Terrorist attack on extraction companies likely low, cyber risk increase as refining process advances
April 28, 2017 by Angela Stelmakowich, Editor
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PHILADELPHIA – Resources extraction industries are certainly not alone in facing cyber risk, but the risk of a related terrorism attack would most likely be higher later in the refining process, suggested Christof Bentele, head of global crisis management for Allianz Global Corporate & Specialty (AGCS).
For the base metals and oil and gas industries, cyber risk at the extraction stage is low, Bentele noted in an email to Canadian Underwriter this week during the RIMS 2017 Annual Conference & Exhibition in Philadelphia.
“But as these products are refined, the cyber risk becomes more prevalent as the process becomes more complex and there are more moving parts which can be affected,” he explained. “Naturally, it is at this stage that any terrorist would focus their effort as the effects could be far more devastating.”
Christof Bentele, Head of Global Crisis Management, Allianz Global Corporate & Specialty
For Canadian natural resources companies operating abroad, Bentele suggested that exploration activity most probably does not expose Canada to terrorist attack.
Still, “it does expose companies operating in this arena to protests and malicious attacks from the people affected by the exploration, or from environmental interest groups which see the explorations as an attack on the environment,” he noted.
Globally, Bentele said, the evolution of terrorism is bringing with it new forms of attacks and new motivations that may demand a fuller view of related risk and protection.
“Terrorist organizations have added more strings to their bow or increased their arsenal of destruction by opening new fronts by which they could attack their adversaries,” he commented.
The traditional ways in which terrorism organizations operate have not been left behind – these persist in certain parts of the world, including Iraq, Pakistan and Afghanistan.
“The evolution is more easily evidenced” in the West. In Western Europe, for example, high-frequency, low-complexity attacks in places such as Paris, Nice, Berlin, London and Stockholm have employed vehicles, firearms or a combination of the two to focus on civilian casualties rather than property damage, noted Bentele and Srdjan Todorovic, head of AGCS’s terrorism regional unit, London.
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“Although these cases show the risk in Europe, and are particularly linked to Islamic extremists, this is not the only type of risk which we face in Europe and in Canada,” Bentele and Todorovic pointed out.
“Far right and populist sentiment is also on the rise as a reaction to the radical Islamic terrorism, which is often in the news,” they added.
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Motivation is also changing. Some earlier terrorist groups in the United Kingdom, Europe and Colombia were looking to join the mainstream political landscape, opting to target in their attacks government and state apparatus to send their messages.
Now, however, “Islamic State, Al Qaeda, Boko Haram, Al Shabaab and other such groups are the new breed of irrational terrorists without a clear nucleus, focus or vision, hell-bent on killing people instead of winning any hearts and minds,” Bentele noted.
People “are quickly becoming accustomed to the new norm we face, which is an increasing number of smaller incidents which will cause casualties,” he suggested.
“We do have to be careful not to fall into a trap of classifying every incident of murder, executed with a vehicle or handgun as ‘terrorism’ when we do not know the motivations of these individuals,” Bentele cautioned.
The insurance industry is looking to meet client need in light of the changing environment. “This is particularly prevalent as we better understand the insured’s exposures from past incidents of which they have faced directly or indirectly,” he said.
“New products are being developed and existing coverages tweaked to be fit for purpose,” he added.
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