Terror risk shifts to private sector.

The latest view of the evolving terrorism risk facing the United States shows a pressured, but still lethal al Qaeda and the likelihood of smaller scale attacks against "soft" targets insured by commercial policies, ranging from the Sears Tower to gas stations.

Al Qaeda remains the primary threat, but the group is undergoing a rapid evolution in response to the U.S.-led global hunt, according to risk estimates in the updated Risk Management Solutions U.S. Terrorism Risk Model. The model reflects the latest analysis of terrorist group capabilities, targeting strategies, counterterrorism measures, and physical modeling of attack mechanisms, RMS said in a statement.

The concern to insurers is the phenomenon of target substitution, said Peter Ulrich, managing director of enterprise risk for RMS--a provider of products and services for catastrophe risk management. Terrorists might prefer a target like the White House or the Capitol Building, tie said. But those are well defended, whereas something like the Sears Tower is just another building on the street unless you're going to shut down Chicago, he said. Significantly less can be done to defend that tower than other targets, and it's much easier to attack, he said.

Al Qaeda's adaptive measures, along with stronger U.S. and global counterterrorism efforts, are creating a "transitional state" for terrorism risk, said Dr. Bruce Hoffman, vice president for external affairs and director of RAND in Washington, D.C. This period likely will be marked by smaller scale attacks against more accessible economic and commercial targets, Hoffman said.

"From an insurance standpoint, you're shifting some of the risk from government to commercial buildings, which is shifting from uninsured to insured for the private sector," Ulrich said. "That's a big issue for insurers."