Zamawang F Almemar, and P Andrew Karam, PhD, CHP, reveal an actuarial approach to a CBRN insurance policy


Measure for measure


T


he definition of WMD as published in the US Code of Federal Regulations1


includes all the


agents that fall into the CBRNE category. For the purposes of this paper, we are expanding the definition to include the deliberate and malicious use of these agents in such a way as to cause mass casualties, mass disruption, or to inflict massive societal and/or economic cost to the target. The American Academy of Actuaries in its report from the terrorism insurance implementation working group stated: “CNBR weapons have the potential to cause widespread casualties and to contaminate property over very large areas including whole cities. These weapons can be designed to cause large numbers of fatalities, inflict maximum terror, and damage the economy. Residual effects would likely make rehabilitation of property impossible without very extensive and costly cleanup”2


. Terrorist organisations


increasingly resort to unconventional means of causing mass disruption. Recently, terrorist groups have


attained the potential capability and made known their intent to use WMD. Some terrorist organisations (eg ISIS and al Qaeda)3


have researched,


developed and/or deployed WMDs. This type of terrorism has significant implications for national security policymakers and decision makers who must accept that it is impossible to protect everyone from every conceivable type of attack at all times. In addition, we note that the threat


of WMD use by both state and non-state actors has become a reality. While terrorism has been present in human


society throughout recorded history, the capability to create massive damage, previously reserved for nation states, is now available to smaller groups, including non-state, and transnational actors. Their capability and evident determination has captured the attention of the public, the military, law enforcement, first responders and the intelligence community. Potential target nations have taken several approaches to forestall WMD terrorism. For example, the Securing the Cities programme4


has invested well over $100


million to detect and interdict the infiltration of radiological and nuclear weapons into several major US cities. An attack involving WMD against any


major metropolis has the potential to cause horrific damage and large scale loss of life. Even so, nations including the US do not have unlimited resources or capability to guard against every type of terrorist event. There is wisdom in critically assessing the likelihood of potential WMD attacks of varying scale to properly allocate the necessary funding and resources according to policy leaders’ levels of risk tolerance as it relates to protecting their populations. The analysis of threats to national


security of various types and scale of WMD should be a critical part of government’s approach to resourcing effective countermeasure infrastructure. Scientists and epidemiologists, for example, have assessed the likelihood of bioweapons usage and the associated risks and threats to national security. Such research analyses should be implemented by government for the full spectrum of CBRNE threats5


. There are clear parallels between the


decisions that governments must make in trying to thwart terrorist attacks and the decisions that, for example, homeowners and insurance companies must make in trying to safeguard their property investments. Homeowners insure against catastrophic loss, but would probably not pay for a policy to cover repairs to a leaky sink or a soiled carpet. Similarly, investing national resources to prevent and recover from the effects of a nuclear attack is an appropriate choice for national policymakers, but what level of protection is warranted to guard against non-state actor developed and employed chemical or biological weapons6


, or


against a radioactive attack. At the American Academy of Actuaries, experts assist the public and policymakers by providing actuarial advice on risk and financial security issues, however there is still much that needs to be done to assist government with WMD and CBRNE terrorism countermeasures and risk management7


. In the first part of this paper, we


discuss some of the factors that must be considered in determining how much to spend on WMD ‘insurance’ and an actuarial semiquantitative methodology for evaluation. In the second part we briefly discuss how this information might be incorporated into a rational and consistent counter WMD (cWMD) policy.


Methodology - a problem solving approach Consider a homeowner deciding whether or not to purchase a given insurance policy. If the person is considering the matter rationally they will realise that


CBRNe Convergence, Indianapolis Motor Speedway, Indiana, USA, 6 - 8 Nov 2017 www.cbrneworld.com/convergence2017 50 CBRNe WORLD June 2017 www.cbrneworld.com


CBRNeWORLD


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68