Boston bombing likely to significantly impact terrorism and sporting markets

Furthermore, the bombings represent an escalated level of threat to the central business districts of the main US cities and have elevated the risk of attacks from Improvised Explosive Devices (IEDs), warn catastrophe modelling firms and intelligence firms. Although property losses from the event will be small fry and are unlikely to exceed $1m, the cost of business interruption as a result of security restrictions made after the event may be a larger source of claims, said RMS. On Monday two bomb explosions occurred in Boston, Massachusetts, near the finish line of the city's annual marathon.hideBoth explosions appear to be the product of low-grade explosives detonated outdoors. The casualty toll as of Wednesday toll stood at 3 fatalities, with 144 injured, 17 of whom are in a critical condition. Many victims suffered severed limbs, shrapnel wounds and lower-leg injuries. Most of the property damage appears to be within 10 to 20 feet of the explosions. "The insurance of sports events is likely to be impacted by the Boston marathon bombs. The shortage of terrorism insurance cover in the years after 9/11 led to the securitisation of the cancellation risk of the 2006 FIFA World Cup. So while the property insurance loss is small, the Boston marathon bombing may well have a significant influence on the terrorism insurance market," said Dr Gordon Woo, a catastrophist at RMS. According to Excusive Analysis' Head of North America Forecasting, Alexia Ash, the bombings have raised the risk posed from certain terrorist attacks in the US. "We assess that the risk of Improvised Explosive Device (IED) and shooting attacks against crowds of individuals and government assets is elevated. The increase in security, not just in Boston but in other major cities, will however mitigate the risk of further attacks in the coming days," she said a report. "The scale and nature of the attack is consistent with our assessment of the intent and capabilities of the terrorist threat in North America: either Sunni-extremists looking to cause mass casualties or far-right domestic groups and individuals in protest against the government," Ms Ash continued. RMS, through its quarterly Terrorism Risk Briefings, has previously indicated the increased likelihood of smaller scale attacks as opposed to macro-terrorism attacks. This trend towards the use of smaller bombs to circumvent security forces is anticipated by the RMS Probabilistic Terrorism Model. Street events, such as the Boston marathon, are inherently vulnerable because while they attract very large crowds, public access is unrestricted, noted the modelling firm. High security inside sports arenas forces terrorists to look for softer targets and thus an informal event like the Boston marathon is substituted for an event such as the Superbowl or the Olympics, it added. Additionally, deflection to a lower risk profile city, such as Boston, suggests that the perpetrators were concerned security would be higher in New York, it continued. "Terrorism risk is best mitigated by counter-terrorism forces interdicting plots before terrorists move to their targets. Fortunately, this happens with more than 90% of US and UK plots. However, plots involving a small number of operatives, such as seems to be the case with the Boston bombing, are the most difficult to prevent. Terrorism attacks remain a very real threat; there have not been larger attacks only because of the success of plot interception," said RMS' Dr Woo. "The Boston marathon attack was the first high-profile successful act of terror in the US since 9/11, but it should be seen as one of the dozens of terrorist plots launched against the US homeland since then," he added. According to catastrophe modelling firm AIR Worldwide, the blasts occurred within 13 seconds of one another near the race finish line, which is in the heart of Boston's Back Bay neighbourhood. The first blast occurred a few hundred feet short of the line while the second was 550 feet farther back along the course. According to AIR, terrorists often seek targets that achieve the greatest impact, and not only in terms of harm and destruction. They may seek out symbolic sites or activities that represent an aspect of culture that they wish to disrupt or destroy. The Boston marathon is both iconic and popular, said the modelling firm. It takes place on Patriots' Day, a Massachusetts holiday that commemorates the first battles of the Revolutionary War, which took place in Lexington and Concord. This year, the race also coincided with 'tax day', on which federal tax returns are due for the majority of Americans. It also inspires rage among anti-government extremists. However, officials say it is too early to determine whether the attack was the work of foreign or domestic groups, or of a 'lone wolf', as in the case of a similar attack at the 1996 Summer Olympics in Atlanta, Georgia. The Pakistani Taliban has denied any involvement. The bombs used in Boston this week were likely small, portable devices that were by all accounts crudely constructed, added AIR. Early reports of the devices being packed with ball bearings (BBs) have been discounted by federal law enforcement officials. They now believe the bombs were placed near or in metal garbage bins and the blast created small metal fragments which acted as shrapnel. While the bombs were not as powerful as more sophisticated devices, they seem to have been designed to inflict harm to people rather than buildings, said AIR. The IED attacks were likely intended to cause mass casualties rather than aimed at specific individuals or property, according to Exclusive Analysis' report. "The scale of the attack, coupled with the fact there has been no claim of responsibility, indicates that this was likely the work of an individual or a small group. There is no evidence that this was a suicide attack. The incident demonstrates that the individual or group responsible has achieved effective operational security and developed the capability to construct several small but effective IEDs," said its author, Ms Ash.

Boston bombing likely to significantly impact terrorism and sporting markets

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