Pool Re reacts to ‘major’ threat of nuclear and radiological attacks

“The economic impact could be in the order of tens of billions of dollars if a terrorist were to get their hands on a nuclear or radiological weapon and detonate it in a major city,” says Andrew Bieniawski, vice president for material security and minimisation at NTI.

It poses a huge threat to major cities worldwide and the accessibility of materials is much greater than one might think, Bieniawski notes.

Radiological materials, such as Caesium-137 are located in more than 150 countries around the world, for example in blood irradiators in hospitals, whereas nuclear materials have been reduced to 25 countries.

Conventional forms of attack such as through the use of a firearms or bladed weapons have recently caught the headlines.

As a result, the lower-probability threat of a chemical, biological, radiological and nuclear (CBRN) attack could easily be swept under the rug.

Not at Pool Re, which decided to team up with NTI to gain more knowledge about a potential CBRN attack.

NTI has been working with Pool Re to develop a deterministic terrorism model for CBRN attacks in the UK, which will look at how much a certain type of event will cost if it happens, and wants to raise awareness of this looming threat.

Reflecting upon the 2016 Nuclear Security Summit held in Washington, Bieniawski says: “Nuclear and radiological terrorism remain one of the greatest threats to global security, and that threat is constantly evolving.”

Whether or not the threat of an attack in the nuclear and radiological space has been getting immediate attention or the attention that it deserves is a matter for dispute, Lord Des Browne of Ladyton, vice chairman of NTI, tells Intelligent Insurer.

However, Browne says that there are developments happening across the world that suggest this risk is rising up, and there is incredible evidence that terrorist organisations such as Islamic State are looking to acquire and use radioactive material in a dirty bomb, and have communicated this intention on numerous occasions.

For example, in 2016 following the series of bombings in Brussels, the Belgian authorities discovered that terrorists were monitoring an employee at a highly enriched uranium reactor that also produce medical isotopes for a large part of Europe.

And in 2014, when ISIS had taken over the city of Mosul, Iraq, they had taken the Caesium-137 that was in the blood irradiators in hospitals. This was a message in terms of terror that they were going to use that radiological device at some point in future, says Brown.

Another example can be seen in the case of Anders Breivik, the Norwegian terrorist. When Breivik was arrested and his home was searched, his manifesto uncovered his intention to collect radiological material and use it in a dirty bomb.

The impact
Regardless of the probability of different types of attack, terrorists are getting more creative in their methodology of attack.

To gain a better understanding of the impact a dirty bomb might have in London, Browne draws similarities to the IRA bombings in the city in the past.

“The IRA bomb in the city of London used a lot of fertiliser, several thousands of pounds worth, and resulted in billions of pounds worth of damage. And it was a simple explosion with no contamination,” he says.

The place affected had to be significantly secure as well as all the buildings checked to making sure they hadn’t been damaged. All the broken glass had to be repaired and all the computer that went out had to be replaced.

More importantly, Browne says, is that there was a lot of security put in place to reassure people working in the city that it was a safe place to work again.

However, if the attack involved Caesium-137, and it had dispersed in the same area in a powder form, the damage would have been much more significant, according to Browne.

He adds: “Because of its chemical nature, the caesium bonds with the material of the buildings. So to what degree do you have to demolish or remove the claddings from these buildings? How long would it take you to satisfy the people who work in the city of London that this environment was no longer a cancer risk in the long term?”

And the potential damage caused will not just be a couple billion dollars.

While one would hope the explosion itself would not cause many human casualties, Browne says that it would cause a significant disruption of a way of life and longer-term casualty if people are exposed to the radiation, for example developing terrible cancers.

Risk mitigation and response
With the potential impact from this type of risk being as great as it is, both Pool Re and NTI have said that if there are steps that can be taken to mitigate or to remove the risk from the likes of Caesium-137, then it is a wise thing to do.

In the case of domestic terrorist Breivik, Norway had responded by removing all Caesium-137 from the blood irradiators in order to ensure it was not there to be taken and therefore eliminated that particular element of the risk.

Similar action has been taken in countries across the world to permanently reduce the threat.

“France has done the same thing between 2006 and 2016 to remove the isotopes,” says Brown.

“Japan is working on that too. We are also working with the city of New York to remove the isotopes from blood irradiators in their hospitals. We've done it already in a hospital in Atlanta. We are working together with the governor of California, where they have 100 hospitals that have these material, which are to be swapped out for other technologies.”

Improving security at hospitals or all together removing the material it if is not necessary – making use of other technologies that don’t use the isotope – would both be solution for mitigating the risk, says Steve Coates, chief underwriting officer at Pool Re.

While the removal of this threat entirely would be an ideal scenario, responding to this evolving threat in terms of modelling is now more important than ever, according to Coates.

“Catastrophe modelling always starts off by modelling the worst thing that can happen, irrespective of how likely they are to happen,” says Coates.

“We are looking at what the worst things that could happen to our exposure and how much would they cost, and then we can start to think of how likely they are – and hopefully they aren't very likely and they'll never happen, but at least if they do, we'll have an idea about how much it might cost and might have been able to help our policyholders in mitigating their effects.”

Coates, with regard to the new terrorism model being developed, believes there is useful work to be done in both understanding the risk in terms of pricing it and offering cover, but also in helping policyholders in both understanding and potentially mitigating against it as well.

And from a mitigation perspective, Coates says, while there are a lot of people who can take action in terms of improving the security of premises or removing radioactive material, to a lot of people that doesn’t make a difference, because they’re next door or across or down the road.

“They're going to be equally affected by an event that is nothing to do with them. So it's all about business continuity planning and disaster recoveries,” Coates says.
While these people and businesses may not have any control over what’s happening, they do have some control over how their business might respond afterwards.
Pool Re’s terrorism modelling is on target to be finished by the end of the year, and the work with NTI will help validate a lot of the algorithms and assumption made within the model.

Coates says: “From our perspective it’s helping people to understand the threat so they can make a number of decisions, but one of which is, whether they buy insurance against terrorist events - which is an optional choice in the UK. We want people to make an informed choice.”