On November 13, 2015, the multiple terrorist attacks on Paris began with a suicide bomb blast at the 81,000 capacity Stade de France soccer stadium, where France were playing Germany in an international friendly. Soccer is the world’s most popular game, and terrorism is the language of being noticed. When France hosted the FIFA World Cup in 1998, Algerian terrorists planned to attack the opening match in Marseille between England and Tunisia, and follow-up by attacking the U.S. soccer team in their Paris hotel. Fortunately, a mole inside the Algerian terrorist organization passed on intelligence to the French security service, and the plot was disrupted.
The following FIFA World Cup in 2002 was hosted jointly by Japan and South Korea. But between 1998 and 2002 was the Al Qaeda attack on September 11, 2001. This changed everything for insurers offering event cancellation coverage. AXA nervously withdrew its cover for FIFA; Warren Buffett stepped up to the penalty spot as the insurer of last resort. The heightened security during the 2002 World Cup managed to keep terrorists at bay, but FIFA struggled to find event cancellation coverage for the next World Cup in Germany in 2006.
“For the Good of the Game” is a FIFA slogan, which RMS took to heart in assisting FIFA with obtaining the event cancellation coverage which its commercial sponsors insisted upon. RMS undertook a pioneering terrorism risk analysis which supported the successful issuance in 2003 of US$260 million of investment grade event cancellation bonds. To this date, this remains the only catastrophe bond issued with terrorism as the principal peril.
The 81,000 capacity Luzhniki Stadium in Moscow, will hold seven FIFA World Cup 2018 fixtures, including the FIFA World Cup Final. Image credit: Mos.ru
Over the past decade, FIFA’s finances have recovered, and the terrorism insurance market has stabilized. Furthermore, counterterrorism surveillance has been sufficiently intrusive as to disrupt the great majority of ambitious terrorist plots. Counterterrorism operations need to be extensive, because of the scale of the threat. Islamic State media has called repeatedly for attacks on the FIFA World Cup, hosted by Russia. In response to these persistent threats, Russian security forces have launched a series of raids in the Caucasus region over the course of the last year and have arrested cells throughout Russia.
The stringent security measures put in place to protect the World Cup have been rewarded by the safety of the entire tournament for players, officials and spectators. In common with President Trump who has long admired Vladimir Putin’s “strongman” characteristics, soccer fans around the world can be appreciative of an ex-KGB officer being President of Russia.
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Gordon is a catastrophe-risk expert, with 30 years’ experience in catastrophe science, covering both natural and man-made hazards. Gordon is the chief architect of Moody's RMS terrorism risk model, which he started work on a year after joining RMS in December 2000. For his thought leadership in terrorism risk modeling, he was named by Treasury & Risk magazine as one of the 100 most influential people in finance in 2004. He has since lectured on terrorism at the NATO Center of Excellence for the Defense against Terrorism and testified before the U.S. Congress on terrorism-risk modeling.
As an acknowledged, international expert on catastrophes, Gordon is the author of two acclaimed books: “The Mathematics of Natural Catastrophes” (1999) and “Calculating Catastrophe” (2011). Dr. Woo graduated as the best mathematician of his year at Cambridge University and he completed his doctorate at MIT as a Kennedy Scholar and was a member of the Harvard Society of Fellows. He also has a Master of Science in computer science from Cambridge University.
