security best practice in particular. As a valuable tool for risk management and insurance professionals working to improve the resilience of businesses against domestic and international terror threats, Pool Re is working to increase accessibility and improve understanding of this crucial Government initiative.

Likewise, in partnership with the National Counter Terrorism Police, crowded places are being offered a discount on their insurance premium in return for implementing the government accredited Protective Security Improvement Activity scheme designed to improve resilience to attack.

Pool Re working with businesses across UK to mitigate impact of terrorism

Westminster Attack22 March 2017• Aged 52 years old• ‘Lone actor’• No network• No links overseas

Manchester Attack22 May 2017• Complexity and sophistication• Use of home made explosives• Links to overseas• Network of associates

Use of vehicle and bladed weapon

Targeting of iconic sites

British born perpetrators

Lone attackers

London Bridge Attack03 June 2017• Three attackers shows

level of complexity and a wider network

• Islamist extremism• Known to

police and MI5• Crowded places • Use of internet

and ideology• Methodology

promoted online• Timed to maximise

casualties

*Please note, this newsletter went to press before the official designation of the attack on the Finsbury Park Mosque

IFTRIP (International Forum for Terrorism (Re) Insurance Pools)Launched under the guidance of Pool Re in 2015, the International Forum for Terrorism (Re) Insurance Pools (IFTRIP) brings together the world’s terrorism reinsurance schemes, following a ten-year period of collaboration amongst the major reinsurance pools within in OECD network, and formally ratified at the conference in Canberra last year.

Its objectives are clear: to combine our expertise, share experiences and best practice; and promote proven risk management techniques and processes around the world.

As an organisation, it can play a key role in mitigating the threat posed by terrorism and limiting economic losses. It will also look at the development of private terrorism markets and the challenges facing the provision of effective terrorism insurance and report its findings publicly later in 2017.

Jamie Shea Deputy Assistant Secretary General for Emerging Security Challenges, NATO

Terrorism is a threat that is constantly mutating, and a firm response in one area often only seems to produce new problems elsewhere.

For instance, it will be good news if the ISIL caliphate in Syria and Iraq is soon removed through the actions of the anti-ISIL coalition; but if this means that up to three thousand foreign fighters will return to Europe and establish ISIL cells in cities across our continent, the headache for European intelligence services and police will become even bigger. Likewise, while the pressure on organizations like ISIL and Al Qaeda has made it more difficult for their leaders to plan large-scale and well-financed and orchestrated attacks; this pressure has only encouraged ISIL to promote more “lone wolf” or self-starter attacks, in which individuals often unknown to intelligence services radicalize themselves on the internet and use knives or vehicles to attack

people on the streets at random. Even a minor terrorist attack can still provoke wall to wall media coverage and give ISIL a propaganda victory. In short, the terrorist threat is becoming ever more diverse and multifaceted. It requires action both inside our borders and well beyond to prevent terrorist organizations from enjoying sanctuaries from where they can organize attacks and develop more sophisticated weapons, such as drones, missiles or chemical agents. In this environment, every organization has to ask itself whether it is doing enough and has to raise its game. Pool Re has led the way in ensuring the insurance industry is thinking internationally in its response to the threat posed by terrorism to businesses and infrastructure. Likewise NATO is leading the way as the traditional front line against terrorism collaborates internationally.

In the wake of the special Summit meeting held in Brussels on 25th May, NATO Allies adopted a Counter-Terrorism Action Plan with a number of different steps which will not only give the Alliance more visibility in this fight but also increase its impact and effectiveness.

The first step is that NATO is now a full member of the Anti-ISIL Coalition in addition to each of its own 29 member states. This means that it can

bring its collective assets to bear in the future activities of the Coalition. NATO AWACS aircraft are already flying from Turkey over Iraq and providing valuable air command and control and support to Coalition aircraft. NATO will see what it can do to step up its support for on-the-ground training and capacity-building efforts. It has already established a mission in Bagdad working with the Iraqi army to counter improvised explosive devices and assist with medical support and vehicle maintenance.

A second area concerns Afghanistan, where NATO is in discussions over how we can generate more troops for our Resolute Support training mission for the Afghan army. Other training efforts in Jordan and Tunisia will develop special forces and help with intelligence and cyber security. NATO will also be looking at assistance to Libya in establishing a national armed force and following an invitation from the government of that country. A Hub for the South to be set up in Naples will improve NATO’s situational awareness on terrorist threats in the region and ability to organize mobile training teams. Moreover, the recent establishment of an Intelligence Division in NATO and a Terrorist Intelligence Cell is improving the vital exchange of information between Allies in this area.

Finally, NATO’s Defense Against Terrorism Programme of Work continues to develop cutting-edge technologies that can

be the real battle winners in the fight against terrorism; for instance better biometrics sharing between the military and law enforcement, human network analysis to identify and dismantle terrorist networks, counter explosives equipment and non-lethal weapons which can give military commanders a greater spectrum of options in dealing with threats like suicide bombers.

An Action Plan is at the beginning only a plan. NATO’s ambition is to put the Action into it in time for the next NATO Summit in the second half of 2018.

Launch of the Terrorism Threat and Mitigation Report

NATO and terrorism

Pool Re and Nuclear Threat Initiative (NTI) Conference

Earlier this year, Pool Re launched the latest report from our Terrorism Research and Analysis Centre.

The Terrorism Threat & Mitigation Report analyses how, despite the recent military successes against Daesh in Iraq and Syria, the organisation has been mutating, as predicted, into a more dangerous entity through its focus on ungoverned spaces, be they geographical or online through the dissemination of rhetoric and propaganda.

The report foresaw the recent methodologies used in the recent UK attacks, the

As part of our ongoing work with stakeholders around the world on the risks posed by radiological materials, Pool Re and NTI held a joint conference in London in April.

The conference covered the urgent need to reduce risks associated with radiological materials used in the healthcare sector as well as the economic impact of a radiological “dirty bomb” in the UK via a perspective from insurers. Presentations included a case study on risk mitigation measures at play in hospitals in New York City.

Lord Des Browne, Vice Chairman of the NTI and former Secretary of State for Defence, delivered the keynote speech at the event, which attracted over 60 attendees drawn from government, academia, healthcare, reinsurance and insurance. Pool Re works with the NTI as part of its mission as a risk-mitigation organisation so as to gain a unique insight into the highly complex issues surrounding vulnerable radiological materials around the world and encourage their safe removal.

contribution of the Islamist group Al-Muhajiroun and the resurgence of Al Qaeda as a growing threat. The threat posed by returning fighters, the clear linkages between ‘home and away’ networks and concerns over the use of unconventional technologies was also identified.

Speaking at the report launch event held at RUSI, and which saw presentations and debates from the industry on the consequences of the military defeat of Daesh in Syria and Iraq, our CEO Julian Enoizi spoke about

the insurance industry’s response to the diverse range of terrorism threats. He also outlined Pool Re’s evolving role in encouraging greater economic resilience to terrorism, through measures such as risk mitigation and accredited risk management strategies.

TMR–1–17

Terrorism Threat & Mitigation ReportAugust – December 2016

Terrorists continue to target crowded places, with the aim of inflicting mass casualties. The current trend of targeting “people over property”, utilising off-the shelf technologies (such as vehicles and bladed weapons), continues to expose the terrorism insurance coverage gap that Pool Re is currently addressing with its stakeholders.

Pool Re remains alert, underpinned by warnings from Sir Michael Fallon, to the enduring threat posed by Al Qaeda and their intent to launch a “spectacular” attack against the UK. In November, the Chancellor announced that ‘Cyber Risk’ now ranked alongside “guns, bombs and knives” as a terrorist capability that the UK needs to urgently defend itself against. Whilst Pool Re continues to work with the Government to increase the scope of its cover to include damage caused by remote digital interference,

we continue to work with the Centre for Risk studies and Judge Business School at Cambridge University, to build a greater understanding of the impact of this evolving threat.

In addition, I am delighted to announce that Pool Re and Cranfield University are partnering to undertake world-leading research, development and education in risk mitigation for counter-terrorism. As a result of this collaboration, which includes the appointment of Professor of Terrorism Risk Management and Resilience,

co-funded by Pool Re, our joint aim is to harness Cranfield University’s, as well as the wider academic community’s, subject matter expertise in the vital area of counter terrorism and security.

As a mutual reinsurer whose members comprise the vast majority of insurers of commercial property in the UK, Pool Re is in a unique position to lead the insurance industry towards improved understanding and involvement in the overall management of terrorism risk. In working with Cranfield, and other strategic partners, we will continue to provide an appropriate forum for improved dialogue between Government, the Insurance industry, wider industry and all other relevant terrorism risk management stakeholders. This is the first collaboration of its type in the world, creating what will become a national capability to improve UK resilience to terrorist activity to mitigate losses, thereby returning more of the risk to the conventional market and reducing the need for Government support.

ContactE enquiries@poolre.co.uk T +44 (0)20 7337 7170F +44 (0)20 7337 7171W poolre.co.ukT @PoolReinsurance

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Registered in England and Wales, Number: 2798901Registered Office: Hanover House, 14 Hanover Square, London, W1S 1HP

Authorised by the Prudential Regulation Authority and Regulated by the Financial Conduct Authority and the Prudential Regulation Authority

Pool Re is a mutual reinsurer whose Members comprise the vast majority of insurers and Lloyd’s Syndicates which offer commercial property insurance in the UK. Any insurer authorised to insure losses arising from damage to commercial property in Great Britain is eligible to apply for membership of Pool Re, regardless of their domicile.

Some of the logos opposite will not be familiar as providers of insurance since they are what are known as ‘captives’. Captive insurance companies are insurance companies established by a parent group or groups with the specific objective of covering the risks to which the parent is exposed.

Members

Benefits

Because of Pool Re’s unique relationship with HM Government, the with pools in other countries considering adapting their models to better reflect ours

Pool Re now pays HM Treasury 50% of its premiums, likely to amount to around of new money to the Government in respect of 2017

£150 million

Any outlay from HM Treasury must be repaid by Pool Re; the scheme is designed to run at UK is setting

the benchmark internationally,

nil cost to the taxpayer£8 billion

Scheme reserves in excess of £6 billion and a further £2 billion of commercial retrocession has now been bought in the market, keeping HM Treasury well over

away from having to use taxpayers’ money

Message from the Chief Executive Julian Enoizi

The first half of 2017 has seen an unprecedented level of incidents stemming from Islamist extremism in the UK. Three attacks in 10 weeks, resulting in the tragic loss of 35 lives and over 300 injuries. Today’s terrorism is global, evolving, persistent and ideological.