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Cyberterror likelier as Islamic State loses physical territory: UK reinsurer

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Cyberterror likelier as Islamic State loses physical territory: UK reinsurer

Islamic State's loss of physical territory could spark more cyberterrorism attacks, a former high-ranking U.K. intelligence official has suggested.

Writing in the inaugural edition of U.K. government terrorism reinsurer Pool Re's quarterly terrorism frequency report, Conrad Prince, former deputy head of U.K. intelligence agency GCHQ, noted that Islamic State, also known as Daesh, is known to be "highly effective" in its exploitation of the internet.

He said: "As Daesh lose more and more control of physical territory it seems likely that they increasingly focus their efforts on cyber space. The cyber conflict with Daesh has a long way to run yet."

Islamic State has suffered military defeats in Iraq and Syria, which Pool Re said elsewhere in its report, published Feb. 2, 2018, could signal the collapse of the physical caliphate it was trying to build and prompt the move to a "virtual caliphate" occupying "the ungoverned spaces of the internet" and "failed states."

Prince said that so far, terrorist groups have engaged in cyber vandalism of websites and may also have experimented with denial of service attacks — cyber attacks that flood online servers with information until they shut down. He said they seem to lack the capacity for "a serious destructive attack," although this apparent lack of capability is unlikely to last.

"The tools needed for cyber attacks are being increasingly commoditized available for purchase or hire on the dark web from criminals happy to provide their services to the highest bidder, " he said. "Terrorists may be able to exploit sophisticated tools and techniques developed by nation states, should they become available on the open market as a result of an unauthorized disclosure."

Pool Re said in November 2017 that it would expand its coverage to include material damage and direct business interruption resulting from acts of terrorism with a "cyber trigger." It also said it would give companies discounts on its cyber cover if they took steps to mitigate their own exposure.

Pool Re's report also warned that the advent of a "virtual caliphate" could result in a greater number of more conventional terrorist attacks. The reinsurer's head of risk analysis, Ed Butler, said: "If [a virtual caliphate] is the case, then we will be returning to a similar situation recognized pre-Caliphate, when successful drone strikes in the tribal areas of Pakistan forced aspiring terrorists, with nowhere else to go and fight, to undertake more attacks against the Western world."

He added: "In future, these threats are unlikely to reduce, with Islamist extremism being the main driver. More attacks should be expected in the U.K. in 2018 and these are likely to be focused against crowded places, particularly those linked to the transport sector, the military, police and politicians."

There were 226 terrorist attacks globally in the fourth quarter of 2017 across 43 countries, Pool Re's report said. The attacks killed at least 2,248 people and injured 2,546.

The Middle East and North Africa was the worst-hit region, with 91 attacks in the quarter. Europe suffered four attacks, and Russia and the CIS countries had 6. There were none in the U.K., although the country was struck five times earlier in the year, causing 36 deaths.

Those attacks included the bombing of the Manchester Arena after a concert May 22, killing 22; and attacks in the Westminster and London Bridge areas of London, in which vehicles were used to target pedestrians, killing five and eight, respectively.

Pool Re was established in 1993 after the Provisional Irish Republican Army bombed the Baltic Exchange in London, amid fears that insurers could stop writing policies for commercial properties. Its remit was expanded in 2002, after the Sept. 11 terror attacks.