Islamist extremists remain the principal source of terrorism risk to the UK, with Daesh and al Qaeda associates the key threat actors; and likely targets crowded places, national infrastructure and police and military institutions and personnel.

This is according to the latest analysis from Pool Re, whose Terrorism Threat and Mitigation Report, released today, outlines the key themes and emerging trends in the broad spectrum of terrorist threats faced by the UK and Europe.

The report refers to the ‘industrialisation’ of terrorism by Daesh, which encourages individuals to use readily available weapons and cause mass casualties rather than inflict damage on infrastructure, and, it believes, is likely to continue.

Pool Re’s report predicts that attacks are likely to continue, the methodology behind them potentially wide ranging and, while the most frequent may be unsophisticated, attacks involving home-made Improvised Explosive Devices (IEDs) should not be discounted.

Meanwhile, a year after the murder of Jo Cox MP, the threat from Far-Right extremism continues in the UK. And the Dissident Republican threat to Great Britain remains substantial and is unlikely to reduce, although Pool Re believes aspirations to carry out an attack may currently exceed capabilities.

Modelling terrorism is challenging as the factors governing frequency and severity are not possible to determine with the same degree of accuracy as other perils, making the report a valuable tool when seeking to mitigate the risk of this evolving threat. To combat this, chief executive of Pool Re, Julian Enoizi, says its database and the factors it now considers will help underpin a more robust terrorism model.

"This data also illustrates the changing nature of the threat. Islamist extremists are motivated to inflict massive civilian casualties rather than damage to property. This represents a fundamental shift in the types of economic losses experienced,” he explained.

“The majority of terrorism insurance policies require physical damage to trigger a claim. This creates gaps in insurance coverage as recent terrorist events, whilst they have caused significant loss of life, have also resulted in severe disruption to business, and associated financial losses, but with minimal or no damage to commercial property."

Enoizi says that the low level of insurance uptake among SMEs and outside of London is among the limiting factors to the success of the insurance market in mitigating economic loss: "Pool Re has been working to educate small business and to fill this penetration gap since the attacks in Europe last year. Spurred on by the recent spate of UK attacks, intensive talks with both the insurance industry and the government are underway. Extending Pool Re’s cover requires a change in legislation, albeit minor. Combined with more affordable pricing as well as incentives designed to improve risk management, a change in underlying insurance cover is essential to enable businesses across the UK to better combat today’s threat and to safeguard future investment in our economy.”

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