CREDIT, POLITICIAL & SECURITY RISK BULLETIN | Brussels Attacks | April 2016. There will be an on-going requirement f
RISK FOCUS CREDIT, POLITICIAL & SECURITY RISK BULLETIN APRIL 2016
Brussels Attacks Following the tragic events that unfolded in Paris on 13 November 2015, we released a Risk Focus bulletin commenting on the extent to which the insurance industry is fully meeting our clients’ needs. We outlined that organisations can do little to prevent future events from occurring but they can take a proactive approach to resilience, which should include an effective crisis management plan, access to expertise, robust physical security and appropriate insurance. We highlighted the evolving terrorist threat in Europe, with the number of attempted attacks growing steadily in recent years, along with the increasing number of arrests on terrorism charges. The tragic attacks on 22 March 2016 in Brussels reinforced this perception. It is likely that further co-ordinated attacks inspired or organised by so-called Islamic State (IS) will be carried out in Western Europe, targeting crowded places with a potential for mass civilian casualties.
The attacks in Brussels involved
in Europe have targeted transportation
daily, whilst London Waterloo train
improvised explosive devices (IEDs) at
hubs including airports, railway stations
station alone is used by 100 million
multiple transport hubs across Brussels.
and metro stations. They have highlighted
passengers annually. Such attacks
Following the Paris attacks in November,
the requirement for increased security
have demonstrated their effectiveness
and a number of other marauding attacks
measures across these sites in spite
at gaining media attention and their
involving small arms and small explosive
of the inevitable inconvenience to
effectiveness at shocking the public and
devices, we predicted that we would
passengers and the expense. 10 million
increasing suspicion of resident Muslim
see more of the same. Recent attacks
passengers use the French SNCF
and immigrant populations.
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CREDIT, POLITICIAL & SECURITY RISK BULLETIN | Brussels Attacks | April 2016
There will be an on-going requirement for security services to interdict and disrupt likeminded groups and individuals as
Number of people killed in terrrorist attacks in selected countries (1970 - 2015) United Kingdom
long as: 0
45
90
Spain 135
• existing networks are disrupted • trained individuals continue to return
'1970
from fighting the Islamist cause in
'1971
Syria, Iraq, Yemen, Libya, etc.
'1972
• residents in the West continue to be radicalised by events abroad and experience a sense of alienation and disenchantment with Western society • large numbers of immigrants continue to flow into Europe with the potential to harbour those with terrorist intent or to be radicalised once they have arrived. It is possible that the events in Brussels are in response to counter terrorism operations recently conducted in the city. It is expected that such attacks will continue with increasing regularity until those with the capability and intent are disrupted and those enabling factors given above are counteracted. It is likely that attacks will be carried out using military-standard firearms, blades, vehicles and small suicide IEDs. France and Belgium are considered most at risk, followed by the Netherlands, Germany, UK and other Western European countries.
'1973 '1974 '1975 '1976 '1977 '1978 '1979 '1980 '1981 '1982 '1983 '1984 '1985 '1986 '1987 '1988 '1989 '1990 '1991 '1992 '1993 '1994 '1995 '1996 '1997 '1998 '1999 '2000 '2001 '2002 '2003 '2004 '2005 '2006 '2007 '2008 '2009 '2010 '2011 '2012 '2013 '2014 '2015 Source: JLT proprietary incident database
Italy 180
France 225
270
Germany 315
Belgium 360
405
450
www.jltspecialty.com | Brussels Attacks
EVENT SUMMARY:
3
TIMELINE OF SELECTED EUROPEAN ATTACKS, 2015-2016
• At approximately 0800hrs on 22 March 2016, two bombs exploded at Zaventum Airport (BRU), Brussels. The explosions occurred at the counter
Wednesday 7 January 2015
for American Airlines and Brussels Airlines. One was a suicide bomber and the other was an IED. It is unclear whether these companies were specifically
7th Jan
2015
French-born brothers Said and Cherif Kouachi attack the Paris offices of Charlie Hebdo magazine, using firearms to kill 12 people.
targeted or whether they were the most crowded areas within the airport. Security measures for departures from Brussels to the US were increased
Friday 9 January 2015
in the weeks preceding the attacks due to perceived security threats. • Reportedly, undetonated suicide belts were identified
9th Jan
2015
French-born Amedy Coulibaly kills 4 people in a kosher supermarket south of Paris using firearms.
at the airport. • An explosion also occurred at Maalbeek metro station, which is near the EU Commission and
14-15 February 2015
Council headquarters. • It is unclear how many casualties resulted from these explosions, however at least 32 people have been
14th-15th Feb
2015
Three people killed by Danish-born Omar Abdel Hamid el-Hussein in three separate firearms attacks in Copenhagen, Denmark.
killed and over 300 people have been injured. • The terrorist threat in Belgium continues to be elevated in airports, Anvers port, train stations and
Thursday 24 April 2015
metro stations. All in and out-bound flights to BRU airport continue to be diverted or cancelled. The London-Brussels Eurostar service was suspended
24th Apr
2015
French-born Mehdi Nemmouche kills four people in a firearms attack in the Jewish museum in Brussels.
on 22 March, although services have now fully resumed and a partial service has been resumed on the public transport system in Brussels. Security
Friday 13 November 2015
measures have been tightened along the DutchBelgium border and security has also been tightened at Holland’s Rotterdam, Eindhoven and Schipol
13th Nov
2015
Eight terrorists kill 130 people and injure over 300 in multiple, co-ordinated firearms, grenade and suicide vest attacks across Paris.
airports as well as France’s Roissy-Charles-deGaulle Airport. • These attacks follow the arrest on 18 March of
Tuesday 15 March 2016
Salah Abdeslam in Molenbeek district, Brussels. Abdelslam is identified as the final surviving participant of the November Paris attacks. The arrest
15th Mar
2016
of Abdelslam will lead to an improved understanding
Algerian gunman, Mohamed Belkaid, killed by security forces in counter-terrorism operation in Forest district, Brussels. Two suspects escape.
of the planning of the Paris attacks, as well as IS’s operational methods and structure. Improved intelligence is required in order to prevent further
Friday 18 March 2016
attacks. Attacks are most likely to occur against soft targets with maximum potential for civilian casualties, leveraging small arms and explosives.
18th Mar
2015
Key suspect in the Paris attacks, French national Salah Abdeslam, shot and detained by police in Molenbeek municipality, Brussels.
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CREDIT, POLITICIAL & SECURITY RISK BULLETIN | Brussels Attacks | April 2016
Timeline of Brussels Attacks Tuesday 22 March 2016
07:58 Two explosions occur in the departure hall Terminal B of Zaventum airport. CCTV footage showed three attackers, including Ibrahim el-Bakraoui and Najim Laachraoui. IEDs, concealed in suitcases, were used in the attack. 09:11 Third explosion occurs at Maelbeek station, Rue de la Loi. Attacker identified as Khalid el-Bakraoui. 10:00 Public transport system, including trains, trams and buses, are shut down. 15:20 IS claims responsibility for the co-ordinated attacks. 17:00 Multiple raids commence in Schaerbeek municipality following testimony by taxi driver who collected the three airport attackers from their apartment.
Wednesday
Police raid house in Anderlecht municipality, Brussels.
23 March
German police detain suspect in Giessen area.
2016 Thursday 24 March 2016
Coordinating Unit for Threat Analysis (OCAM) lowers the nationwide terror threat level from 4 (‘serious and imminent’) to 3 (‘possible and probable’). French police arrest a suspect, Reda Kriket, in Argenteuil, Paris. Six people arrested in Schaerbeek municipality, Brussels. Suspect arrested by German police in Dusseldorf area.
Friday 25 March 2016
Saturday 26 March 2016
Sunday 27 March 2016
Belgian police arrest three suspects in the Saint Gilles, Rue de Belgrade and Avenue Rogier areas of Brussels.
Algerian suspect wanted in connection with Brussels attacks, Djamal Eddine Ouali, arrested in Salerno, Italy.
Nine suspects detained in thirteen security operations in Brussels and towns of Mechelen and Duffel. Four suspects, including a French citizen, detained by Dutch counter-terrorism police in Rotterdam.
www.jltspecialty.com | Brussels Attacks
BELGIUM – THE EUROPEAN RECRUITMENT BASE FOR ISIS
5
remain in place. The response to the Belgian attacks has been region-wide and therefore other European cities will be similarly
Reportedly, an estimated 450 Belgian nationals have joined
impacted.
jihadist groups in Syria and Iraq since 2011, thought to be the
An enhanced police and military presence will continue across
highest number per capita of any European country. Meanwhile,
Brussels and the surrounding regions in the mid-term and
1,200 peopled travelled from France to Iraq and Syria.
there will be continued raids over the coming weeks which will
Numerous attacks have been linked to the extremist network
similarly cause limited transport disruptions. The Molenbeek and
in the Molenbeek district, Brussels, including the Paris attacks.
Schaerbeek districts will continue to be the focus of authorities.
It is unclear whether the dismantling of the Brussels-based
There is a likelihood of further memorial demonstrations near
network will reduce the likelihood of further attacks in Belgium,
Place de la Bourse and in central Brussels as well as anti-IS
France, and other countries, or whether it will prompt similar
protests, with the potential to turn violent, which may precipitate
terror networks to become active and pose a threat to Europe.
a forceful police response. Furthermore, there is the on-going possibility of Muslim cultural centres amongst other community
IMPLICATIONS AND RISK OUTLOOK
sites being targeted in retaliation.
Although a series of exceptional security measures are being
The tragic events in Brussels continue to pose significant
maintained by the Belgian Interior Ministry, it is unlikely that
questions for risk and insurance professionals. Insurance on its
business operations will be significantly affected moving
own does not fully address the threat and a risk management
forward, although there will be limited on-going travel
approach is required. Organisations should have a multifaceted
disruptions. In addition, border controls will continue to be
approach to resilience, which includes an effective crisis
tight in the mid-term. 1,600 police officers were dispatched
management plan, access to expertise, robust physical security
to Belgian border crossings on 22 March and will indefinitely
and appropriate insurance.
ECONOMIC COSTS OF GLOBAL TERRORISM - SOURCE JLT 60 52.90
51.51 50
USD Billion
40 32.92 30
20.44
20
16.96
15.78 13.4 10
10.99
11.07
2004
2005
14.74 12.00
12.31
2010
2011
7.65 5.42
4.93 0 2000
2001
2002
2003
2006
2007
2008
2009
2012
2013
2014
Source: Institute for Economics and Peace
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CREDIT, POLITICIAL & SECURITY RISK BULLETIN | Brussels Attacks | April 2016
JLT Specialty Limited provides
INSURANCE IMPLICATIONS
insurance broking, risk management
The Brussels bombings are likely to confirm that insurance continues to absorb only
and claims consulting services to
a portion of the economic losses from recent attacks and raises the question whether
large and international companies.
our clients’ people risks and business interruption risks are sufficiently protected.
Our success comes from focusing on sectors where we know we can make the greatest difference – using insight, intelligence and imagination to provide expert advice and robust - often unique - solutions. We build partner teams to work side-by-side with you, our network and the market
The evolving nature of the risk requires (re)insurers to respond with innovative products that are relevant to clients’ risk transfer needs. The economic impacts resulting from recent terrorist attacks are insufficiently covered by the insurance and reinsurance markets, which have been slow to respond to evolving risk dynamics. Indeed, the scope of insurance and reinsurance coverage has remained mostly unchanged in recent years despite the economic cost of global terror attacks hitting USD53 billion in 2014.
to deliver responses which are
There is therefore a pressing need for new and comprehensive products to be created
carefully considered from all angles.
to protect against all potential terror-related impacts, including risks to people, damage
As one of the world’s strongest credit, political and security risks teams we help banks, commodity traders and corporations to understand, mitigate and transfer the effects of
to brand and reputation and malicious cyber attacks or cyber terrorism. This can be done either through the development of holistic solutions or, more likely in the short term, a suite of products that plug existing gaps. Reinsurers have a vital role to play in delivering such new products. This will bring opportunities for carriers to generate new business and premiums.
political and country economic risk,
Any long-term solution will also realistically require the involvement of global terror
counterparty (credit) risk, political
pools as well as private risk carriers, with pools potentially taking on more systemic
violence and kidnap & ransom.
risks and the standalone market providing broadened coverage and new products to reflect the prevailing threat that exists today.
CONTACTS Ruth Lux Senior Consultant, CPS, JLT Specialty Limited +44 (0) 20 7886 5409
[email protected]
TERRORISM REINSURANCE AND INSURANCE POOL (TRIP) Many losses suffered from the Brussels attacks will be covered by Belgium’s TRIP (which was set up in February 2008, following the enactment of the Terrorism Act in 2007) with minimal impact to the broader insurance and reinsurance market. In Belgium, terrorism coverage is required on multiple lines of insurance including motor vehicle third party liability, life insurance, health insurance, hospitalisation insurance, fire insurance (simple risks) and workers’ compensation insurance. Loss of life and personal injury will likely be the primary cause of loss, with commercial property damage also prominent. Further information on this will emerge in the coming weeks. TRIP provides up to USD 1.12 billion of cover. While the scheme is not compulsory, over 95% of insurers operating in Belgium are members. In products where terrorism
JLT Specialty Limited The St Botolph Building 138 Houndsditch London EC3A 7AW
cover is optional, the exclusion of such cover must be stated explicitly.
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This publication is for the benefit of clients and prospective clients of JLT Specialty Limited. It is not legal advice and is intended only to highlight general issues relating to its subject matter but does not necessarily deal with every aspect of the topic. If you intend to take any action or make any decision on the basis of the content of this bulletin, you should first seek specific professional advice.
