Valor, empowerment, belonging.

Three words that sound like they could be a rallying cry for joining the U.S. Marines form the message that draws disenfranchised individuals to terrorism, a New York City Police Department official said early this month.

Two weeks before a lone gunman shot more than 50 people in the Orlando nightclub Pulse, killing 49, John Miller, the head of a police unit that monitors potential terror activities in New York City, described the changing nature of terror and terrorists to a group of insurance claims professionals at an industry conference.

The paradigm has shifted, said Miller, Deputy Commissioner of Intelligence and Counter-terrorism for the New York City Police Department, noting that what keeps him up at night are not low-frequency, high-impact events. While the NYPD is preparing for coordinated nuclear, chemical and biological attacks, recent plots foiled by his unit show a growing number of individual actors that are enamored with the ideas communicated on ISIS propaganda videos, he said during a keynote address at the U.S. Regional Conference of the International Association of Claims Professionals.

“The kid who’s not making it in school, 26 years old and living in his parents’ house down in the basement—who can’t hold a job, who doesn’t have a network of friends, who is in discord with their own family. They belong to nothing.

“But then the glow at 1 o’clock in the morning of that iPad [as they] start to watch these films…becomes a very strong elixir,” said Miller. Messages include: “You could be a brave fighter. That’s valor. You could do something that matters beyond yourself—be a part of something larger and more meaningful than your own existence. That’s belonging. You could strike out and become a martyr, go to paradise and become a hero. That’s empowerment,” he explained, providing the types of messages that terror analysts believe motivated two men who planned the beheading of the New York woman a year ago before being intercepted by police.

While not every attacker fits the profile, more and more of them do, said Miller, noting that the videos that would-be attackers are watching are cheap to make but very well thought out and extraordinarily compelling.

The Paradigm Shift

Miller, who is also a former television journalist who conducted a face-to-face interview with Osama bin Laden in Afghanistan in 1998, noted that bin Laden eerily predicted what Miller referred to as a paradigm shift during that interview.

Referring to the details of seven pages of single-spaced transcripts of the interview, Miller recalled asking bin Laden if he was worried about being captured or killed by the U.S. He was not, the transcripts reveal. His organization was meant to survive him, and the organization would morph into a network. Toward the end of the interview, bin Laden said, “‘The network will become a movement and the movement will become global,'” Miller reported.

“If you fast-forward through history, bin Laden’s vision is not far from what happened. Al Qaeda ended up recruiting the other groups in, they became affiliates [that then grew into] a network of affiliates…

“It went from being that group to a group that broke away that called itself ISIS,” he said. Now the movement attracts followers from all over the world to Syria, and an extended network behind it. “‘If you can’t come here, fight for us where you are anywhere in the West.’ That means attacking intelligence, military, law enforcement, wherever you can with whatever you have at hand,” Miller said, interpreting the videos.

“And then we began to see the very low-end attacks. Not the Paris attacks that we saw in November, but a man with a hatchet striking cops in the head in Queens, [N.Y.], an individual with a pickup truck running down soldiers in Canada, a guy with an antique 30-30 Winchester rifle running into the Parliament in Canada and shooting it out with security there.”

Why is this occurring?

Intelligence experts in the NYPD watching the same videos that these actors have been viewing explain what has changed since the days of the bin Laden interview to offer part of the explanation. In contrast to the bin Laden videos, which were “about the messenger,” the new videos are not about the leaders. “You never see the star of an ISIS video,” Miller said. Like the premise of a strong advertising campaign, “the message is more important than the messenger”—and the message is similar to the one police departments and military organizations use to draw recruits. “They promise valor, belonging and empowerment,” Miller said.

Twenty-Three Plots

Miller, who started his talk by describing the success of the New York Police Department in bringing crime levels down to historical lows under the leadership of Commissioner William Bratton, asserted that New York remains the No. 1 target for terrorists in the world. There have been 23 plots originating in or targeting New York City since 9/11, which is more than Los Angeles, Chicago or even Washington, D.C.

Explaining how these have been exposed, Miller said that 1,500 people are assigned to intelligence and counterterrorism in his unit. That includes “computer people who are operating in jihadi forums online everyday [seeing] who’s talking about attacking New York and the United States,” in addition to “a network of people who are human sources of information who feed us updates from the places they are,” as well as undercover investigators.

An undercover operation led to the arrest of an individual from the Bronx, N.Y., who was planning to travel to Syria overseas to become a fighter for ISIS. “As a U.S. person, he had the full ability to come back to New York after being trained and hardened [in] Syria and would have been a threat here,” Miller said.

Among the indications of the increasing threat he posed to Americans or Allied forces in Syria were the items the members of the counterterrorism group saw him ordering on eBay and what he was looking at on Amazon Prime—a Marine Corp combat fighting knife that could be used for beheading; handcuffs; a garrote for strangling people; plastic ties; and a long, black-hooded cape, Miller reported.

“If you read the daily reports coming in from the electronic intercepts [and those] of the undercovers, [there is] a great intelligence collection platform…We were learning a lot about how the network works by watching this person and the people around him. But he was getting too close,” Miller said, explaining the need to stop the surveillance and make an arrest.

“There are a couple of those in the hopper,” Miller added. “I can say that without violating a secret. I can say that at any time of the year because at any time of the year there are three or four of these cases going on,” he said, describing a plot by two individuals in Queens, N.Y., to put a pressure cooker bomb in a crowd watching July 4 fireworks and two women who had revealed their intention to bomb “legitimate jihad targets.”

In the latter case, the women “had determined that military and police were legitimate targets,” Miller said, noting that they had watched television coverage of a funeral of two slain New York police officers that had drawn a crowd of police officers from all over the nation. That sparked an idea to plan a pressure cooker bombing on the next similar occasion—”to get the largest number of police in one place without injuring civilians.”

“Other terrorists don’t care one way or the other about civilian targets as opposed to police or military,” Miller said, noting that while all the undercover work is helping to profile the new faces of terrors, there are still anomalies. The San Bernadino shooters, for example, unlike the video-viewing alienated “losers” that Miller described, “were living the American dream. Yet, they turned on the country they called home [with a] massacre on a community where they served as public servants.”

“The messaging can be just as powerful” for them, Miller said.

While in many ways “bin Laden’s arc—from a corporate ladder of al Qaeda hierarchy to a network to a movement—is where we’ve ended up,” Miller said “the good news is all these years after 9/11, in the biggest city in the U.S. with 8.5 million people with every kind of symbolic, economic or government target…we haven’t had a successful terror attack here despite 23 plots that we’ve unraveled, and more to unravel.”

“Someday, some plot will succeed because as we learned from Fort Hood or San Bernadino, there’s always going to be somebody who’s not talking to anybody, [who] flies under the radar screen. But we have built up a response capability that we hope will capture that with intelligence and prevent it, and if not, will respond to it with such speed, such professionalism, such training and tactics that whatever form it comes in, it will be minimized,” he said.

New Insurance Solutions Needed

Separately, in a report published in March, JLT Re and JLT Specialty Limited, like Miller, reviewed the changing terror risk paradigm, noting that the Islamic State’s “exploitation of modern communication forums has become a powerful recruitment tool.”

Interpreting the same trends that Miller did in terms of insurance risk, JLT noted generally that while the “risk in the 1990s was characterized by groups—typically with domestic agendas—targeting high-value properties with large vehicle-borne improvised explosive devices (LVBIED) to achieve political ends, terrorist attacks carried out by Islamic extremists have focused primarily on crowded spaces in order to cause mass casualties.”

According to the JLT report, “Viewpoint: Rising to the New Terror Challenge,” Islamic terrorists are “also known to be exploring opportunities to launch cyber attacks on critical national infrastructures in the West.”

This “new reality” means that terrorism insurance solutions need to change, the report said.

“Traditional terrorism policies were designed to protect against catastrophic terrorist events where property damage was a major loss component and business interruption was a direct consequence of the physical damage sustained during an attack. This is no longer necessarily the case,” the JLT Viewpoint report noted, referring, for example, to estimates of economic losses from the November 2015 Paris attacks in the range of $9 billion to $12 billion from the Cambridge Centre for Risk Studies. Insured property losses related to the Paris attacks are minimal, the report said.

Although insurers have expanded coverage for business interruption resulting from non-physical damage, gaps in coverage remain, the report said, noting the boundaries of traditional coverages outlined in the graphic below.

An optimal solution for insureds would have the standalone market focusing on protecting against the full range of impacts that reflect today’s terrorism environment—represented by the circles above. New insurance products should provide comprehensive protection against all risks, including property damage, CBRN (chemical, biological, radiological and nuclear), business interruption, impacts on people, non-physical damage business interruption, cyber (including cyber business interruption and cyber extortion), and damage to brand and reputation.

The report noted that no such comprehensive solution existed as of the date of the report but that JLT was working with market participants to develop more relevant products. One obstacle so far has been a lack of reinsurance support for some of the more systemic perils, such as CBRN and cyber, where aggregation potential is a primary concern and where collaboration between reinsurers and state pools may be warranted.

“Any long-term solution will realistically require the involvement of global terror pools as well as private risk carriers, with pools potentially taking on more systemic risks and the standalone market providing broadened coverage and new products to reflect the prevailing threat that exists today,” the report concludes.