Ben Lockwood, Deputy Head of Specialty — AEGIS London.

So-called ISIS may no longer pose the same nature of threat to the Middle East that it did two to three years ago, but AEGIS London’s Ben Lockwood says the terrorist organisation’s fragmentation has its own dangers.

According to some commentators, the Islamic State’s dream is over. The fall of Raqqa last year heralded the beginning of the end for the terrorist group that set out to create its own Caliphate in the Middle East. It was a dream built with bullets, bombs and violence on a previously unprecedented scale in the region. Clever use of social media and the filming of atrocities to show the world just how single-minded ISIS was in its cause created revulsion in the West. Governments and militaries mobilised. The dream could not be allowed to become reality.

Today, a sustained military effort across Iraq and Syria has transformed Isis from pseudo-nation state into a disperse and loosely disconnected insurgent force. Although geographically and, to a lesser extent, organisationally fragmented, it is important to note that the group remains ideologically and strategically aligned. The danger it poses is not over; it is evolving into a new type of threat.

Isis still has strongholds in Syria but its modus operandi has changed. Many thousands of its fighters have dispersed across the region. Some have gone to new conflicts in areas like Libya, Egypt’s Sinai Peninsula, Yemen and Afghanistan; others have been encouraged to return to their home countries. Others have embedded themselves in majority Sunni regions of Iraq and Syria; whose populations view the return of Shia-dominated governmental control with suspicion and hostility.

Multiple threats

In many ways, this fragmentation makes Isis an even more difficult nut to crack. Its reduced ability will likely coincide with a shift to softer targets – very often civilian ­– as its loses the ability to go toe-to-toe with military forces. Seeking to violently fragment societies along sectarian lines – and exploit the socio-political chasms they help create – remains at the core of its strategy.

Andrew Parker, head of M15, recently said that the UK has never faced such a diverse and high tempo series of attempted and successful bombings, shootings and stabbings in his 34-year career. The accelerating pool of returning fighters along with those inspired online are providing a conveyor-belt of potential attackers. As Mr Parker worryingly put it in an interview: “We have not yet reached the high-water mark.”

The UK government has identified approximately 850 people from the UK that travelled to support or fight for Isis in Syria and Iraq. Many of these have been killed, some are still there, some in hiding, and some have returned home. Tracking and identifying these suspects is an extremely difficult challenge for any government. We must also consider those who didn’t travel overseas but were ‘inspired’ to conduct attacks by the effective online Isis propaganda machine, along with those the government is simply not aware of.

Underwriters respond

The actions of returning Isis fighters – along with those inspired overseas – have served as a major wake-up call to many insurers in territories previously seen as facing a relatively benign level of risk such as Belgium. There is a clear desire on the part of what remains of the Isis leadership to take the fight to the streets of Europe and, where possible, the USA as recent attack of recent years have shown. Would-be assailants have been encouraged to use whatever means available to cause maximum destruction. So, on the one hand we have relatively large or sophisticated attacks such as the Brussels and Manchester bombings, or November 2015’s Paris attack; on the other, relatively unsophisticated attempts like the lethal vehicle rammings in Nice, London, Berlin and New York.

It is this latter form of low-tech attack that has led to increased inclusion of insurance covers that are not so dependent on a ‘traditional’ physical damage trigger to the policy; with cover – and claims – for the likes of Denial of Access, Loss of Attraction and Active Assailant being increasingly included, often with increased limits. The market is aware of the changing nature of the threat faced by insureds and is responding accordingly.

Prospects for the region

Looking to the future, many of the underlying grievances that enabled ISIS to gain strength in the first place remain. That said, the security vacuum the group filled in northern Iraq and during earlier years of the Syrian civil war has been occupied by other forces so it is difficult to see it regaining the kind of territory it held in 2014–15.

Syria and Yemen will likely remain in a state of civil war for the foreseeable future as the flames of conflict are fanned by outsiders on both sides. Iran will seek to spread its influence further and deeper in the face of Saudi resistance, while Israel’s tolerance for a strengthened and emboldened Hezbollah on its doorstep in Lebanon is likely to run out in an explosive way sooner rather than later. In many respects, Isis is only a relatively small piece of a bigger and potentially much more worrying puzzle across the region.

For ISIS itself, the coming years will see a different and more fragmented group, in a similar way to how Al Qaeda adapted after the loss of its Afghan core in 2001. Military action can help cure many of the obvious symptoms of the ISIS problem but do little to address the causes. The key point is that whether it’s called Isis or something else, this phenomenon will be with us for a long time to come. The dream has faded but it is not over yet. The world, including the London market, must be vigilant for what comes next.

 This article was first published in Insurance Day 16 Mar 2018.