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RMS : Boston Marathon Bombing

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On Monday, April 15, two bomb explosions occurred in Boston, Massachusetts, near the finish line of the Boston Marathon. Both explosions appear to be the product of low-grade explosives detonated outdoors. The casualty toll stands at 3 fatalities, with 144 injured, 17 of whom are in critical condition. Many victims suffered severed limbs, shrapnel wounds, and lower-leg injuries. Most of the property damage appears to be within 10-20 feet of the explosions, and insured property losses are unlikely to exceed a million dollars. However the costs of business interruption as a result of security restrictions made after the event may be a larger source of insurance claims.

“The Boston marathon attack was the first high-profile successful act of terror in the U.S. since 9/11, but it should be seen as one of the dozens of terrorist plots launched against the U.S. homeland since then,” said Dr. Gordon Woo, catastrophist at RMS. “In particular, in September 2009, Najibullah Zazi intended to detonate backpack bombs on the New York subway killing the maximum number of people possible. With large quantities of explosives being increasingly hard to procure or improvise, the use of smaller sized lethal explosive devices has been the preferred attack mode in recent plots against the western alliance.”

Street events, like the marathon, are inherently vulnerable because while there are very large crowds public access is unrestricted

“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 U.S. and U.K. 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 Dr. Woo.

The point of attack, in the heart of Boston, is in accord with the escalated level of threat to central business districts of the principal cities. Major cities, such as Boston, and major international sports events provide very high profile targets. Such events attract large crowds ensuring that an explosion causes significant injury and loss of life while the media publicity of the event amplifies the terrorizing impact. High security inside sports arenas forces terrorists to look for softer targets outside: an informal event like the Boston marathon is substituted for an event such as the Superbowl or the Olympics. Additionally, deflection to a lower risk profile city, such as Boston, suggests that the perpetrators were concerned security would be higher in New York.

Dr. Woo added, “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 securitization 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.”

RMS, through its quarterly Terrorism Risk Briefings, has indicated the increased likelihood of smaller scale attacks as opposed to macro-terrorism attacks. This trend towards the use of smaller bomb sizes to circumvent security forces is anticipated by the RMS Probabilistic Terrorism Model.