Terrorism models

Insurers and reinsurers can find terrorism risk hard to diversify and insure. Where the exposure is highest, so is the risk, and where the exposure is low, there is little risk. A single event can render an insurer insolvent, and the uncertainty around loss outcomes is high.

Moody's has drawn upon nearly 20 years of experience in terrorism modeling to create a suite of powerful analytical tools designed to assist in developing effective and profitable strategies for managing terrorism risk.

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What we do

Quantify macro-terrorism risk and gain insights to help facilitate risk selection, risk transfer, and capital management.

Improve portfolio diversification

Identify exposure concentrations within your portfolio using a database of global terrorist targets and accumulation tools that support multiple lines of business such as property, business interruption, workers compensation, life, and health.

Streamline regulatory reporting

Evaluate different terrorism scenarios, including Lloyd's Realistic Disaster Scenarios, and generate results necessary for regulatory reporting to rating agencies such as AM Best SRQ and government reporting, including the US Terrorism Risk Insurance Program (TRIP).

Gain greater insights into terrorism risk

Obtain a competitive advantage with a comprehensive solution that uses the same probabilistic framework as our natural peril models.

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Interested in learning more about our offerings? Our solutions specialists are ready to help.

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01 High-definition (HD) Probabilistic Terrorism Model
02 Terrorism Scenario Model
03 Exposure accumulation tools

01 High-definition (HD) Probabilistic Terrorism Model

High-definition (HD) Probabilistic Terrorism Model

Moody’s RMS™ HD Probabilistic Terrorism Model provides a comprehensive, high-definition probabilistic analysis of terrorism risk across the entire United States along with key cities in Belgium, Canada, Denmark, France, Ireland, Italy, Türkiye, and the United Kingdom; it is also available as a standalone model.

Developed using data from thousands of historical attacks, the model’s framework considers a stochastic attack set encompassing over 10,000 global targets and a range of over 30 attack types, including conventional methods as well as chemical, biological, radiological, and nuclear (CBRN) tactics. The model evaluates the probability of each scenario occurring, accounting for factors such as the possibility of simultaneous attacks and the frequency of such events to generate potential losses.

The model’s high-definition capabilities allow for explicit temporal considerations, helping insurers incorporate time-based contract terms and capture rarer events without an excessively large event set. It can also accommodate increased consideration for spatial correlation of events and swarm attacks as well as modeling secondary uncertainty.

02 Terrorism Scenario Model

Terrorism Scenario Model

Moody's RMS™ Terrorism Scenario Model is a deterministic model that can be used to overlay an attack footprint on any geographic location worldwide to quantify losses to a portfolio, accounting for the exposure as well as the vulnerability of the locations impacted by an attack.

Over 30 different attack modes — including conventional and CBRN attacks — can be modeled, helping users to examine “what if?” scenarios and identify the attack scenarios or targeted locations that pose the greatest threat to a portfolio.

Additionally, benchmark scenario events, such as a two-ton or five-ton bomb attack, are included to help users to manage losses according to acceptable loss thresholds.

03 Exposure accumulation tools

Exposure accumulation tools

Moody's has a range of accumulation management tools designed to help identify, monitor, and manage exposure accumulations that may exceed an organization's risk tolerance. These tools are available across multiple lines of business. The Target Database is one such tool that contains nearly 10,000 high-likelihood targets across 18 countries and can be used to identify the exposure of a single building — even if it has multiple associated addresses, as many buildings in urban areas do.

Moody’s proprietary spider accumulation algorithm can be used to identify a portfolio’s exposure concentration. Users are also able to monitor accumulations in and around user-defined locations worldwide, with the ability to set the range and percentage of exposed risk according to their needs.

News and views

blog

Jun 10, 2024

Moody's

Intelligent Risk Platform delivers new benefits for terrorism modeling

With a suite of terrorism modeling solutions, our probabilistic terrorism model has become the most widely accepted model in the industry, gaining credibility from experts in the field and collaboration with government agencies. It uses terrorism motivation and attack considerations, 3D blast modeling techniques, and consistent updates to the models reflective of the current landscape.

blog

Jun 23, 2023

Moody's

Introducing Terrorism HD Modeling on the Moody’s RMS Intelligent Risk Platform

Moody’s is excited to announce two major developments regarding our terrorism models with the release of our new Moody’s RMS Terrorism High-Definition (HD) Model and the integration of the Terrorism Scenario Model into the Moody’s RMS Intelligent Risk Platform™.

blog

Sep 10, 2021

Moody's

Twenty years since 9/11: living with an ever-present threat

Unlike a major earthquake, flood, or windstorm, the attack footprint of the World Trade Center plane strikes was very small — yet the insurance losses were massive. The record $47 billion in insured losses from the September 11 catastrophe created chaos for the industry. Twenty years later, we look back at the insurance industry’s response to September 11, along with the terrorism risk management and modeling that emerged. It was certainly a pivotal moment for the industry and catalyzed the pioneering development of Moody’s RMS terrorism risk models.