insurance against terrorism

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CHAPTER- 1

TERRORISM

Terrorism is not new, and even though it has been used since the beginning of recorded history

it can be relatively hard to define. Terrorism has been described variously as both a tactic and

strategy; a crime and a holy duty; a justified reaction to oppression and an inexcusable

abomination.

Terrorism has often been an effective tactic for the weaker side in a conflict. As

an asymmetric form of conflict, it confers coercive power with many of the advantages of

military force at a fraction of the cost. Due to the secretive nature and small size of terrorist

organizations, they often offer opponents no clear organization to defend against or to deter.

That is why preemption is being considered to be so important. In some cases, terrorism has

been a means to carry on a conflict without the adversary realizing the nature of the threat,

mistaking terrorism for criminal activity. Because of these characteristics, terrorism has

become increasingly common among those pursuing extreme goals throughout the world. But

despite its popularity, terrorism can be a nebulous concept. Even within the U.S. Government,

agencies responsible for different functions in the ongoing fight against terrorism use different

definitions.

The United States Department of Defense defines terrorism as the calculated use of

unlawful violence or threat of unlawful violence to inculcate fear; intended to coerce or to

intimidate governments or societies in the pursuit of goals that are generally political,

religious, or ideological. Within this definition, there are three key elementsviolence, fear,

and intimidationand each element produce terror in its victims. The FBI uses this:

"Terrorism is the unlawful use of force and violence

Against persons or property to intimidate or coerce a government, the civilian population, or

any segment thereof, in furtherance of political or social objectives." The U.S. Department of

State defines "terrorism" to be "premeditated politically-motivated violence perpetrated


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against non-combatant targets by sub-national groups or clandestine agents, usually intended

to influence an audience.

Outside the United States Government, there are greater variations in

what features of terrorism are emphasized in definitions. The United Nations produced this

definition in 1992; "An anxiety-inspiring method of repeated violent action, employed by

(semi-) clandestine individual, group or state actors, for idiosyncratic, criminal or political

reasons, whereby - in contrast to assassination - the direct targets of violence are not the main

targets." The most commonly accepted academic definition starts with the U.N. definition

quoted above, and adds two sentences totaling another 77 words on the end; containing such

verbose concepts as "message generators" and 'violence based communication processes."

Less specific and considerably less verbose, the British Government definition of 1974

is"the use of violence for political ends, and includes any use of violence for the purpose of

putting the public, or any section of the public, in fear."

Terrorism is a criminal act that influences an audience beyond the immediate victim. The

strategy of terrorists is to commit acts of violence that draws the attention of the local

populace, the government, and the world to their cause. The terrorists plan their attack to

obtain the greatest publicity, choosing targets that symbolize what they oppose. The

effectiveness of the terrorist act lies not in the act itself, but in the publics or governments

reaction to the act. For example, in 1972 at the Munich Olympics, the Black September

Organization killed 11 Israelis. The Israelis were the immediate victims. But the true target

was the estimated 1 billion people watching the televised event.

The Black September Organization used the high visibility of the Olympics to publicize itsviews on the plight of the Palestinian refugees. Similarly, in October 1983, Middle Eastern

terrorists bombed the Marine Battalion Landing Team Headquarters at Beirut International

Airport. Their immediate victims were the 241 U.S. military personnel who were killed and

over 100 others who were wounded. Their true target was the American people and the U.S.

Congress. Their one act of violence influenced the United States decision to withdraw the

Marines from Beirut and was therefore considered a terrorist success. There are three

perspectives of terrorism: the terrorists, the victims, and the generalpublics. The phrase one

mans terrorist is another mans freedom fighter is a view terrorists themselves would accept.

Terrorists do not see themselves as evil. They believe they are legitimate combatants, fighting

for what they believe in, by whatever means possible. A victim of a terrorist act sees the

terrorist as a criminal with no regard for human life.

This sympathetic view of terrorism has become an integral part of their psychological warfare

and needs to be countered vigorously.

Terrorist acts or the threat of such action have been in existence for millennia.

Despite having a history longer than the modern nation-state, the use of terror by governments

and those that contest their power remains poorly understood. While the meaning of the wordterror itself is clear, when it is applied to acts and actors in the real world it becomes confused.


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Part of this is due to the use of terror tactics by actors at all levels in the social and political

environment. Is the Unabomber, with his solo campaign of terror, a criminal, terrorist, or

revolutionary?

Can he be compared to the French revolutionary governments who coined the word terrorism

by instituting systematic state terror against the population of France in the 1790s, killing

thousands? Are either the same as revolutionary terrorist groups such as the Baader-Mienhof

Gang of West Germany or the Weather Underground in the United States?

So we see that distinctions of size and political legitimacy of the actors

using terror raise questions as to what is and is not terrorism. The concept of moral

equivalency is frequently used as an argument to broaden and blur the definition of terrorism

as well. This concept argues that the outcome of an action is what matters, not the intent.

Collateral or unintended damage to civilians from an attack by uniformed

military forces on a legitimate military target is the same as a terrorist bomb directed

deliberately at the civilian target with the intent of creating that damage. Simply put, a car

bomb on a city street and a jet fighter dropping a bomb on a tank are both acts of violence that

produce death and terror.

Therefore (at the extreme end of this argument) any military action is

simply terrorism by a different name. This is the reasoning behind the famous phrase "One

man's terrorist is another man's freedom fighter". It is also a legacy of legitimizing the use of

terror by successful revolutionary movements after the fact. The very flexibility andadaptability of terror throughout the years has contributed to the confusion. Those seeking to

disrupt, reorder or destroy the status quo have continuously sought new and creative ways to

achieve their goals. Changes in the tactics and techniques of terrorists have been significant,

but even more significant are the growth in the number of causes and social contexts where

terrorism is used.

Over the past 20 years, terrorists have committed extremely violent acts for

alleged political or religious reasons. Political ideology ranges from the far left to the far right.

For example, the far left can consist of groups such as Marxists and Leninists who propose a

revolution of workers led by revolutionary elite. On the far right, we find dictatorships that

typically believe in a merging of state and business leadership.

Nationalism is the devotion to the interests or culture of a group of people

or a nation. Typically, nationalists share a common ethnic background and wish to establish or

regain a homeland. Religious extremists often reject the authority of secular governments and

view legal systems that are not based on their religious beliefs as illegitimate. They often view

modernization efforts as corrupting influences on traditional culture. Special interest groups

include people on the radical fringe of many legitimate causes; e.g., people who use terrorism

to uphold antiabortion views, animal rights, and radical environmentalism. These groups

believe that violence is morally justifiable to achieve their goals


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The Evolu tion of Terr orism

Terrorism is continually changing. While at the surface it remains "the calculated use of

unlawful violence or threat of unlawful violence to inculcate fear" it is rapidly becoming the

predominant strategic tool of our adversaries. As terrorism evolves into the principal irregular

warfare strategy of the 21st century, it is adapting to changes in the world socio-political

environment. Some of these changes facilitate the abilities of terrorists to operate, procure

funding, and develop new capabilities. Other changes are gradually moving terrorism into a

different relationship with the world at large.

In order to put these changes into context, it will be necessary to look at

the historical evolution of terrorism, with each succeeding evolution building upon techniquespioneered by others. This evolution is driven by ongoing developments in the nature of

conflict and international relations. It is also necessary to consider some of the possible causes

of future conflicts, in order to understand the actors and their motivations.

When describing the evolution of terrorism and the use of terror through

history, it is essential to remember that forms of society and government in the past were

significantly different than they are today. Modern nation-states did not exist in their present

form until 1648 (Treaty of Westphalia), and the state's monopoly on warfare, or inter-state

violence, is even more recent. The lack of central governments made it impossible to use

terror as a method of affecting a political change, as there was no single dominant politicalauthority.

Also, the absence of central authority meant that the game of warfare was open to many more

players. Instead of national armies, a variety of non-sovereign nobility, mercenaries, leaders of

religious factions, or mercantile companies participated in warfare. Their involvement in

warfare was considered to be perfectly legitimate. This is in contrast to the modern era, where

nations go to war, but private participation is actually illegal.


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Ear ly Theories of Terrori sm

Early practitioners of terrorism, such as the Zealots and the Assassins did not leave any

particular philosophy or doctrine on their use of terrorism. With the exception of spectacular

failures such as Guy Fawkes' religiously inspired attempt to assassinate King James I and both

Houses of Parliament in England, terrorism did not separate itself or progress beyond the

normal practices of warfare at that time. As political systems became more sophisticated, and

political authority was viewed as less of a divine gift and more as a social construct, new ideas

about political conflict developed.

The period of warfare and political conflict that embroiled Europe after

the French Revolution provided inspiration for political theorists during the early 1800s.

Several important theories of social revolution developed during this time (see text box on the

next page for summaries of the key revolutionary thinkers). The link between revolutionary

violence and terror was developed early on. Revolutionary theories rejected the possibility of

reforming the system and demanded its destruction. This extremism laid the groundwork for

the use of unconstrained violence for political ends.

Two ideologies that embraced violent social change were Marxism, which evolved into

communism, and anarchism. Both were utopian; they held that putting their theories into

practice could produce ideal societies. Both advocated the complete destruction of the existing

system. Both acknowledged that violence outside the accepted bounds of warfare and

rebellion would be necessary.

Communism focused on economic class warfare, and assumed seizure of state power by the

working class (proletariat) until the state was no longer needed, and eventually disposed of.

Anarchism advocated more or less immediate rejection of all forms of governance. Theanarchist's belief was that after the state is completely destroyed, nothing will be required to


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replace it, and people could live and interact without governmental coercion. In the short term,

communism's acceptance of the need for organization and an interim coercive state made it the

more successful of the two ideologies. Anarchism survived into the modern era and retains

attraction for violent extremists to this day.

20th Centur y Evolution of Terrori sm

In the early years of the 20th Century nationalism and

revolutionary political ideologies were the principal

developmental forces acting upon terrorism. When the

Treaty of Versailles redrew the map of Europe after

World War I by breaking up the Austro-Hungarian

Empire and creating new nations, it acknowledged the

principle of

Self-determination for nationalities and ethnic groups. This encouraged minorities and

ethnicities not receiving recognition to campaign for independence or autonomy.

However, in many cases self-determination was limited to European nations and ethnic groups

and denied others, especially the colonial possessions of the major European powers, creating

bitterness and setting the stage for the long conflicts of the anti-colonial period.

In particular, Arab nationalists felt that they had been betrayed. Believing they were

promised post-war independence, they were doubly disappointed; first when the French and

British were given authority over their lands; and then especially when the British allowed

Zionist immigration into Palestine in keeping with a promise contained in the Balfour

Declaration.

Since the end of World War II, terrorism has accelerated its development into a

major component of contemporary conflict. Primarily in use immediately after the war as a

subordinate element of anti-colonial insurgencies, it expanded beyond that role. In the service

of various ideologies and aspirations, terrorism sometimes supplanted other forms of conflict

completely. It also became a far-reaching weapon capable of effects no less global than the

intercontinental bomber or missile. It has also proven to be a significant tool of diplomacy and

international power for states inclined to use it.

The seemingly quick results and shocking immediacy of terrorism made some consider itas a short cut to victory. Small revolutionary groups not willing to invest the time and


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resources to organize political activity would rely on the "propaganda of the deed" to energize

mass action. This suggested that a tiny core of activists could topple any government through

the use of terror alone. The result of this belief by revolutionaries in developed countries was

the isolation of the terrorists from the population they claimed to represent, and the adoption

of the Leninist concept of the "vanguard of revolution" by tiny groups of disaffectedrevolutionaries. In less developed countries small groups of foreign revolutionaries such as

Che Guevara arrived from outside the country, expecting to immediately energize

revolutionary action by their presence.

TYPES OF TERRORISM

Different types of terrorism have been defined by lawmakers, security professionals andscholars. Types differ according to what kind of attack agents an attacker uses (biological, forexample) or by what they are trying to defend (as in ecoterrorism). Here, a comprehensive listof types of terrorism, with links to more information, examples and definitions.

Researchers in the United States began to distinguish different typesof terrorism in the 1970s, following a decade in which both domestic and international groupsflourished. By that point, modern groups had began to use techniques such as hijacking,

bombing, diplomatic kidnapping and assassination to assert their demands and, for the firsttime, they appeared as real threats to Western democracies, in the view of politicians, lawmakers, law enforcement and researchers. They began to distinguish different types of

terrorism as part of the larger effort to understand how to counter and deter it.

State Terrorism

Many definitions of terrorism restrict it to acts by non-state actors. But it can also be arguedthat states can, and have, been terrorists. States can use force or the threat of force, without
http://terrorism.about.com/od/whatisterroris1/a/StateTerrorism.htmhttp://terrorism.about.com/od/whatisterroris1/a/StateTerrorism.htm


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declaring war, to terrorize citizens and achieve a political goal. Germany under Nazi rule hasbeen described in this way.

It has also been argued that states participate in international terrorism, often by proxy.The United States considers Iran the most prolific sponsor of terrorism because Iran arms

groups, such as Hezbollah, that help carry out its foreign policy objectives.

Bioterrorism

Bioterrorism refers to the intentional release of toxic biological agents to harm and terrorizecivilians, in the name of a political or other cause. The U.S. Center for Disease Control hasclassified the viruses, bacteria and toxins that could be used in an attack. Category aBiological Diseases is those most likely to do the most damage. They include:

Anthrax (Bacillus anthraces) Botulism (Clostridium botulinum toxin)

The Plague (Yersinia pestis) Smallpox (Variola major) Tularemia (Francisella tularensis) Hemorrhagic fever, due to Ebola Virus or Marburg Virus

Cyber terrorism


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Cyber terrorists use information technology to attack civilians and draw attention to their

cause. This may mean that they use information technology, such as computer systems or

telecommunications, as a tool to orchestrate a traditional attack. More often, cyber terrorism

refers to an attack on information technology itself in a way that would radically disrupt

networked services. For example, cyber terrorists could disable networked emergency systemsor hack into networks housing critical financial information. There is wide disagreement over

the extent of the existing threat by cyber terrorists.

Eco-terrorism

Eco-terrorism is a recently coined term describing violence in the interests of

environmentalism. In general, environmental extremists sabotage property to inflicteconomic damage on industries or actors they see as harming animals or the naturalenvironment. This have included fur companies, logging companies and animalresearch laboratories

Nuclear terrorism
http://terrorism.about.com/od/e/g/Ecoterrorism.htmhttp://terrorism.about.com/od/n/a/NuclearTerror.htmhttp://0.tqn.com/d/terrorism/1/0/w/-/-/-/NuclearDetection.jpghttp://terrorism.about.com/od/n/a/NuclearTerror.htmhttp://terrorism.about.com/od/e/g/Ecoterrorism.htm


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"Nuclear terrorism" refers to a number of different ways nuclear materials might be exploited

as a terrorist tactic. These include attacking nuclear facilities, purchasing nuclear weapons, or

building nuclear weapons or otherwise finding ways to disperse radioactive materials.

Narcoterrorism

Narcoterrorism has had several meanings since its coining in 1983. It once denoted violence

used by drug traffickers to influence governments or prevent government efforts to stop thedrug trade. In the last several years, narcoterrorism has been used to indicate situations in

which terrorist groups use drug trafficking to fund their other operations.


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CHAPTER -2

TERRORIAM RISK

THE I NDIAN CONTEXT

It is a bit unfortunate that we as a country are facing hostilities from our neighboring countriessince independence. Pakistan since its creation has always harbored terrorist elements againstIndia with an intention to destabilize our country. China the Big Brother supports Pakistan intheir Endeavour to divide India. We face threats from Bangladesh and from Sri Lanka in theSouth. Since we have open borders with Nepal, terrorists use Nepal as easy entry and exit

points. Our borders with Pakistan and Bangladesh are porous and not fully sealed. We facetrouble on the North -East side with China claiming Arunachal Pradesh.

These countries hobnob with these terrorists and have helped them toestablish their bases from where they can carry out their evil acts. So all the expertise for

planting Bombs on soft targets come from these countries. But not everything can be donefrom these foreign bases. So they take advantage of the unemployed youth and others whofall easy prey to their indoctrination and create local groups who ferment trouble in all citiesacross India. They take help from some political class and the corrupt officials provide fodderfor their entry and exit from India.

So Terrorism is not about Muslims only and their quest for Jihad.Not all Muslims are terrorists and not all terrorists are Muslims. India's 140 million Muslims

are a salutary negation of the facile thesis about Islam's incompatibility with democracy. Theterrorists that we encounter today are not men who commit evil acts out of revenge. For thesemen indoctrinated by outfits like the Al Qaeda and the Dawood gangs, terrorism is a fullyfledged profession.

The cold blooded killers of Ahmadabad last week went about with theirtasks with clinical precision... They did it because it was a job they wanted to do. Only fewMuslims believe that these phonies are fighting for any cause but their own. Hindus havestopped fulminating against terror despite the heavy toll it takes each time. For these terroristswho are invisible, they have no Agenda. They do it in the name of Jihad or some linguistic orreligious cause, which a common man does not identify himself with.


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India earned its reputation as a soft state that can be intimidated intomeeting terrorists' demands. Our then foreign minister in the year 1999 in the month ofDecember personally escorted three terrorists freed by India in order to secure the release of

passengers of a hijacked Indian Airlines flight to Taliban controlled Afghanistan. This act ledto the 9/11 attack in New York as one of these very terrorists was later implicated in the 9/11

attacks.

Tough rhetoric and reactive government policies and Draconian acts like the POTA will notserve the cause for curbing such terrorism. It will only result in violation of human rights andengineer more youth to fall prey to such terrorist organizations. We have to break out of thistrap that we have imposed on ourselves.

Democratic politics, political freedoms, civil liberties and religious tolerancemust be protected at all costs. The corruption and politicization of the police forces must beminimized. We need a dedicated and an unbiased police force. Criminalization of politicsmust stop. Instead, we have number of parliamentarians with pending criminal cases. Some

jailed parliamentarians also cast their vote on important National issues which is alarming!Terrorism prospers and thrives in such conditions. In a way, Poverty is an incubator ofterrorism and a root cause of corruption. It breeds the Nasalizes and the local terroristgroups. The government needs to be tough in implementing reforms to maintain rapideconomic growth and uplift the status of its downtrodden people.

More importantly, India's terrorism problem is largely specificto Kashmir. There is a difference between terrorists and freedom fighters and one should notequate them. India must muster International support in this issue and put pressure onPakistan to stop supporting these terrorists. India habitually points fingers at Pakistan which isthe hotbed and the epicenter of terrorism all around the world.

But merely pointing fingers will not help matters. For a small country like Pakistanto be able to infiltrate groups of Indians and recruit them to the terrorist's cause indicatesfailures of the intelligence on the other hand. We have to look into this fact. There is no co-ordination between the central intelligence agencies and the states. Each points a finger atothers each time a bomb blast takes place. This is matched by the flaws of the criminal justicesystem, which is rudimentary by the standards of mature democracies. Whether it is theBombay bomb blasts of 1992 or the Gujarat riots in 2002, justice takes many years to deliver.Justice has neither been done, nor seen to be done. India needs to be tough but not reactionaryto the causes of terrorism.

The country has gone through the dark phases of terrorism; in Punjab, Assam, Tamil Nadu andJammu & Kashmir. However, the recent events have shaken the core of nation and have givena totally new dimension to the gravity of the risk


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LI ST OF TERRORIST ATTACS IN INDI A

IN MUMBAI

12 March 1993 - Series of 13 bombs go off, killing 257

6 December 2002 - Bomb goes off in a bus in Ghatkopar, killing 2

27 January 2003 - Bomb goes off on a bicycle in Vile Parle

14 March 2003 - Bomb goes off in a train in Mulund, killing 10

28 July 2003 - Bomb goes off in a bus in Ghatkopar, killing 4

25 August 2003 - Two Bombs go off in cars near the Gateway of India and ZaveriBazaar, killing 50

11 July 2006 - Series of seven bombs go off in trains, killing 209

26 November 2008 to 29 November 2008 - Coordinated series of attacks, killing atleast 172.

13 February 2010 - a bomb explosion at the German Bakery in Pune killed fourteenpeople, and injured at least 60 more

13 July 2011 - Mumbai bombings

August 1, 2012-Pune bombings


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I N OTHER STATES OF INDI A

March 12, 1993 - A series of bomb blasts, planted by Muslim underworld figures,

rock the country's commercial capital of Bombay, killing some 260 people and injuring

713.

February 14, 1998- 46 persons were killed and more than 200 injured when 13 blasts

ripped through Coimbatore, members from Al-Umma, All India Al-Jihad Committee,

and Peoples Democratic Party were found to be behind the attack.

December 24-31, 1999 Pakistani militants hijack an Indian Airlines flight fromKathmandu to New Delhi with 189 people aboard, kill one passenger and force the

release of three jailed Muslim militants in exchange.

December 22, 2000- Lashkar-e-Taiba militants attack the Red Fort in Delhi that left

two Army personnel and a civilian dead.

October 1, 2001- At least 21 people killed in a suicide bomb explosion and gunfire at

the assembly in Kashmir in an attack by suspected Islamic militants.

December 13, 2001- Heavily armed Islamic militant group opened fire in Parliament

complex, killing several people in an unprecedented attack on the seat of power in the

world's biggest democracy.

January 22, 2002 - Four people were killed in an attack on the American Center,

Kolkata by Lashkar-e-Taiba militants.

March 30, 2002 - Seven Hindus killed in an attack by Islamic militants on the

Raghunath Temple in Jammu.


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May 14, 2002- More than 30 army men were killed in a terrorist attack on an Army

camp near Jammu.

September 24, 2002 - 35 people were killed when 2 Lashkar-e-Taiba militants

attacked the Akshardham temple in Gandhinagar, Gujarat.

December 2, 2002- Two persons were killed and 31 injured in a powerful explosion

in a bus outside the crowded Ghatkopar railway station in Mumbai. Students Islamic

Movement of India was suspected to be behind the blasts

December 6, 2002- Twenty-five people were injured in a bomb blast by members of

the Students Islamic Movement of India at McDonaldsfast food restaurant at Mumbai

Central railway station. The bomb was planted in the air conditioner duct. It was

suspected to be a crude bomb.

January 27, 2003- At least 30 people were injured when a bomb planted on a bicycle

went off throwing splinters of sharp nails outside Vile Parle railway station in

Mumbai. Members of SIMI were found to be behind the attack.

March 13, 2003- A powerful bomb blast shattered a bogie of a local train at Mulund

railway station in Mumbai during peak hours killing 11 people and injuring more than

65. This was the most powerful serial explosion.

August 23, 2003 - Two bombings at the Gateway of India and the Mumba Devi

temple in Mumbai killed 52, injured 167. Terrorists from Lashkar-e-Taiba and the

Students Islamic Movement of India were found to be behind the attacks.

July 28, 2003 - Bus blast kills 3 and injures 31 others in Mumbai. Pakistani

intelligence agency: ISI and members of the Students Islamic Movement of India were

found to be behind the blast.

July 5, 2005- Five Bangladeshi terrorists, trained by the Jaish-e-Mohammad, attacked

the Ram Janmabhumi in Ayodhya, all 5 killed, 1 civilian died.

October 29, 2005- 67 people were killed and 224 injured in serial bombings in major

Delhi markets on Diwali eve. A Pakistani group, Islamic Inquilab Mahaz, claimed

responsibility for the attack. The group is linked to Lashkar-e-Taiba.


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March 7, 2006- At least 20 persons were killed and over 101 injured when two blasts

rocked Varanasi. The first blast took place at the Sankat Mochan Hanuman temple, the

second at the Varanasi railway station. Terrorists from Lashkar-e-Taiba were found to

be behind the attack.

June 1, 2006 - Three heavily armed terrorists were killed in an encounter with the

police when they tried to drive through the security cordon guarding the RSS

headquarters in Nagpur. Two policemen were injured in the encounter.

July 11, 2006 - Seven explosions ripped through crowded commuter trains and

stations in Mumbai, killing at least 200 people and leaving 700 more bloodied and

injured. Lashkar-e-Taiba and local Students Islamic Movement of India (SIMI)

activists were found to be behind the attacks.

2006 Varanasi blasts

A series of blasts occurred across the Hindu holy city of Varanasi on 7 March 2006.Fifteen people are reported to have been killed and as many as 101 others were injured. Noone has accepted responsibility for the attacks, but it is speculated that the bombings werecarried out in retaliation of the arrest of a Lashkar-e-Toiba agent in Varanasi earlier inFebruary 2006.

On 5 April 2006 the Indian police arrested six Islamic militants, including a cleric whohelped plan bomb blasts. The cleric is believed to be a commander of a banned Bangladeshi

Islamic militant group, Harkatul Jihad-al Islami, and is linked to the Inter-ServicesIntelligence, the Pakistani spy agency.

2010 Varanasi blasts

On 7 December 2010, another blast occurred in Varanasi that killed immediately a toddler,and set off a stampede in which 20 people, including four foreigners, were injured. Theresponsibility for the attack was claimed by the Islamistmillitant group Indian Mujahedeen.

On 14th march 2011 militants of the Ranjan Daimary-led faction ambushed patrolling troop ofBSF when one way from Bangladoba in Chirang district of Assam to Ultapani in Kokrajharkilling 8 jawans.

2011 High cour t bombing The 2011 Delhi bombing took place in the Indian capitalDelhi on Wednesday, 7 September 2011 at 10:14 local time outside Gate No. 5 of theDelhi High Court, where a suspected briefcase bomb was planted. The blast killed 12

people and injured 76.


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September 7, 2011 2011 Delhi bombing

February 13, 2012 2012 attacks on Israeli diplomats

February 21, 2013 2013 Hyderabad blasts

March 13, 2013 2013 Srinagar attack

Andhra Pradesh

Andhra Pradesh is one of the few southern states affected by terrorism, although of a fardifferent kind and on a much smaller scale. The terrorism in Andhra Pradesh stems from thePeople's War Group (PWG), popularly known as Nasalizes.

The PWG has been operating in India for over two decades, with most of its operations in theTelangana region in Andhra Pradesh. The group is also active in Orissa and Bihar. Unlike theKashmiri insurgents and ULFA, PWG is a Maoist terrorist organization and communism isone of its primary goals.

Having failed to capture popular support in the elections, they resorted to violence as a meansto voice their opinions. The group targets Indian Police, multinational companies, and otherinfluential institutions in the name of the communism. PWG has also targeted seniorgovernment officials, including the attempted assassination of former Andhra Pradesh ChiefMinister Chandrababu Naidu.

It reportedly has strength of 800 to 1,000 well armed militants and is believed to have closelinks with the Maoists in Nepal and the LTTE of Sri Lanka. According to the Indiangovernment, on an average, more than 60 civilians, 60 naxal rebels and a dozen policemen arekilled every year because of PWG led insurgency. Also, one of the major terrorist attacks wasthe 25 August 2007 Hyderabad Bombing.

Kerala

For a long time, Kerala was considered as a terror Free State and model of tolerance and

prosperity. The wake-up call came in October 2008, when four young Malayalis were killedby Indian security forces in an alleged jihadi training camp in Kashmir. Last July a differentthreat emerged when a group of young Muslims cut off the hand of a Christian professor,condemning him for writing an exam question they said insulted the Prophet Muhammad.According to Time Magazine, migrants to the Persian Gulf were taking extremist ideology toKerala

Tamil Nadu

Tamil Nadu had LTTE (Liberation Tigers of Tamil Elam) militants operating in the Tamil

Nadu state up until the assassination of former Prime Minister Rajiv Gandhi. LTTE had givenmany speeches in Tamil Nadu led by Velupillai Prabhakaran, Tamilselvan, and other Elam


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members. The Tamil Tigers, now a banned organisation, had been receiving many donationsand support from India in the past. The Tamil Nadu Liberation Army is a militant Tamilmovement in India that has ties to LTTE.

THE TERRORISM RISK POOL :

A decade after the 9/11 attacks in the US, the Indian insurance industry has asurging pool and is well positioned to handle terror-risk covers.

Along with insurance policies, important events today carry a terror cover.While the ICC Cricket World Cup 2011 had a cover of Rs 600 crore, the total sum insured forIPL-4 stood at around Rs 900 crore, which included a cover of Rs 450 crore against terroristattacks.

After the attacks in the US, many countries started putting together a pool to

cater to insurable losses. The Indian Terrorism Pool, managed by state-run GeneralInsurance Corporation of India, was set up in 2002 with an initial corpus of Rs 200 crore. Theentire premium collected under terrorism risks by the industry is deposited in the pool. Thiscorpus is set aside by general insurance companies to ensure claims after a terror attack do nothit the bottom lines of insurers.

The pool covers companies and institutions for a liability of Rs 750 crore,

including damage or loss of property.

According to recent estimates, the terrorism risk pool in India has surged to arecord Rs 1,700 crore, the highest since the Mumbai terror attack on November 26, 2008. Therates are uniform across the industry and are fixed by the pool committee. This is very good

for the entire industry. The advantage of having such a pool was felt while settling claims afterthe Mumbai terror attack,


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CHAPTER 3

BIOTERRORIEM

The history of bioterrorism goes back as far as human warfare, in which therehave always been efforts to use germs and disease as weapons. In the late 20th century, violentnon-state actors began seeking to acquire or develop biological agents to use in attacks oncivilians. There are very few of these groups, and almost no recorded bioterrorism attacks.

Nevertheless, the reported risk has led the U.S. government to expend immense resources forbiodefense in the early part of the 21st century.

Bioterrorism refers to the intentional release of toxic biological agents to harm andterrorize civilians, in the name of a political or other cause. The U.S. Center for DiseaseControl has classified the viruses, bacteria and toxins that could be used in an attack. Categorya Biological Diseases is those most likely to do the most damage. They include:

Anthrax (Bacillus anthracis) Botulism (Clostridium botulinum toxin) The Plague (Yersinia pestis) Smallpox (Variola major) Tularemia (Francisella tularensis)

Hemorrahagic fever, due to Ebola Virus or Marburg Virus

Bioterrorism is a form of terrorism where there is the intentional release ofbiological agents (bacteria, viruses, or other germs). This is also referred to as germ warfare.Terrorism is defined by the United States government as the "unlawful use of force andviolence against persons or property to intimidate or coerce a government, the civilian

population, or any segment thereof, in furtherance of political or social objectives." In additionto biological agents, terrorists can also utilize chemical agents and nuclear bombs.

While a biological agent may injure or kill people, animals, or plants, the goal forthe terrorist is to further their social and political goals. Many biological agents are found in


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nature; however, they can be modified by the terrorist to make them more dangerous. Some ofthese agents can be transmitted from person to person, and the infection may take hours ordays to become apparent.

The biological agents that can be utilized for bioterrorism

While any germ, bacteria, or virus could potentially be utilized by terrorist, there are a numberof biological agents that have been recognized as being more likely to be utilized. The reasonfor these agents being of concern is based on their availability to terrorists and the ease bywhich these agents can be disseminated. TheU.S. Centers for Disease Control and

Prevention (CDC) has developed a classification system for biological terror agent; theclassification is based on the likelihood of the agent being used and the risk posed by eachagent. However, it is almost impossible for most people to memorize all the details abouteach of these agents. It is more important for the general public to understand the risk of

bioterrorism and the appropriate response to a terrorist attack.

Origins of Current Concern about Bioterrorism

Douglas C. Lovelace, Jr., the Director of the Strategic Studies Institute, suggests four reasonsbioterrorism has become a concern in the last generation:

The first, beginning around 1990 ...was the official U.S. Government suggestion thatproliferation of offensive BW programs...was an increasing trend. The second was thediscovery ...that the USSR...had built a massive covert biological weapons program... Thethird was the corroboration by the United Nations Special Commission in 1995 that Iraq ...had stockpiled large quantities of agents ... The last was the discovery, also in 1995, that theJapanese Aum Shinrikyo group ...had spent 4 years attempting ...to produce ...two pathogenic

biological agents. (December 2005)
http://www.medicinenet.com/script/main/art.asp?articlekey=2664http://www.medicinenet.com/script/main/art.asp?articlekey=2664http://www.medicinenet.com/script/main/art.asp?articlekey=2664http://www.medicinenet.com/script/main/art.asp?articlekey=2664http://0.tqn.com/d/terrorism/1/0/u/0/-/-/bioterrorism.jpg


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Twentieth Century Biological Warfare

States, not terrorists, have been the biggest developers of biological warfare programs. In thetwentieth century, Japan, Germany, the (former) Soviet Union, Iraq, the United States and

Great Britain all had biological warfare development plans.

There have been a few confirmed bioterrorism attacks. In 1984, the Rajneesh cult in theUnited States made hundreds ill with food poisoning when they put Salmonella typhimoriumin an Oregon salad bar. In 1993, the Japanese cult Aum Shinrikyo sprayed anthrax from arooftop.


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CHAPTER 4

INSURANCE AGAINST TERRORISM

Terrorism insuranceisinsurancepurchased by property owners to cover theirpotential losses and liabilities that might occur due toterrorist activities.

It is considered to be a difficult product for insurance companies, as the odds of

terrorist attacks are very difficult to predict and the potential liability enormous. For exampletheSeptember 11, 2001 attacks resulted in an estimated $31.7 billion loss. This combinationof uncertainty and potentially huge losses makes the setting ofpremiums a difficult matter.Most insurance companies therefore exclude terrorism from coverage incasualty andpropertyinsurance,or else require endorsements to provide coverage.

Concentration of risk is another factor in determining availability for terrorism

insurance. Due to the concentrated losses of theWorld Trade Center, carriers were hit with

large losses in one centralized location. Insurers seek to spread the coverage over a wider

geographic area than as with other aggregate perils, such as flood.

Insurance companies are using an approach that is similar to that used withnatural catastrophe risks. In this case where demand is greater than the supply for terrorism

coverage that a short-term solution is possible: a mix of government and private resource to

make easy the transition. In this situation, the government would serve two functions: to

establish rules to overcome the capacity shortage and to be the insurer of last resort.

On December 26, 2007, the President of the United States signed into law theTerrorism Risk Insurance Program Reauthorization Act of 2007 which extends theTerrorism

Risk Insurance Act (TRIA) through December 31, 2014. The law extends the temporary
http://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Terrorismhttp://en.wikipedia.org/wiki/September_11,_2001_attackshttp://en.wikipedia.org/wiki/Insurance_premiumhttp://en.wikipedia.org/wiki/Casualty_insurancehttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/World_Trade_Centerhttp://en.wikipedia.org/wiki/Terrorism_Risk_Insurance_Acthttp://en.wikipedia.org/wiki/Terrorism_Risk_Insurance_Acthttp://en.wikipedia.org/wiki/Terrorism_Risk_Insurance_Acthttp://en.wikipedia.org/wiki/Terrorism_Risk_Insurance_Acthttp://en.wikipedia.org/wiki/World_Trade_Centerhttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Casualty_insurancehttp://en.wikipedia.org/wiki/Insurance_premiumhttp://en.wikipedia.org/wiki/September_11,_2001_attackshttp://en.wikipedia.org/wiki/Terrorismhttp://en.wikipedia.org/wiki/Insurance


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federal Program that provides for a transparent system of shared public and privatecompensation for insured losses resulting from acts of terrorism.

The United States insurance market offers coverage to the majority of largecompanies which ask for it in their polices. The price of the policy depends on where theclients are residing and how much limit they buy.

In mid-2007 the idea of another extension to TRIA was tabled and is officially knownas TRIREA, (Terrorism Risk Insurance Revision and Extension Act). Initially TRIREAcontained several new provisions including a mandatory 'make available' clause for NCBRcoverage (Nuclear, Chemical, Biological and Radiological) and the ending of the distinction

between domestic and foreign events.

The Taj Mahal and the Oberoi group hotel, The Trident, might not have expected a terrorattack of this scale, but the two iconic landmark hotels do have terrorism insurance cover,

which would make up for the material losses they incur in this attack. While the Taj Hotel is

insured jointly by Tata AIG General Insurance (65 per cent), ICICI Lombard (30 per cent) and

Iffco Tokio General Insurance (5 per cent), Trident is primarily insured by United India

Insurance. Both the hotels are understood to have taken terrorism cover and loss of profit as

add-on policies with the fire insurance covers from their respective insurers. The amount of

cover that both the hotels have could not be ascertained.

In India, terrorism cover is offered by general insurance companies as an add-on policy with

the fire insurance policy. The policy covers any material loss that takes place due to acts of

terrorism. After the attacks on the World Trade Centre, US, in 2001, most of the reinsurers

refused to give cover against acts of terrorism. General insurance companies in India then

formed a collective pool and since then all the premium collections done by the industry for

this policy are put in this pool.
http://en.wikipedia.org/wiki/File:UA_Flight_175_hits_WTC_south_tower_9-11.jpeg


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WHY IS TERRORISM INSURANCE REQUIRED?

Terrorism has become a global phenomenon. The recent world history has witnessed frequent

terrorist attacks, whether big or small and the number of such attacks per year has increased

rapidly. The new millennium has started with a major terrorist attack of 9-11-2001 on World

Trade Center in USA which is one of the most powerful nations of the world. This itself

speaks volume about growing audacity and technological sophistication of the terrorist outfits.

Terrorism insurance, thus, has become a need based insurance product. This is evident from

the attacks that we have witnessed in the recent years as shown in the following table:

INCIDENTS OF TERRORISM, WORLDWIDE*

2007 2008 2009 2010 2011

Attacks worldwide 14,415 11,663 10,968 11,641 10,283

Attacks resulting in at least 1 death, injury, or kidnapping 11,085 8,361 7,874 8,259 7,453

Attacks resulting in the death of at least 10 individuals 353 234 236 193 193

Attacks resulting in the death of at least 1 individual 7,229 5,040 4,761 4,704 4,502

Attacks resulting in the death of only 1 individual 3,982 2,870 2,695 2,691 2,550

Attacks resulting in the death of 0 individuals 7,186 6,623 6,207 6,937 5,781

Attacks resulting in the injury of at least 1 individual 6,231 4,831 4,530 4,724 4,333

Attacks resulting in the kidnapping of at least 1 individual 1,156 948 882 1,118 795

People killed, injured or kidnapped as a result of terrorism, worldwide 71,803 54,290 58,720 49,928 43,990

People killed as a result of terrorism, worldwide 22,720 15,709 15,311 13,193 12,533

People injured as a result of terrorism, worldwide 44,103 33,901 32,660 30,684 25,903

People kidnapped as a result of terrorism, worldwide 4,980 4,680 10,749 6,051 5,554

Over 10,000 terrorist attacks occurred in 2011, affecting nearly 45,000 victims in 70 countries

and resulting in over 12,500 deaths. The total number of worldwide attacks in 2011, however,

dropped by almost 12 percent from 2010 and nearly 29 percent from 2007. Although the 2011

numbers represent five-year lows, they also underscore the human toll and geographic reach

of terrorism. The Near East and South Asia continued to experience the most attacks,

incurring just over 75 percent of the 2011 total. In addition, Africa and the Western

Hemisphere experienced five-year highs in the number of attacks, exhibiting the constant

evolution of the terrorist threat.


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The Near East and South Asia suffered 7,721 attacks and 9,236 deaths. The majority of those

occurred in just three countries Afghanistan , Iraq and Pakistan which, together,

accounted for 85 percent of attacks in these regions and almost 64 percent of attacks

worldwide. While attacks in Afghanistan and Iraq decreased from 2010 by 14 and 16 percent,

respectively, attacks in Pakistan increased by 8 percent.1

Africa experienced 978 attacks in 2011, an 11.5 percent increase over 2010. This is

attributable in large part to the more aggressive attack tempo of the Nigeria-based terrorist

group Boko Haram, which conducted 136 attacks in 2011up from 31 in 2010.

Attacks in Europe and Eurasia fell 20 percent from 703 in 2010 to 561 in 2011. The greatest

decline occurred in Russia where terrorist attacks were down from 396 in 2010 to 238 in 2011.

In contrast, Turkey experienced a spike in terrorist attacks, rising from 40 in 2010 to 91 in

2011. Together, Russia and Turkey suffered almost 70 percent of all 2011 terrorism-related

deaths in Europe and Eurasia .

The number of terrorist attacks in East Asia and the Pacific declined for the fifth consecutive

year, falling 25 percent from 724 in 2010 to 543 in 2011, and 62 percent from the peak of

1,423 in 2007. Thailand and the Philippines continued to be the primary terrorist targets in the

region.

Terrorist attacks in the Western Hemisphere rose nearly 40 percent from 343 in 2010 to 480 in

2011, the vast majority of which were ascribed to the Revolutionary Armed Forces of

Colombia (FARC).

Types of Attacks

Armed attacks and bombings constituted nearly 80 percent of all terrorist attacks in 2011.

Suicide attacks accounted for just 2.7 percent of terrorist attacks last year but 21 percent of all

terrorism-related fatalities, a fact that underscores their extreme lethality. IEDs were the most

frequently used and deadliest terrorist weapon employed.

The number of bombings has remained relatively consistent over the past five years, ranging

between approximately 4,000 and 4,500 annually. In contrast, the number of armed attacks hassteadily decreased from a high of 7,958 in 2007 to 4,290 in 2011.

Suicide attacks rose from 264 in 2010 to 279 in 2011. In spite of the increase, this represents a

sharp drop from the five-year peak of 520 suicide attacks in 2007. Sunni extremists conducted

93 percent of suicide attacks.Terrorism-related kidnapping events and deaths, 978 and 576,

respectively, hit five-year lows.


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Victims of Attacks

Over 12,000 people were killed by terrorist attacks in 2011. The overall number of victims

killed, however, decreased 5 percent from 2010. More than half of the people killed in 2011

were civilians and 755 were children. Although terrorism deaths decreased, the number of

government representative and security force fatalities increased significantly. Muslims

continued to bear the brunt of terrorism , while attacks targeting Christians dropped nearly 4 5

percent from a five-year high in 2010.

Although civilians were the largest single group of victims killed in terrorist attacks, their

numbers over the past five years in proportion to the total number of deaths have gone down

by 13 percent, decreasing from a 2007 high of 64 percent.

The number of government employees and contractors killed in 2011 increased by over 60

percent from 2010, while the number of government officials killed in 2011 increased by over

13 percent. The number of police killed in 2011 also increased by over 15 percent.

In cases where the religious affiliation of terrorism casualties could be determined, Muslims

suffered between 82 and 97 percent of terrorism-related fatalities over the past five years.

Muslim majority countries bore the greatest number of attacks involving 10 or more deaths,

with Afghanistan sustaining the highest number (47), followed by Iraq (44), Pakistan (37),

Somalia (28), and Nigeria (12).

Afghans also suffered the largest number of fatalities overall with 3,245 deaths, followed by

Iraqis (2,958), Pakistanis (2,038), Somalis (1,013), and Nigerians (590).

Attacks against Facilities

Over two-thirds of all terrorist attacks struck infrastructure or facilities. Of those,

transportation assets and public places were the most frequently targeted. Transportation

facilities -- such as vehicles, buses and transportation infrastructure -- incurred damage in

about 27 percent of the attacks, while public places -- including communal areas, markets,

polling stations, religious institutions , schools and residences -- incurred damage in about 21percent of the attacks. Attacks on government facilities decreased by about 43 percent from

2010, from 796 attacks to 453 attacks in 2011.There was a sharp increase in the number of

attacks directed at energy infrastructure, including fuel tankers, fuel pipelines and electrical

networks, rising from 299 attacks in 2010 to 438 attacks in 2011.The number of attacks

directed at public places declined in each of the past five years, from a high of 4,121 attacks in

2007 to 2,186 attacks in 2011.


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INSURANCE COVER AGAINST TERRORISM :

INTRODUCTION

In the present scenario of continually increasing terrorist attacks in India, we would

like to accentuate to you the available terrorism coverages, to safeguard your interests

on your assets and human resources. Most organizations are unaware of the level of

terror risk faced by them. And even after buying terror insurance covers for their

properties and possible business disruptions, companies may not exactly be clear on

the impact of death and devastation from a terror attack on their balance sheets.

Scope of Terrorism Cover

Terrorism Coverage is provided as an additional cover to all risks underwritten under

fire, engineering and property section of miscellaneous classes of business. For

Personal Accident policies, Terrorism is an inbuilt cover.

Terrorism Pool

The Indian Market Terrorism Risk Insurance Pool was initiated by the Indian Non-Life

Insurers in 2002. The Pool is managed by GIC Re. The entire terrorism premium is

ceded to the Pool and results are shared by the pool members in proportion to theirrespective capacities provided.

Salient Features

Terrorism cover is taken as add on cover by payment of additional premium at the

option of the insured.

The Sum Insured opted for can include Material Damage & Business Interruption.

The maximum aggregate loss (Material Damage + Loss of Profit) payable per

compound/risk/location is Rs. 750 crores.

The premium charged will vary based on the risk occupancy (i.e.

Industrial/Nonindustrial /Residential) & on the Sum Insured.

The coverage is subject to an excess of 0.5% of the total sum insured subject toaminimum of Rs. 1 lakh on each and every claim (in respect of both material damageand loss of profits combined) and maximum of Rs. 10 crores for each and every claim.

Midterm inclusion of Terrorism Coverage is not allowed.

Terrorism Cover has to be taken only in conjunction with Property Engineering covers.


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ExclusionsIt does not cover loss of or damage caused by Total or partial cessation of work or the

retardation or interruption or cessation of any process or operations or omissions of any kind.Permanent or temporary dispossession resulting from confiscation, commandeering,requisition or destruction by order of the Government or any lawfully constituted Authority.

Permanent or temporary dispossession of any building or plant or unit of machinery resultingfrom the unlawful occupation by any person of such building or plant or unit or machinery or

prevention of access to the same.

Burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind ofany person (whether or not such act is committed in the course of a disturbance of public

peace) in any action taken in respect of an act of terrorism

Loss or damage, cost or expenses of whatsoever nature directly or indirectly caused by,resulting from or in connection with any action taken in controlling, preventing,suppressing or in any way relating to action taken in respect of any act of terrorism.

Insurance: terror-proof your property

Terrorism has become a global menace, causing massive loss of life and property. Though you

dont know when and where you might be a victim of terrorism, there are some steps you can

take in order to ensure that you get suitable compensation for loss of property.

The damage caused by terrorism to human life and property till now has been staggering.Terrorist acts can happen anywhere, as is evident in the recent attacks in the Ajmer dargah,Mumbai train blasts, and the latest bomb blasts in UP. It could very well happen in yourneighborhood and damage your property. So it is better to take out a property insurance. Herewe take a look at what terrorism insurance is all about.Terrorism insurance is the insurance cover available to the property owners in order tocompensate them for the losses and liabilities caused by terrorist activities.

The premiums payable for insuranceTerrorism insurance is regarded by insurance companies as a very difficult product, since it isvery difficult to predict the chances of terrorist attack taking place and the losses caused aremassive. For example, the 9/11 (September 11) attacks resulted in a loss of about US$ 31.7

billion. The twin factors of unpredictability and possibility of massive losses makes it difficultto set the premiums of terrorism insurance. Hence many insurers omit terrorism insurancefrom casualty and property insurance and those who do, need approvals in order to give cover.


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TERRORISM INSURANCE IN INDIA

Yes, India does have its terrorism insurance. But there is a major difference between theterrorism insurance in India and that of advanced countries like USA. In India, the terrorisminsurance pool has been set up by the Indian insurance companies. A terrorism pool is a

corpus of funds gathered by all insurance companies to pay for the losses resulting fromterrorist activities.

The recent serial blasts in Mumbai have yet again put terror insurance cover in the limelight.The need for a terror cover is being felt by most merchants and shopkeeper running their

businesses in and around the blast sites.

One merchant, with a shop located in the lane close to Zaveri Bazaar said that he would not

mind paying a premium for a terror cover after feeling the tremors of the blast.

During February to April 2011, Board of Control for Cricket in India (BCCI) had also takenaninsurance cover against terrorism for the Cricket World Cup event being played in Indiaand neighbouring countries. The event was insured for a sum assured of Rs 2.46 billion andthe premium for this was said to be in the range of Rs 30 to Rs 40 million.

The cover was provided by National Insurance Company with General Insurance Corporationof India (GIC of India)providing there insurance support. In addition to seeking insurancecover to protect their wealth held in the form of gold and precious jewellery, some templeshave also opted for cover against terror attacks in the recent past. At a time when 9/11 had

just taken place with an attack on the World Trade Center in New York, reinsurers around theworld had withdrawn terrorism cover. GIC Re rose to the occasion by forming and managinga terror pool. The terror pool was set to cover companies, institutions etc for material loss or

property damage. The entire premium collected by the insurance industry under terrorism riskis deposited in this pool managed by GIC.

The pool has surged to Rs 1700 crore; and the premiums on terror insurance cover have alsorisen by around 25% since 2008 terror attacksThe advantage of having a terror pool was alsofelt while settling claims of Rs 600 crore against the damage caused on November 26, 2008.The recent blasts in Zaveri bazaar have hit the diamond merchants hard and compelled them to

rethink the risks they are exposed to as well as the importance of a terror cover.
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CHAPTER 5

CHALLAGES AND ISSUES IN INDIAN CONTEXT

certain critical challages and issues pertaining to Indian terrorism insurance market are.

India has terrorism pool by the name of IMTP, presently having the corpus at aroundRs.1500 cr, out of which the ceiling for a single event per location loss is 750 cr. Thecoverage which was earlier at just Rs 200 crore per location in 2002-03, has graduallyincreased to Rs 750 crore. Despite this impressive growth in coverage amount, it can

not be considered sufficient enough in present conditions. Insurance coverage, only upto this amount, can be allowed by the writing companies. Beyond this limit, coveragecan be obtained only from the international market. Presently, with so many eventshappening with terrorist threats looming large on them, the pool looks hugelyinadequate.

No government support is also very concerning issue. Whereas in almost all othercountries under study, it has been found that, there is presence of government supporteither directly or indirectly, irrespective of the fact that terrorism insurance marketthere is far more developed than Indian insurance market. Indian terrorism insurancemarket at present is in its nascent stage and requires government support.

Even though the insurance business shows an upward trend, the growth is in terms ofamount of coverage and premiums collected. According to IRDA data, total premiumcollected for terrorism insurance accounted for Rs 155.97 crore in 2004 which rose toRs 306 crore in 2009-10 showing almost 100% increase in the amount. However, whenit comes to reaching the masses, the number of clientele are still less and limited to richcorporate class. Mass penetration is still an issue especially with less participation from

insurance player, fewer products and higher premiums.


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For terrorism insurance business globally, the difficulty lies in determination of thepremium charges. With years of research and data collection, the insurance companieshave been able to estimate the potential losses as well as the probability of occurrence

of natural calamities with reasonable accuracy. However the same is not true in case ofterrorism insurance. Here the risk cannot be modeled because of lack of data as well asdifficulties in calculating the probability of occurrence of terrorist strikes. As far asdata regarding losses or damage due to terrorist attack is concerned, security agencieshesitate to make such information public for obvious security reasons. Secondly ourunderstanding about the motivation and psychology that works behind the organizedterrorist attack is very poor. These factors together make it very difficult to reach at anoptimum premium charges. This results in companies passing the risk and uncertaintyto the insured in the form of unreasonably higher premium and therefore less business.

Secondly, while determining premium rates, location factor is not taken into account inIndia. Some places are industrially advanced and hence economically more developedcompared to others and therefore more prone to risk of terrorist attacks. However therate of premium is same for all these places. This poses a great challenge for theinsurers to develop their business in economically less developed areas.


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CONCLUSION

On November 26, 2008, the city of Mumbai came under a terrorist siege. It was a uniqueattack where the perpetrators came by the sea and used a combination of tools (gun-fire,bombs and grenades) to unleash terror. The terrorists were determined and remorseless andhad pre-determined targets in mind. The 60-hour siege paralyzed Indias financial capital asthe terrorists took over a Jewish centre, randomly attacked local train commuters, tourists at a

popular cafe, the rich and famous at luxury hotels, and overwhelmed the local police force. Inthe aftermath, Mohammad Ajmal Qasab (one of the terrorists) was found guilty on charges ofmurder, waging war on India and possessing explosives.

The 26/11 attacks on Mumbai were equated to the 9/11 of the US. Slogans like,enough is enough were voiced everywhere. The media went into frenzy; there was grief,

candles, frustration, and helplessness in the air. On the second anniversary of 26/11, PM Singh

said: It is this spirit and strength of character of the Indian people that will defeat such forcesthat seek to threaten our social fabric and way of life. We will never succumb to the designs ofour enemies.

The siege of Mumbai was organized by a Pakistani militant group, whichseverely strained India's already tense relations with Pakistan. Three years later, it seems likethe dust is settling down, as there seems to be a course of improving relations between Indiaand Pakistan. In New York, India voted for the inclusion of Pakistan as a non-permanentrotational member of the UN Security Council. Pakistan obliged India by moving towardsgranting it MFN status. Also, the Pakistani military freed an Indian military helicopter thatstrayed into its territory by mistake during adverse weather. However, many people are

pessimistic and consider these moves of Pakistan as hogwash. The collective sentiment is thatPakistan will not change its colors.

On the other hand, the government of Maharashtra claims that Mumbai isnow better prepared to deal with terrorist attacks as it has adhered to the majority ofrecommendations provided by the Ram Pradhan committee to improve security. Plus, it hascreated a unit of 350 commandos on guidelines given by the NSG. The unit has been infunction with the latest weaponry and training by the Indian Army and foreign experts.

While much was promised once the city regained its balance after the attacks, on the

third anniversary of this horrific incident, still a lot remains unsaid and undone. For starters,across the border, there are anti-India sentiments floating in the air. The Pakistan governmentfailed to avoid a protest rally organized by Jud on India being granted the MFN status. The26/11 probe panel chief, Ram Pradhan states that the government has not contacted him in the

past two years on the implementation process. Qasab is maintained like a VIP and a couple ofcrores have been spent on his upkeep. And the National Security Guards (who were the heroesthat saved the day) still lack the infrastructure they need.

Even after countless research studies and reports, coastal security still remainsquestionable. In addition, India is yet to produce credible evidence to Pakistan for it to

prosecute the planners. Plus, there is mounting tension in the wake of communicationsintercepts about another round of attacks being planned to mark the third anniversary of 26/11.


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Tourism has been on a rise, nameless people shot to moments of fame by not celebrating thebirthdays of children that were born on 26/11. The leadership model of the Taj Mahal hotelduring the moment of crisis has secured itself a place at Harvard and the rest have a faintrecollection of who the martyr Major Sandeep Unnikrishnan was.

Still, at the third anniversary of 26/11, there are several unanswered questions.

Why do we just keep issuing warnings? Isnt it time to act?

Why are we trying to be over-friendly at the cost of the lives of our fellow citizens?

Why is Qasab being given a trial, while Bin Laden was spotted and killed?

Despite living in the worlds toughest neighbourhood, it can be concluded that some measures

have been taken to improve our abilities to deal with terrorism. The attacks on Mumbai didgive us a reality check and we did put a positive foot forward. However, it is not sufficient asterrorist cells and threats continue to multiply. The anti-terrorist units created report a lack ofadequate equipment. Plus there is a requirement for a robust system that will enable bettergathering and sharing of intelligence. We should work on preventing strikes and not just

preparing for them.

Terrorist attacks today, are not limited to any specific part of the world buthave acquired an all pervasive and global nature. Occurrence of such events almost everydayhas reinforced the belief that terrorism continues to be the biggest threat to the world at

present. The risk of terrorism is proving to be a complicated and most important challenge for

the insurance industry, governments as well as society as a whole. In this regard, thegovernments of various countries have taken strategic steps for creating laws and policiesrelated to terrorism insurance. Insurance industry, on its part, has put in enormous effort tocombat, manage and alleviate the risk posed by terrorism. They have tried to devise innovativerisk management tools on the basis of the relevant data collected and organized on a globalscale. As far as India is concerned, terrorism insurance scenario is at a crossroad, especially inthe absence of government support. The insurance companies in India under the leadership ofnational reinsurer GIC have begun well by creating IMTP (India Market Terrorism Pool) in2002 realizing the need and importance of terrorism insurance after 9/11/2001 World TradeCenter attack in US. However, 10 years have passed and there has been lot of changes in theglobal scenario. Looking at the magnitude of losses and inadequacy of our pool, lot more is to

be done. To find an optimum solution of the entire problem related to terrorism insurance, anintegrated approach by all concerned parties is a must. Consolidated efforts by all thestakeholders (government, regulator, insurance companies and policyholders) can help todevelop this sector, provided they play their roles in a very positive and innovative manner.


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