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Cyberattacks, Terrorism Are Top Threats for UK

According to the United Kingdom’s recently unveiled national security strategy, cyberattacks and terrorism present the gravest threats to the country. Overall, the report identifies 15 “priority risks” — four of which are considered “tier 1” threats.

Tier One:
• International terrorism affecting the UK or its interests, including a chemical, biological, radiological or nuclear attack by terrorists; and/or a significant increase in the levels of terrorism relating to Northern Ireland.
• Hostile attacks upon UK cyber space by other states and large scale cyber crime.
• A major accident or natural hazard which requires a national response, such as severe coastal
flooding affecting three or more regions of the UK, or an influenza pandemic.
• An international military crisis between states, drawing in the UK, and its allies as well as other states and non-state actors.

Here are the top risks:

• International terrorism affecting the UK or its interests, including a chemical, biological, radiological or nuclear attack by terrorists; and/or a significant increase in the levels of terrorism relating to Northern Ireland.

• Hostile attacks upon UK cyber space by other states and large scale cyber crime.

• A major accident or natural hazard which requires a national response, such as severe coastal

flooding affecting three or more regions of the UK, or an influenza pandemic.

• An international military crisis between states, drawing in the UK, and its allies as well as other states and non-state actors.

Obviously, these are all very difficult perils to protect citizens, infrastructure and the economy against. And unfortunately, these emerging threats are growing at a time when Britain is least prepared to confront them given the national priority now assigned to “austerity measures” designed the cut spending.

The defense budget, for instance, is set to be trimmed by 8% over the next four years, leaving one Member of Parliament wondering how the country can revamp its strategy to keep citizens safe.

Conservative MP Bernard Jenkin, who is chairman of the Commons Public Administration Committee, said it was difficult to see how an effective National Security Strategy could be developed against the backdrop of cuts.

“We seem to be operating under the imperative of deficit reduction,” he said. “But, there’s very little in what’s being done now that reflects deep and sustained analysis about what sort of country we want to be in 10 or 20 years time.”

The Obama administration has also been highly critical of Prime Minister David Cameron’s defense spending cuts. Even the national security strategy itself admits that the country has a “security structure that is woefully unsuitable” for the modern threats it faces — a failing that is squarely blamed on the previous ruling officials.

The last Government took little account of this fact. Twelve years elapsed while the world changed almost beyond recognition. Abroad, our forces were sent into action without the equipment they needed, and on the basis of lamentable planning, and in more simultaneous conflicts than the Defence Review in 1998 had planned for.

At home, the machinery of Government failed to adapt to the new circumstances – lacking both the urgency and the integration needed to cope with the new situation.As a Government, we have inherited a defence and security structure that is woefully unsuitable for the world we live in today. We are determined to learn from those mistakes, and make the changes needed.

In an age of uncertainty, we need to be able to act quickly and effectively to address new and evolving threats to our security. That means having access to the best possible advice, and crucially, the right people around the table when decisions are made. It means considering national security issues in the round, recognising that when it comes to national security, foreign and domestic policy are not separate issues, but two halves of one picture.

To address this concern — at least somewhat — the government announced that it will provide an extra £500 million for cybersecurity that will be “focused on protecting key infrastructure and defence assets.”

We will see if that is enough to do the job — which also includes the below security challenges that the government has identified as “tier two” and “tier three” risks.

Tier Two Risks:

• An attack on the UK or its Oversees Territories by another state or proxy using chemical, biological, radiological or nuclear (CBRN) weapons.

• Risk of major instability, insurgency or civil war overseas which creates an environment that terrorists can exploit to threaten the UK.

• A significant increase in the level of organised crime affecting the UK.

• Severe disruption to information received, transmitted or collected by satellites, possibly as the result of a deliberate attack by another state.

Tier Three Risks:

• A large scale conventional military attack on the UK by another state (not involving the use of CBRN weapons) resulting in fatalities and damage to infrastructure within the UK.

• A significant increase in the level of terrorists, organised criminals, illegal immigrants and illicit goods trying to cross the UK border to enter the UK.

• Disruption to oil or gas supplies to the UK, or price instability, as a result of war, accident, major political upheaval or deliberate manipulation of supply by producers.

• A major release of radioactive material from a civil nuclear site within the UK which affects one or more regions.

• A conventional attack by a state on another NATO or EU member to which the UK would have to respond.

• An attack on a UK overseas territory as the result of a sovereignty dispute or a wider regional conflict.

• Short to medium term disruption to international supplies of resources (e.g. food, minerals) essential to the UK.

TSA to Begin Swabbing Hands of Passengers

commercial airplane

U.S. airports will now be randomly swabbing the hands of passengers to check for traces of explosive materials. You may be familiar with this technique as it was previously used with carry-on baggage of some passengers.

Soon now, though, travelers can expect to see the increased random use of ETD [explosive trace detection] technology in different areas, including checkpoint lines and at boarding gates. Officers may swab a piece of luggage or passengers’ hands, then use ETD technology to test for explosives. The swab is placed inside the ETD unit which analyzes the content for the presence of potential explosive residue. To ensure the health of travelers, screening swabs are disposed of after each use. Since it will be used on a random basis, passengers should not expect to see the same thing at every airport or each time they travel.

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This measure has been put into place in response to the attempted bombing of Northwest Flight 253 on Christmas day. Currently, the TSA has more than 7,000 ETD machines and has purchased 400 additional units with $16 million in federal stimulus money. The president’s fiscal 2011 budget calls for $60 million to purchase approximately 800 portable ETD machines.

But can’t terrorists wash off trace amounts of explosives with soap and water? Apparently not. The ETD can detect race elements “down to the nanogram — or billionth of a gram,” making it nearly impossible, no matter how many times hands are washed, to completely rid oneself of traces of explosives.

What exactly are the machines trying to detect? The official TSA list is classified. But it probably covers any commonplace explosive you can think of, including fertilizer, nitroglycerin (used in dynamite), C4, TNT, RDX, and PETN, the chemical used by Umar Farouk Abdulmutallab on Christmas Day.

Other security measurers are also being implemented in airports across the country. Backscatter x-ray and millimeter x-ray machines are currently being used in a handful of airports, while hundreds are in the process of being put into place by the TSA.

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Privacy groups, however, are up in arms about the technology, which is part of the reason they are not more commonplace in American airports.

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For more on this discussion, check out the March issue of Risk Management in which we feature an article titled “Airport Security: Privacy vs. Safety.”

Super Bowl Risk

All major sporting events pose some sort of risk — whether it’s unruly fans, unsafe venues, lack of security or all of the above. But there are a few sporting events that pose more risk than others — namely the Olympics, the World Cup and, of course, the Super Bowl. I was fortunate enough to get some feedback on Super Bowl risk from Chris Rogers, director of risk control for National Entertainment Group, a part of Aon Risk Services and Lori Shaw, managing director of sports/leisure for Aon Entertainment Group.

Of all the potential risks facing such a large event as the Super Bowl, what do you feel is the number one biggest risk on February 7th?
Without a doubt, the biggest risk by far is the “lone wolf” with explosives knowledge. It is the very quiet ones, without support from any organization at the time that presents the greatest challenge, simply because there is so little possibility for detection prior to their arrival on the scene. Plus, if they have the ability to put together an IED, this combination could be very catastrophic.
Do you feel there is more potential for risk before, during or after the game?
The highest risk would be during the game, primarily due to the fact that this is when there are the most people present and there is so much going on all over the stadium. The close second would be just prior to the start of the game when there are large crowds lining up waiting to get inside.
Lori Shaw, Managing Director – Sports/Leisure, Aon Entertainment Group
How are corporate sponsors and marketers managing the financial risks related to prizes and promotions?
Many corporations look to events such as the Super Bowl as a way to create impressions with consumers. Besides basic TV, advertising many look to specialized promotions and prize offerings to attract interest and support their marketing goals. This may mean offering product couponing and redemptions offers to drive consumers to their brands, arranging prize trips for consumers, and often times, offering the potential to win large cash prizes such as what Dorito’s is doing with its Dorito’s “Crash the Super Bowl” promotion. Often times, corporations will look to the Contingency Insurance market to provide unique and customized insurance products to protect their balance sheets from the volatility that these promotions can bring. Products such as overredemtion insurance, sponsorship liability, marketers liability, special event and travel accident coverage and prize indemnity policies can be crafted to appropriate transfer this type of potential risk.
How does the Super Bowl manage challenges such as professional liability? What types of insurance can the Super Bowl event managers and organizers obtain to protect themselves from the many potential risks that can occur during such a large event?
Planning for large events, such as the Super Bowl, start way before the “kick off” of the game. Local organizing committees have been working months, sometimes years, ahead of a large event to make all the necessary arrangements. Insurance coverages that are contemplated may include: General Liability, Auto Liability, Property, Directors & Officers, Terrorism, Event Cancellation (which can include weather related perils, communicable disease, and threats of Terrorism), Media Liability, Broadcast and Professional Liability for things like police, EMT’s, physicians, etc.

RMM: Of all the potential risks facing an event as large as the Super Bowl, what do you feel is the number one threat on February 7?

Chris Rogers: Without a doubt, the biggest risk by far is the “lone wolf” with explosives knowledge. It is the very quiet ones, without support from any organization at the time that presents the greatest challenge, simply because there is so little possibility for detection prior to their arrival on the scene. Plus, if they have the ability to put together an IED, this combination could be very catastrophic.

RMM: Do you feel there is more potential for risk before, during or after the game?

Rogers: The highest risk would be during the game, primarily due to the fact that this is when there are the most people present and there is so much going on all over the stadium. The close second would be just prior to the start of the game when there are large crowds lining up waiting to get inside.

RMM: How are corporate sponsors and marketers managing the financial risks related to prizes and promotions?

Lori Shaw: Many corporations look to events such as the Super Bowl as a way to create impressions with consumers. Besides basic TV advertising, many look to specialized promotions and prize offerings to attract interest and support their marketing goals. This may mean offering product couponing and redemption offers to drive consumers to their brands, arranging prize trips for consumers, and oftentimes, offering the potential to win large cash prizes such as what Doritos is doing with its Doritos “Crash the Super Bowl” promotion. Oftentimes, corporations will look to the Contingency Insurance market to provide unique and customized insurance products to protect their balance sheets from the volatility that these promotions can bring. Products such as overredemtion insurance, sponsorship liability, marketer’s liability, special event and travel accident coverage and prize indemnity policies can be crafted to appropriately transfer this type of potential risk.

RMM: How does the Super Bowl manage challenges such as professional liability? What types of insurance can the Super Bowl event managers and organizers obtain to protect themselves from the many potential risks that can occur during such a large event?

Shaw: Planning for large events, such as the Super Bowl, start way before the “kick off” of the game. Local organizing committees have been working months, sometimes years, ahead of a large event to make all the necessary arrangements. Insurance coverages that are contemplated may include: general liability, auto liability, property, directors and officers, terrorism, event cancellation (which can include weather related perils, communicable disease and threats of terrorism), media liability, broadcast and professional liability for things like police, EMTs, physicians, etc.

soccer fans

The Most Hazardous Countries for Business

It’s a dangerous world for business people, and it is well known that some areas of the world are definitely more dangerous than others.

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Maplecroft, a risk intelligence organization, has released its analysis of the 175 most dangerous countries for business. Its Global Risks Index (GRI) measures a combination of different risks that have an impact on global operations, supply chains and distribution networks of corporations.

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The GRI takes into account the following risks:

  • Terrorism
  • Conflict
  • Macroeconomic Risks
  • Rule of Law
  • Resource Security
  • Vulnerability to climate change
  • Natural Disasters
  • Human rights violations
  • Poverty
  • Risks from pandemics and infectious diseases

Without much surprise, Africa takes the cake for being home to the most dangerous countries in which to do business. The top four are:

  1. Somalia
  2. DR Congo
  3. Zimbabwe
  4. Sudan

Other notably dangerous countries include Afghanistan, Nigeria, Iraq, Bangladesh, Pakistan and Yemen. The report pointed to the most dangerous countries’ weak governance, internal conflicts and regional instability among the reasons  It’s also important to note that “several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.” The following map indicates regions of risk from low to extreme:

worldmap

The report also mentions countries that, although not highly ranked as dangerous, are critical to supply chains. Those countries include the Philippines, Indonesia and India.

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The United States, Canada and Australia remain low risk.