1) The document discusses the rise of the Islamic State (IS) militant group and the potential terrorism risk they pose. It traces their origins from Al Qaeda in Iraq and expansion across Syria and Iraq in recent years. 2) The IS now controls significant territory and resources in the region and has established itself as a "caliphate", though no country recognizes it as a sovereign state. It generates revenue through oil assets and other means. 3) While the immediate terrorism threat from IS abroad may be low as they focus on regional battles, involvement of Western countries could motivate IS to attack soft targets globally. IS recruits foreigners who could aid international attacks, and their social media propaganda aids recruitment.

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Al Qaeda 2.0: Assessing terrorism risk
By Rick Becchetti
"See you in New York." How I wish that was a line from a classic Audrey Hepburn/Cary Grant movie.
Instead, this was a statement made by Ibrahim Awwad Ibrahim Ali al-Badri al-Samarrai to his American
captors as he was released from the Camp Bucca detention facility in Iraq in 2009.
The comment that was, for the most part, disregarded when it was originally uttered five years ago
could now be viewed as an ominous warning to the United States, Western Europe and wherever their
expatriates are located. This threat was made by the man now known as Amir al-Mu'minin Caliph
Ibrahim, the head of state and theocratic absolute monarch of the recently self-proclaimed Islamic State
(IS) whose forces occupy areas in eastern Syria and north/central Iraq. The speed to which IS lands
were conquered by their fighters has blindsided many of the so-called experts on the Middle East and
worldwide terrorism.
Can we look back on this
statement and say with
confidence that terrorism risk
has increased by presence of
the world's first caliphate
(Islamic state led by a supreme
religious and political leader
known as a caliph – i.e.
"successor" – to Muhammad)
since the Ottoman Empire?
Perhaps the presence of this
group and their extreme
Islamic ideology will be so brief
in the annals of history that the
threat of an IS organized or
inspired attack is grossly
overstated and an attack is
highly unlikely. Whatever
viewpoint you espouse, the fact that we have in our midst a terrorist organization too savage and
barbaric for al Qaeda (supports a separate militant group in Syria), forces us to analyze the inherent
risk that exists with the IS to the Western world. A careful evaluation of the inherent risk to the world as
this barbaric movement in the Middle East continues to threaten global stability is critical to the world of
group insurance. As a risk expert here at RGA, here's my take on the history of what has led to the
current situation and what the terrorism threat is to the Western world.

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Origins
The extremist Islamic terror activity increased dramatically in Iraq and Syria after the U.S. invasion of
Iraq in 2003. The Sunni Muslim-led autocratic government of Saddam Hussein was overthrown, the
Iraqi army was disbanded and the Shiite Muslims of Iraq, a long suppressed majority, were empowered
by the U.S. forces. The Iraqi Sunni Muslims fought back with the assistance of Al Qaeda in Iraq (AQI),
led by Abu Musab al-Zarqawi and Muslim volunteers from surrounding countries who viewed the Iraq
civil war as Jihad (holy struggle). AQI made the strategic decision to attack Shiite holy sites in Iraq for
the goal of instigating a sectarian conflict making the country ungovernable. After a period of time with
the Shiite militias, Sunni militia-AQI forces and U.S. troops all fighting each other, the environment
started to change in 2005. The moderate Sunni tribes in Iraq were tiring of the brutality they themselves
suffered at the hands of AQI and their extremist interpretation of the Koran (Sharia law). The U.S.
reached out to and paid off Sunni tribal leaders and allowed them to administer the Sunni-dominated
regions of the country with their own forces. The end result was AQI now had to deal with two groups
who sought an end to their activity in the country, culminating in Zarqawi being killed in June 2006.
Also, the U.S. troop surge of 2007 sent an additional 20,000 soldiers to the country which contributed to
the easing of political and ethnic tensions.
Next door in Syria, the Arab Spring (peaceful protests against authoritarian regimes) developed into a
bloodbath for the Syrian people. The result was a group of mostly Sunni militant groups fighting the
secular Alawite (Shiite sect)-led government which has killed around 120,000 as of September 2013
and displacing approximately four million people. The dominant Sunni militia that arose from this conflict
was the Islamic State of Iraq and Syria (ISIS) led by Ibrahim Awwad Ibrahim Ali al-Badri al-Samarrai
who now went by the nom de guerre Abu Bakr al-Baghdadi. ISIS now controls the north-central and
eastern portions of Syria.
After the U.S. forces departed Iraq in 2011, the Shiite-led government started making life very difficult
for the Sunnis in the country. Sunnis were removed from key positions in the government, high-ranking
Sunni officers in the army were replaced by loyal Shiites and public services in Sunni-dominated areas
were scaled back or terminated (e.g., water, garbage, etc.). When the Sunnis then protested against
the government, live ammunition was used on their civilians. Not recognizing the national borders
created by European powers after World War I, ISIS forces eventually started operating in Iraq and
allied themselves with Sunni tribes and former Baathist Party (ruled Iraq under Saddam Hussein)
members, taking over cities and towns north and west of Baghdad with the crown jewel (thus far) being
the capture of Mosul in the north.
Even though no country recognizes the Islamic State as a sovereign
nation, this has by no means hampered IS administration and control
of the lands and people they have recently conquered.
Current Environment
Even though no country recognizes the Islamic State as a sovereign nation, this has by no means
hampered IS administration and control of the lands and people they have recently conquered. Caliph
Ibrahim has asked for doctors, engineers and Islamic jurists around the Muslim world to join him in
building this new society. The IS is spending millions of dollars providing food, donating to charities and
maintaining public works for the purpose of securing the allegiance of the Sunni-majority cities and
towns it has taken over with the assistance of other militants in Iraq. The IS spoils of war includes a
treasure trove of weapons, including 1,500 Humvees, 52 Howitzer artillery guns (range of 20 miles),
Russian-made tanks and rocket-propelled grenades.
Financially speaking, the IS is quite well-off. Besides controlling oil fields in Iraq and Syria, IS is
generating revenue from bank thefts ($400M from the central bank in Mosul), extortion rackets,

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kidnapping, robberies, smuggling, levying taxes on the populace of conquered cities and towns, along
with contributions from sympathetic donors, a large number suspected originating from Kuwait, Qatar
and Saudi Arabia. As of now the IS total cash reserves is estimated to be around $2 billion.
Though weapons and cash should allow the IS to be around for some time, their beliefs, policies and
alliances could very well dismantle their Middle East reign. Sharia law is the legal framework which
regulates all aspects of public and even private life for the people living within the IS. Their medieval
approach to this Muslim doctrine assigns the punishment of amputation for theft, death by stoning for
adulterers and no mercy for apostates (Muslims who convert to other religions), which will make life
very difficult for the inhabitants of IS lands. IS fighters have also committed atrocities that would qualify
as war crimes, such as beheadings and crucifixions of captured combatants. Lastly, the alliance with
the Sunni tribes that have worked with the IS for the main purpose of weakening the central
governments in Iraq and Syria will not be a long-term arrangement. Once each group's goals have
been met, one might predict that these "allies" will turn on each other to control the Sunni-dominated
regions.
Terrorism Threat
The probability of an IS-directed attack in Western countries is minimal at this time as the "caliphate"
has higher priorities on the Middle East battlefield. This could change dramatically though if Western
nations become directly involved in the Syria/Iraq conflict and face off against IS fighters for the first
time. Even though the IS possesses some sophisticated weaponry, they would still be at a
disadvantage if Western powers entered the battlefield. The losses then suffered at the hands of a
possible U.S.-led coalition would be the incentive to perpetrate attacks on soft targets in the U.S.,
Europe or wherever in the world their citizens are residing.
Intelligence experts estimate that IS has around 12,000 fighters in Syria and Iraq, and 3,000 of those
are believed to originate from Western nations, including around 100 from the United States. It is
unsettling to know that these are individuals with passports from their home countries who could travel
freely for the purpose of planning attacks on Western targets; the IS could very well view these people
as useful pawns in their international objectives. IS has made a point of accommodating foreigners.
Unlike al Qaeda, the IS controls swaths of ever-expanding territory, an appealing fact to potential
recruits along with the opportunity to be involved in a military-type adventure. Training camps are
already sprouting up in IS territory, with recently released videos showing fighters receiving instructions
on bomb making, use of weapons and martial arts.
Global enlistment for jihadi causes would be quite difficult in this day and age if social media was not
utilized, and thus far it seems that the IS is taking full advantage of these recruiting tools for spreading
their propaganda. The use of Twitter, Instagram, Facebook, Internet videos and even an Android app
("The Dawn of Glad Tidings") by IS fighters and supporters has demonstrated their ability to target
young men. It keeps them engaged by spreading their messages, beliefs and news via social media to
receptive individuals.
The obvious target demographic for IS recruitment is young men who feel misguided, lost, polarized or
outcast in their current surroundings. Joining their cause, they can finally find purpose in their life, even
if it involves martyrdom. Europe has long needed immigrant labor but questionably has not done
enough to integrate those who originate from Muslim regions. The children of the immigrants grow up
without close ties to their adopted nations and sometimes end up being susceptible targets to radical
Islamists.
Illegitimate governments that do not have a mandate from the masses are fleeting and experts predict
the Islamic State will be no different. The challenge for Western intelligence agencies is to fully grasp
the risk of an IS-organized attack on U.S. and European soil and monitor the activity of Caliph
Ibrahim's followers.

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ABOUT THE AUTHOR - Richard D. Becchetti
Richard D. Becchetti, Senior Risk Management Analyst at RGA Reinsurance
has over nine years of exposure management and catastrophe modeling
experience along with a Certified Catastrophe Risk Analyst (CCRA)
designation.
RGA Group Insurance Insight is published by the Group Reinsurance Teams of RGA Reinsurance. This publication’s mission is to provide
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