What the Charlie Hebdo Attack Means for Risk Assessment

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Robert Meyer and Hugh Carnegy discuss the impact of the Charlie Hebdo attack.

The brutal attack on the offices of the French satirical weekly magazine Charlie Hebdo that left 12 dead Wednesday could force insurance companies and governments to reassess their perceptions of the scale and reach of terrorist groups. While two brothers armed with Kalashnikovs who stormed the magazine’s offices shouted that they belonged to Al Qaeda, that link is yet to be ascertained.

If it is found that a larger group was at work in the Paris attacks, it is a game changer [for] insurers and governments that provide reinsurance in terrorist attacks in how they approach and think about the risks associated Twitter ,” said Robert Meyer, Wharton marketing professor and co-director of the school’s Risk Management and Decision Processes Center

Hugh Carnegy, executive editor of the Financial Times in London and former Paris bureau chief for the paper, said Paris has seen several terrorist incidents in recent years, but they have been mostly one-off attacks and on a smaller scale than that on Charlie Hebdo’s offices, which culminated in police on Friday killing the two brothers suspected of the shootings. “What shocked people was the planned and cold-blooded brutality of this [attack],” he said.

Meyer and Carnegy discussed the ramifications of the attack on the Knowledge@Wharton show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

The Cost of Tolerance?

“If it is found that a larger group was at work in the Paris attacks, it is a game changer [for] insurers and governments.”–Robert Meyer

When the shootings occurred, Meyer happened to be teaching in a classroom six or seven blocks from the attack site. He said that because the attack had a “targeted purpose,” many in Paris looked at it like an assassination and not just a random attack on people. As he went home later in the day, Meyer’s taxi driver said such attacks were “the cost of tolerance,” referring to “the many mechanisms in Europe that allow publications like Charlie Hebdo to exist.” Such risks flow from the tolerance required in a multiethnic society, said Meyer. Carnegy said Charlie Hebdo has been a “provocateur” that has often lampooned not just Islam (the purported reason for the latest attack), but also Catholics, Jews and other groups.

In any event, “now the scale of the risk [that the Paris attack] represents is significantly higher [than earlier],” said Meyer. “All of a sudden, the possibility that this is a coordinated attack that might threaten other locations and might begin to threaten other forms of business could have very profound ripple effects.” He added that even if a group claims responsibility for this, the possibility exists that it is not actually responsible and is merely trying to gain some publicity.

French police on Friday also raided a kosher supermarket in Paris where a man believed to be an associate of the two brothers suspected in the Charlie Hebdo attack was holding an unnamed number of people hostage. That man was also killed, and the hostages were freed.

Meyer agreed that from his standpoint as a risk management expert, the Charlie Hebdo attack represents the scariest type of event in that it was organized, quick, tactical and there was no way to prepare for it. “[Also,] there is a lot of uncertainty as to what degree we are seeing … the tip of the iceberg,” he said. “We think we have a handle on [the risks] and we have a sense of what the scale is, and all of a sudden, what we could be seeing is some very, very large, unknown tail of the possible cause of these things.”

The ‘Blow-back’ Threat

Carnegy said the Paris attacks will also alarm France and others in Europe about the source of terrorists. “France has been the biggest source of people from European countries going to join the jihadist Islamic radical groups fighting in Syria and Iraq. And the authorities in France and other European countries have been worried for a long time about what they term ‘blow-back’ — that some of these people will come back and start carrying out attacks on home soil,” he said. “If this does turn out to be that type of characterization, then it speaks to a very deep-seated concern about where we are with this type of radicalization in European society.”

In assessing the risks of jihadists returning home, the main focus in Europe has been on the militant group calling itself the Islamic State, said Carnegy. He noted that while the Islamic State is “an extraordinarily extremist group,” it has thus far not mounted planned attacks in Europe or against other Western targets. The Islamic State’s actions have been more in the nature of inspiring “like-minded militants to do something on their own,” he added. 

“This is an event that has really touched a nerve in France. People have been determined to come out and say, ‘Look, we are not going to bow the knee to this stuff.’”–Hugh Carnegy

Responding to Terrorism

Carnegy also pointed to differences between terrorist attacks in Europe and in the U.S. Europe, he said, has had different streams of extremists who have launched terrorist attacks, such as the Irish Republican Army in the U.K., far-left extremist groups in Italy and Germany, Palestinian groups that launched hijack attacks, and more recently, Islamic extremist groups. Europe has not had events as big as the September 11, 2001 terrorist attacks in the U.S., but it has had some big events like the suicide bombings in London in 2005, he added. “What we have had in Europe is a longer stream of occurrences of attacks of a terrorist nature.”

Meyer noted other differences, comparing the bombings that took place at the Boston Marathon in April 2013 with the Paris attacks. “Boston shut down, but Paris did not,” he said, remarking that the only parallel was that two brothers were involved in both attacks. On Friday, however, schools were locked down and businesses were ordered to close as police sought the suspects in the Charlie Hebdo attack and attempted to end the hostage situation at the grocery store. “In the U.S., mentally, people detach from these types of incidents quite a bit,” Meyer said. “In Boston, it was a random attack against people such that it was more fearful, whereas here [in Paris], it was seen as a targeted assassination.”

The Paris shootings have certainly drawn “a very profound outrage” over an attack on a fundamental value — freedom of expression, Meyer added. “But it is not a fear that drives people to suddenly stop shopping or going to work.” As it happens, when the attacks occurred, his wife and daughter were in an upscale shopping center in Paris. “People had a general awareness of what was happening, but no one was leaving and [people] were focused on getting their shopping done,” he said, relating what they observed.

Meanwhile, support is pouring in for Charlie Hebdo from other cartoonists from all over the world who are sending in contributions. Many French media organizations have also rallied around with promises to help out with backroom support, printing facilities and so on, “to make sure Charlie Hebdo is not kept off the streets by this attack,” said Carnegy. The surviving members of the magazine’s team have said they will publish next Wednesday as usual. 

The atmosphere in France now is “extremely emotional,” said Carnegy. “The French have a long tradition of liberty, equality, fraternity, and they are very sensitive about their democracy,” he added. “This is an event that has really touched a nerve in France. People have been determined to come out and say, ‘Look, we are not going to bow the knee to this stuff.’”

Image credit: “Brisbane Charlie Hebdo Gathering, ‘Je suis Charlie,’ 2015-01-08” by Chtfn. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

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