In a similar way to the flow of water, which seeks the path of least resistance, the flow of al Qaeda activity is toward weapons and targets that present the lowest technical, logistical, and security barriers to mission success, said Gordon Woo, a mathematician who developed a terrorism model for Risk Management Solutions, Newark, Calif.

Following the high-profile attacks of September 11, Gunaratna expects to see only medium and small attacks. Larger attacks, he noted, take years of planning across more than one country. He said the planning for the September 11 attacks took two years. [Al Qaedas] capability to conduct big operations has diminished due to having some of its leaders captured and to increased security within the United States, said Gunaratna. If the present level of security is maintained, we will not see large-scale operations for the next few years.

Woo agreed, noting, On the one hand, we have al Qaedas desire to maximize the utility of their attacks, and on the other hand, we have to consider their rational response to stepped-up security and counter-intelligence efforts, and the constraints of their technological and logistical capabilities. Gunaratna warned, The core of al Qaeda is intact. Woo said the United States suffers from a huge under-funding of homeland security, and that wont go away until there is another major attack.

Hemant Shah, president and CEO of RMS, said, There are relatively few targets of sufficient utility to an organization like al Qaeda. Nonetheless, he added, the near-term risk is driven by possible use of conventional weapons. A likely mode of attack would be a swarming scenario in which several targets would be attacked simultaneously in an effort to overwhelm a citys resources, said Shah.

Speaking of his firms computer modeling of potential terrorist activities, Shah said, There are a lot of uncertainties in the model. There are a lot of assumptions we need to make. Woo added the sophistication of such models will improve over time, and such models might be useful to the government in prioritizing protection of likely targets. Ara C. Trembly

Risk Modelers Hope Its Just a Game

Three risk management companies have released terrorism assessment models for the insurance industry within the last two months. Joining Risk Management Solutions (www.rms.com) in presenting terrorism models are AIR Worldwide Corp. (www.air-worldwide.com), which released AIR Terrorism Loss Estimation Model, and EQECAT, Inc. (www.absconsulting.com), which released its EQECAT terrorism model. The models assist insurers in examining potential risks in the property, workers comp, and life insurance areas from catastrophic terrorist attacks.

In the past, RMS, a product and service provider for the risk management industry, has dealt with risk modeling for natural catastrophes, but Peter Ulrich, managing director enterprise risk for RMS, says, This is different from what weve done in the past. Nature is not malicious, but terrorists are. Their goal is to find the biggest weapon to attack the biggest target in the biggest city at the worst time of the day.

RMS borrowed from Nobel Prize-winning mathematician John Nash and his Game Theory. Ulrich says it is basically a war game where each side has limited resources. Im trying to anticipate what youre going to attack, and you try to anticipate where Im going to defend, he says.

RMS came up with approximately 1,500 credible targets across the U.S. The targets are a mixture of high-profile structures, facilities, and landmarks as well as central business districts of significant cities across the country. The model also considers various attack modes from conventional weapons to improvised weapons along with chemical, biological, radiological, and nuclear scenarios.

Both the AIR and EQECAT models treat terrorism in a probabilistic manner. The AIR model analyzes threats posed by extremists, both domestic and foreign, and the potential impact of their actions on insurers and reinsurers and their books of business. The problem business faces today is the uncertainty about coverage, exclusion, and price, according to Karen Clark, president and CEO of AIR Worldwide, a subsidiary of ISO.

The EQECAT models property damage functions are based on historical and test data, and engineering analysis with workers comp vulnerability functions derived from extensive claims data, according to Dr. Mahmoud Khater, chief technology officer at EQECAT. Experts from ABS Consulting, which owns EQECAT, and from outside the company assessed the likelihood of attacks and the targets and hierarchy assigned to the different modes of attack. Robert Regis Hyle

Awards

Progressive.com Named Top Insurance Web Site

The Web Marketing Association (WMA) has honored auto insurer Progressive Insurance with its Best Insurance Website award for 2002. The Web site (www.progressive.com) was judged for its innovation, navigation, interactivity, content, ease of use, and usefulness to target audience.

Weve worked hard to make Progressive.com the site all consumers can use to better understand and manage their auto insurance, says Toby Alfred, site manager for Progressive.com. Among the innovations cited by the WMA is a rate ticker that displays a sampling of comparison rates provided to consumers across the country. The spread in rates available from different companies represents a clear opportunity for consumers to save money on auto insurance, says Alfred.

This is not the first award for Progressive.com. Gomez, Inc. (www. gomez.com), an Internet measurement firm, has rated the site No. 1 for six consecutive rating periods.

Survey

Majority of Claims Professionals Describe Technology as Adequate

In a recent online survey conducted by Claims magazine (sister publication of Tech Decisions) through its electronic newsletter, Claims eNews, claims professionals were asked whether the technology they currently use fits the bill. Of 68 respondents, 65.5 percent used the word adequate to describe their feelings about their technology. Fourteen percent replied they needed more technology help, 10 percent said they dont understand their technology and need more training and instruction, and seven percent said the technology they use is antiquated. And what of the remaining 3.5 percent? With their heads firmly placed in the sand, they longed for the good old days.

Online Initiatives

Travelers Agents Get Claims Notification

Electronic claims notification (ECN) is available to independent agents of Travelers Property Casualty for auto, property, and liability claims as an enhancement to the agency portal offered by the P&C insurer. The Travelers agency portal provides agents access to systems, forms, and applications that they use on a daily basis. ECN gives the agents notification when one of their customers has opened or closed a claim.

Electronic claims notification provides another tool that frees up time for an agency for other aspects of sales and service to their customers, says Brian MacLean, executive vice president of claims services for Travelers.

ECN allows agents to view details of claims directly from a claims roster, receive financial information for claims, and manage content with various tools for sorting, summarizing, and printing. Access to the agency portal can be gained through www.travelers.com.