RMS Updates U.S. Terrorism Risk Model

October 25, 2004

Risk Management Solutions (RMS) announced that the latest and most comprehensive view of the evolving terrorism risk facing the U.S. has been incorporated into a new version of the RMS U.S. Terrorism Risk Model.

The model reflects the proliferation of Islamic militants that are motivated and threatening the U.S. with a major, or “macro,” terrorist attack during 2005. Risk estimates in the updated RMS model are based on an analysis of current terrorist group capabilities, targeting strategies, counter-terrorism measures, and physical modeling of attack mechanisms.

“Our updated model indicates a greater threat compared with the previous year,” said Dr. Gordon Woo, chief architect of the RMS model. “Record numbers of macro attacks worldwide, a substantial increase in the number of planned attacks within the U.S., and increased activity in Islamic militant recruitment and rhetoric, all lead us to believe that the risk of a major attack has increased.”

While government investment in homeland security has reportedly improved the chances of interdicting attempted attacks, an increase in the expected number of attempts makes it more likely that a macro attack will occur in 2005.

However, even though the overall chances of an attack have increased, the expected severity of an attack has reportedly decreased.

Intelligence suggests that an attack in the U.S. is now more likely to involve the deployment of conventional weapons such as vehicle bombs, which are easier to deploy than weapons of mass destruction but can still cause substantial property damage and high casualties, particularly in public congregation points.

In contrast, the chances of an attack involving a chemical, biological, radiological, or nuclear (CBRN) weapon have decreased because U.S. and global defenses have improved the capability to detect such weapons, and the suspected Iraq weapons stockpile has not materialized.

Potential terrorist targets in the RMS model reflect recent Islamic militant attack patterns worldwide as well as discovered attack plans for the U.S. The new version of the model includes an update of the target database with additional railway and subway stations, following the recent attack at the Madrid train station and additional intelligence reports.

To account for potential shifts in the terrorism landscape over the coming year, the model also supports multiple “Risk Outlooks,” including an expected outlook based on the current consensus view of the terrorism threat, as well as alternative outlooks reflecting plausible changes to the terrorism environment that could increase or decrease risk.

The RMS model includes the full set of analytical capabilities required to support terrorism risk management in the U.S. It provides a fully probabilistic quantification of terrorism risk in the U.S. from all foreign and domestic sources, and supports multi-line risk analysis for property, business interruption, workers’ compensation, life, personal accident, and accidental death and dismemberment insurance.

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