2020 a year of turmoil SOLUTIONS Annual Review Opinions Focus Threat Intelligence Risk Evaluation 2 About this Review About Pool Re SOLUTIONS Intelligence cut-off date Disclaimer The Pool Re SOLUTIONS Annual to provide a statistical underpinning Pool Re SOLUTIONS was launched The analysis in this report was current This report has been prepared by Review provides an overview of to other studies. Where the Global in November 2019 and combines as of 1 Sep 2020 and has not been Pool Reinsurance Company Limited significant developments in the field Terrorism Database was not used, decades of knowledge and expertise updated to reflect recent developments, (Pool Re). While this information of terrorism risk, bringing together we used publicly available data drawn with data and analytics drawn from a such as the change of the UK’s threat has been prepared in good faith, no experts from a range of disciplines from a variety of sources, the references wide range of notable partnerships. level to SEVERE, or the imposition representation or warranty, expressed including (re)insurance, policy, to which can be found at the end of of a second ‘lockdown’ in England or implied, is or will be made and no academia, security, and risk each article. By investing heavily in the best and Wales. responsibility or liability is or will be management. As well as addressing people and resources to support our accepted by Pool Re, or by any of its key issues in counter-terrorism and We hope that our analysis of the terror objectives, we are able to provide respective directors, officers, employees protective security, the Review threat will be helpful for our Members our clients with a blend of services, or agents in relation to the accuracy includes leading research and and other stakeholders as they seek information, and tools to evaluate, price, or completeness of this document, commentary on significant events and a greater awareness of the frequency and manage terrorism risk. and any such liability is expressly trends in disaster risk financing and and severity of terrorist events and disclaimed. In particular, but without how the evolving threat impacts It is comprised of three pillars: Risk related public policy. Contributors to Awareness, Risk Modelling and Risk limitation, no representation or warranty the report include both SOLUTIONS on their particular area of activity. is given as to the reasonableness of Furthermore, we aim to promote a Management, with all three teams in-house team of analysts, actuaries, contributing to this report. future suggestions contained in this and risk managers, and individuals from better understanding of the challenges document. Pool Re is a company Pool Re’s wider network of thought and opportunities faced not only in the limited by guarantee and registered in leaders and subject matter experts. field of terrorism risk, but by the wider England and Wales under company no. (re)insurance sector. 02798901, having its registered office at When examining the terrorism threat, In this edition, we consider a range Hanover House, our methodology is based on analysis 7 Savoy Court, London WC2R 0EX of the wide range of publicly available of trends and events which are open source material and collaboration reconfiguring the threat landscape, with subject-matter experts. We also as well as looking more widely at used the Global Terrorism Database, developments in the re(insurance) compiled by the University of Maryland, sector and related legislative and policy issues. Pool Re SOLUTIONS Annual Review 2020 Opinions Focus Threat Intelligence Risk Evaluation 3 facing. Stephen Catlin (Chairman and CEO, Convex) and Dr I am pleased to introduce this year’s Adrian Leonard (University of Cambridge) address the difficulties Annual Review. Twelve months ago, of anticipating complex risks, and pose a series of challenges we launched SOLUTIONS, an in-house we must collectively overcome if we are adequately to prepare for these. In response, Professor Paula Jarzabkowski (City centre of excellence to work alongside University) considers how the increasing prevalence of systemic Pool Re and drive its expertise in risk threatens traditional models of risk transfer, and whether a new approach to managing these is now required. understanding and mitigating terrorism Alongside this, the Review contains comprehensive analysis of risk and financing terrorism risk solutions. the current terrorist threat to the United Kingdom, drawing on in- This publication marks SOLUTIONS first anniversary and comes house expertise from the SOLUTIONS team as well as its wider towards the end of a year which continues to present acutely network of excellence, including contributions from subject- This timely challenging conditions for virtually every business and nation matter experts in academia, policy and risk management. publication comes across the world. I am very grateful to all of the Review’s contributors, and to the towards the end of a Despite these challenges, and as this report demonstrates, ongoing work of our network of partners in the UK and around year which continues SOLUTIONS has already made significant steps in progressing the world with whom we share a common purpose. Mutual the UK market’s understanding of contemporary terrorism risk. interests have long been a key ingredient of cooperation and to present acutely As an industry, we cannot effectively mitigate or finance terrorism progress, and COVID-19 is just the latest reminder that no nation challenging conditions risk solutions without a deep knowledge of its drivers, of how it is immune to the vulnerabilities of our interconnected world. As for virtually every manifests now and may manifest in the future. SOLUTIONS is several of the articles in this Review discuss, terrorism is likely committed to furthering this understanding in the years ahead, to shape a number of the threats on the daunting spectrum of business and nation and to investing in the research and development our industry catastrophic risk we all face in the years ahead. across the world needs to take a greater and more confident stake in insuring and The insurability of extreme risk is going to be one of the defining mitigating terrorism risk in the years ahead. issues of the next decade, not just for our sector, but for the The contributors to this edition underscore our commitment societies we serve. Our ambition is for Pool Re SOLUTIONS to to bringing together talent from a broad range of disciplines provide a template for how mutual interests and cross-sectoral to develop the best possible understanding of terrorism and partnerships can improve our collective understanding of catastrophic risks, and how we might strengthen our national emerging risks. Only with this understanding can our society resilience to such risks at the beginning of a decade which has be more resilient through better preparedness, innovative already brought profound uncertainty and difficulty. mitigation techniques, and creative forms of risk sharing and financing solutions. We are fortunate to be able to draw on the expertise of former leaders like the Rt Hon Amber Rudd (former Home Secretary) In that spirit, I hope you enjoy this year’s Review. and Paddy McGuinness (former Deputy National Security Director). Both have shared their views on the security challenges facing the nation, and how greater public–private collaboration can improve the UK’s resilience to extreme risk. Julian Enoizi The Review also includes contributions from leading voices CEO, PoolRe within the insurance industry on the challenges it is currently Pool Re SOLUTIONS Annual Review 2020 Opinions Focus Threat Intelligence Risk Evaluation 4 Pool Re SOLUTIONS Annual Summary 2020 Opinions Focus Threat Intelligence Risk Evaluation Headline: Terrorism and risk management in a Guns ‘n’ Bombs: “They haven’t gone away The UK protect duty (Martyn’s Law) A conversation with the Rt Hon Amber Rudd post-COVID world you know...” A closer look at the consultation on new Pool Re’s Chief Resilience Officer talks to the Current threat landscape and the changing Terrorist intent, capability, and the threat of firearms protective security legislation and how it former Home Secretary about politics, security risk management environment and explosives attacks might support the insurance industry and national resilience Horizon scanning the terrorism threat The growing violence of the far right NDBI in Europe: observations and Rethinking resilience in the 2020s Understanding the drivers of terrorism and anticipating Assessing the scale of the threat posed by implications for the UK Integrating reinsurance into the national resilience new threats right-wing terrorism Pool Re’s Chief Actuary reflects on recent and disaster risk financing architecture non-damage terrorist events in Europe and How will Brexit impact on the UK’s ability to Terrorist recidivism what these mean for the UK From risk transfer to risk sharing counter terrorism? How much of a problem is reoffending by How systemic risks are changing the relationship Pan-European security initiatives and the outlook convicted terrorists? Business Interruption between risk, responsibility, and reward and the for security cooperation post-Brexit Lessons from COVID-19 and beyond need for greater risk sharing E-Jihad: a credible new threat? Insure to be resilient: how to strengthen national Al-Qaeda’s new cyber strategy and the outlook for Can you really manage terrorism risk? Our word is our bond security in a post-COVID world ‘cyber