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By Michael Kistler

NEW YORK -- While the prospect of global terrorism risk may seem rosier after the death of Osama bin Laden, the road ahead will remain rough, due to new threats from cyberterrorism and an evolving Al Qaeda network, according to experts at the Emerging Terrorism Landscape conference hosted by Risk Management Solutions on July 26 in New York.

The emerging threat and insurance coverage implications of cyber terrorism make the terrorism landscape looks particularly rocky.

During his talk titled "Extreme Cyber Risk Scenarios," Rick Wesson, CEO of Support Intelligence LLC, detailed several possible scenarios in which attacks made over computer networks could threaten not only the IT targets, but also could cause a wide range of physical damage.

Attacks on industrial, defense, public utility and other critical industrial control software have already been shown to be possible -- and are capable of causing significant insured loss, he said. What's more, there has been an increasing trend in such attacks over the past several years.

During a later panel discussion, Wesson was asked to cite the worst scenarios keeping him up at night. His answer -- surface-to-air missile attacks on aircraft and other aircraft control vulnerabilities.

Al Qaeda also continues to be a threat, even as it struggles with setbacks such as the deaths of recent top leadership. While RMS has projected a reduced number of possible annual attacks in its terrorism outlook, that does not mean that Al Qaeda is going away anytime soon.

While the setbacks have weakened the group in recent years, Al Qaeda shows a remarkable ability to reinvent itself and opportunistically leverage new tactics, said Bruce Hoffman, professor of security studies at Georgetown University during a session titled "Patterns in Terrorism and Probable Impact: An Assessment of Al-Qaeda."

The killings of Osama bin Laden and Anwar al-Awlaki will not affect Al Qaeda?s abilities to carry out international violence as well as political advocacy and targeted recruitment of disenfranchised professionals.

"Profound challenges and potential new threats remain," said Hoffman, who noted that terrorism should be seen as a permanent fixture in the 21st century.

In a later session, Robert Muir-Wood, chief research officer, and Gordon Woo, catastrophist and lead architect of RMS' terrorism model, outlined some ramifications to U.S. terrorism risk arising from changes in Al- Qaeda's approach.

As the terrorism threat will mostly come from individual operatives with limited technical acumen, simple conventional attacks will remain the weapon of choice, they said. While such weapons have limited range, they can potentially cause significant property damage and inflict a number of casualties.

Smaller but still deadly plots that circumvent security measures, such as car bombs in metropolitan areas, are the more likely attack scenarios, they said.

Homegrown operatives have tended to show poor operational skill. To date, a majority of the homegrown terror plots have been crude attempts by operatives lacking the sophistication and experience needed to mount a successful macro attack in the country.

Despite the obstacles and technical challenges, Al-Qaeda and its affiliates continue to show interest in acquiring a chemical, biological, radiological or nuclear arsenal. This is mainly due to the potential for high-severity outcomes that conventional attacks cannot produce.

The possible collapse of the Bashar al-Assad regime in Syria could put chemical and biological weapons within closer reach of Al Qaeda, Hoffman noted during the conference, even as more skilled professionals are recruited at the local level.

Michael Kistler is director of model product marketing at RMS.

August 7, 2012

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