Zealots, assassins and insurance companies

The face of the future?

When asked whether Jews should pay taxes to the Romans, Jesus is said to have answered that you should give God what belongs to God, and Cesar what belongs to Cesar. That can be seen as a reasonable separation of the material and the spiritual, but some members of the audience would have interpreted it as support from the Prince of Peace for their uncompromising hostility to the occupying army. For the Zealots, nothing in Israel belonged to Cesar, and they were prepared to free the country by any means necessary, including what we now call terrorist attacks. They failed, and it would be a thousand years before another terrorist sect left its mark on history, again in the Middle East, when the Assassins started to carry out attacks in full public view to reinforce their fearsome, fearless reputation. The Zealots and Assassins targeted individuals and the military. The politically-motivated killing of large groups of civilians was a French invention, when the revolutionary government used “la Terreur” to eliminate or intimidate opponents in the early 1790s.

Since then, this kind of state terrorism has killed millions, but when we talk about terrorists, it’s usually to refer to violent, politically-motivated non-state groups. In fact there is no internationally agreed definition of terrorism, although various attempts have been made since the League of Nations first tried and failed in 1937. Even so, it’s clear that some terrorist acts of recent years represent a new kind of terrorism judging by their aims, targets, agents, and means.

Traditionally, terrorism was the work of organised groups with identifiable political goals, and was used to attain a clearly defined objective, such as freeing prisoners. The new terrorism has declared open-ended war on the “Western system” and its values, citizens, organisations and institutions. Its targets are no longer the military or symbols of the state. Large numbers of civilians may be targeted.

Unlike traditional, nation-based terrorists, modern terrorists are difficult to localise. They do not need to rely upon permanent structures for financial, technical or logistical assistance. Networks such as al-Qaeda can link together numerous highly-autonomous units of varying size and composition. They may still enjoy the backing of states for which encouraging, using and sometimes even organising terrorism is seen as a way to gain diplomatic influence, or a low-cost, low-risk alternative to war.

The vast majority of terrorist acts are committed with conventional means, but critical infrastructures that rely on information and communication technologies offer a new kind of target. Last week, the CEO of the Federal Reserve Bank of Atlanta warned against “the potential for malicious disruptions to the payments system in the form of broadly targeted cyberattacks”. Cyberattacks offer a number of advantages: expertise is readily available; the benefits of a successful attack, in terms of damage inflicted, can be very substantial; the costs, in terms of terrorist lives, risk of capture and even funding, are limited; and a successful attack would gain worldwide publicity whereas failure would go unreported (unless governments and corporations develop a specific communication strategy based on reporting attack failures).

Terrorism in different forms will remain a key feature of conflicts in the coming decades and better understanding and assessment of the threat it poses is imperative. However, terrorism differs from most other types of risk in two ways that make its assessment difficult. First, its risks cannot be quantified using historical data, not least because of the deep changes they have undergone in the past years. Second, they are generated by human behaviour. In other words, the context of terrorism risk is one where damage is not caused by an outside event such as an earthquake or even an accidental human error, but by the deliberate action of persons resolved to exploit every breach in security, and who may be ready to sacrifice their lives doing so.

One of the characteristics of terrorism is that its objectives can be attained while leaving most potential victims untouched and even if most attacks fail. As one IRA member put it, “We only have to be lucky once, you have to be lucky every time”. All forms of terrorism are similar in this respect. States that use terror against their own citizens can’t arrest everybody, but everybody must feel that they might be arrested, so arbitrary imprisonment is a common weapon against dissent. Islamic terrorism has mostly killed Muslims in Muslim countries, but the Eisenhower Research Project calculates that it has cost the US alone $3.2 to $4 trillion for the War on Terror, while according to a report by the International Commission of Jurists’ Eminent Jurists Panel some countries resort to secret detention, imprisoning children and other actions that “undermine cherished values as well as the international legal framework carefully developed since the Second World War”.

Because of terrorists’ ability to continually change their tactics according to the opportunities and obstacles they face, the risk of attacks and the effectiveness of security systems built against them are continuously reassessed. The Second International Meeting on Terrorism Risk Insurance at the OECD on Wednesday will look at how the terrorism threat is evolving, whether organisations are anticipating this risk, and asking if current insurance solutions are adequate. We’ll report on the discussions later in the week.

Useful links

Terrorism Risk Insurance in OECD Countries

Reducing systemic cybersecurity risk

OECD work on insurance