Risk Modelling
We collaborate with our Risk Awareness team, academia, Government and other experts to build bespoke terrorism risk models that enable us to evaluate, quantify and price terrorism risk.

 Risk Modelling Services

  • The expertise to build and deploy modelling tools and techniques that can be adopted by Members, (re) insurers and the capital markets to inform their view of terrorism risk and how to price it
  • Unique insight and technological advances. With the increased confidence in terrorism modelling we help provide the foundation for private market capacity to grow

For many years, the lack of a mainstream model to estimate the severity, and especially the frequency, of terrorist attacks was a major barrier to entry for the private market. Technological advances, however, have led to a re-appraisal of the possibilities, and our team have collaborated to create:

  • Computational Fluid Dynamic (CFD) scenario modelling. Using a combination of vendor software and  academic institutions such as Cranfield University and Cambridge Centre for Risk Studies, alongside industry experts such as Guy Carpenter, we have developed innovative capabilities that have already significantly improved the dexterity of our terrorism modelling
  • Models which allow us to more accurately quantify not only conventional terrorism, such as explosives and firearm attacks, but also CBRN attacks.

The new paradigm these models represent was demonstrated in February 2019, when they were the decisive factor behind Pool Re’s placing of a historic £75 million ILS. Complementing what is already the world’s largest terrorism retrocession placement globally, the ILS was the first bond to exclusively securitise terrorism risk, and just the second to be written out of London following the government’s efforts to drive competition with traditional ILS strongholds such as Bermuda.

Read our latest Risk Modelling resources

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