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AIG Global Energ y AIG: Terrorism and Risk Management AIG Global Energy provides insurance, engineering, and loss contr...

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AIG Global Energ y

AIG: Terrorism and Risk Management AIG Global Energy provides insurance, engineering, and loss control, claims and risk financing services worldwide for utilities, power generation, oil and petrochemicals, chemicals, and mining.

There have been sporadic losses incurred in the energy sector as a result of terror activity over the decades. Recent world events, however, have thrown a spotlight on the adequacy of “routine consideration.” For American companies in particular, an invigorated approach to risk management planning has never been more important. The increasing globalization of well-funded terror movements, as well as domestic saboteurs who have been emboldened by the impact of increasingly public attacks, calls for the planning process of companies to quickly adapt and remain fluid. The State Department and the FBI have stated that al-Qaida operatives have been specifically trained to conduct large- and small-scale attacks against nuclear, petroleum, and utility assets. The government frequently notes that power plant facilities, electricity distribution grids, and hydroelectric dams are high-ranking targets because of the economic and social disruption that can be caused. We suggest that the universe of risk within the sector is much broader. Energy-related risks ranging from power plants to small but vital natural gas metering stations are valuable targets to terrorists. Equally important are chemical industry exposures. Once the domain of security managers and plant managers, the risk of serious security breaches warrants the active involvement of a company’s executive management and the awareness of its board members. Some areas that should be assessed include: • Production equipment, including digital control systems and programmable logic controllers • Storage tanks and process vessels • Boilers

• Raw and hazardous materials • Intra- and inter-process unit layout and spacing • Tank farm and jetty layouts • Water supply • Telephone, IT systems, and data lines • Training and readiness of on-site emergency personnel and operations • Fixed firefighting system adequacy and the presence of mobile firefighting apparatus Tactics to organize and execute comprehensive plans can strain employee resources. As such, professional security consultants are increasingly being used for vulnerability assessments and the preparation of crisis containment plans. Well constructed, comprehensive risk management and crisis response plans may very well influence whether a facility is chosen as a terrorist target, or whether a company can successfully mitigate and withstand losses incurred as a result of a terrorist act.

About AIG Global Energy AIG Global Energy has been servicing the energy and highly-engineered risk industries for more than 50 years. Our approach to providing a full spectrum of client solutions, coupled with technical expertise, substantial insurance capacity, financial stability, and a record of innovation, has assisted companies around the world. We provide property, casualty, management liability, and environmental liability insurance, engineering, and loss control, claims and risk financing services worldwide for the utilities, power generation, oil and petrochemicals, chemicals, and mining sectors. American International Group (AIG) is the world’s leading U.S.-based international insurance and financial services organization and the largest underwriter of commercial and industrial coverages in the United States. Products and services provided by AIG Global Energy, a member of American International Group, Inc., are endorsed by the U.S. Chamber of Commerce for its members.

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www.aig.com CONTACT INFORMATION Ralph Mucerino AIG Global Energy President Richard Shaak President, Starr Technical Risks Agency, Inc. Bert Armellino President, AIU Energy Jim Vendetti President, AIG Global Energy Casualty AIG Global Energy 70 Pine Street, 15th Floor New York, NY 10270 Phone 212.770.7000 Fax 212.425.3858 BUSINESS CONTACT

Terrorism Insurance Contact Marz Chhor Vice President [email protected] Phone 212.770.6079 Utilities Business Contacts Jay Podorowsky Vice President [email protected] Phone 860.722.5298 Tim Kania Vice President [email protected] Phone 212.770.5943