Catastrophe modeling firm RMS revamped its terrorism model to reflect lower terrorism risks in countries including Canada, Denmark, Ireland, Italy and the United Kingdom.
RMS said the changes reflect data showing fewer large-scale terrorism attacks that caused significant property damage, high fatalities or multiple injuries. As well, the model is updated to account for governmental counter-terrorism successes plus a weaker al-Qaida, which has contributed to a reduced threat of bigger terrorist attacks.
“The updated RMS model shows a 15 percent to 35 percent reduction in the overall attack frequency of large-scale events for Copenhagen, Dublin, London, Milan, Montreal, Toronto, Rome and Vatican City,” Chris Folkman, director, model product management at RMS, said in a statement. “Worldwide, the frequency of macro-terrorism attacks is 85 percent lower in 2014 than in 2006, with a marked decrease over the past six years due to reduced terrorist threat and increased counterterrorism capabilities.”
In addition, RMS noted that the model accounts for violence and political instability in Pakistan, Iraq and Syria, which have offered safe havens for terrorist recruitment and operations.
As RMS and others updating their terrorism cat models, the U.S. remains in the final stages of renewing the Terrorism Risk Insurance Act, a post 9/11 law that enables the government to provide federal property/casualty reinsurance coverage after a terrorist attack. In July, the U.S. Senate overwhelmingly approved a bipartisan bill that would reauthorize the law known as TRIA for seven years, and boost co-payments from 15 percent to 20 percent in order to lessen the cost for the U.S. government. The House would renew TRIA as well, but it must be approved in a floor vote before both sides can reconcile their differences and actually extend the program.
The current TRIA law expires on Dec. 31, 2014.