A case study on the Impact of the Manchester Arena attack on Local Businesses

A case study on the

Impact of the Manchester Arena attack on Local Businesses

Report from The Campaign Company (TCC) November 2018

A case study on the Impact of the Manchester Arena attack on Local Businesses

Contents 1

4

Executive summary

2 Introduction

9

3

Secondary research

10

4

Primary research findings

24

5

Conclusions & next steps

33

6 Recommendations

35

Appendix 1: Sources consulted for secondary research

39

Appendix 2: Template depth interview script

40

Appendix 3: Online survey

42

Appendix 4: Survey results

45

Appendix 5: Terrorism Awareness training

54

Appendix 6: Dave Scally evidence to Kerslake Enquiry

57

A case study on the Impact of the Manchester Arena attack on Local Businesses

1

Executive summary

1 Introduction

This report is a case study of the impact that the Manchester Arena bombing had on businesses in the area. In addition to the impacts on businesses in Manchester, the report also explores business attitudes to insurance generally and terrorism insurance more specifically. A number of recommendations are made as a result of the insight gathered.

There were three main challenges in conducting the research. Firstly, small and medium sized businesses are inevitably and necessarily focused on their business – they have little additional capacity to engage more widely in activities that are not directly related to immediate business priorities.

Secondly, the highly emotive nature of the attack renders it a subject that some do not wish to reference or recall.2 And thirdly, some confided in us that they were sensitive to the inference that they suffered from the attack commercially and it adversely affected their desire to project themselves as successful and aspirational. Notwithstanding these issues we believe we have a robust and insightful set of findings here.

2

Impact of the attack

4

On 22 May 2017, a bomb was detonated at the Manchester Arena, after the concert of Arianna Grande. Approximately 14,000 people were in the Arena. The blast killed 22 people, 19 at the scene and 3 in hospital and at least 245 people were known to be physically injured. Due to the nature of the targeted event and the large-scale loss of life, the incident was particularly high profile.1

Our research revealed that whilst the Manchester Arena attack had a major impact in terms of loss of life and had received significant public attention due to the nature of the event that had been targeted, the impact of the bombing on local businesses and the economy was limited, certainly more limited than the 1996 bombing of the Arndale Centre.

Despite this, some businesses were significantly impacted.

This business

interruption had an impact not just on the businesses themselves, but also on

subcontractors and partners

Some reported that they had to close for a period of time following the attack. This business interruption had an impact not just on the businesses themselves, but also on subcontractors and partners. Others that are heavily reliant on the Arena also saw footfall and trade decrease in the wake of the attack. Businesses that were more exposed to the Arena, saw a reduction in trade as a result of the Arena closing for several months.

1 https://www.local.gov.uk/sites/default/files/documents/4.%20Responding%20to%20events%20-%20 Fiona%20Worrall.pdf 2 The most acute example of this was that the Arena itself reluctantly declined to participate as they had made a policy decision to only contribute to the Kerslake Report and refuse any further interviews.

A case study on the Impact of the Manchester Arena attack on Local Businesses

Some report that the level of business that they would expect, is still not back to where it was pre-attack due to loss of attraction.

Other impacts on businesses included the altruistic response, where they acted emotionally and instinctively without thought for their bottom line.

Some businesses reported that they incurred cost / disruption due to having to support staff both emotionally and practically following the attack, with issues in some cases only becoming apparent weeks afterwards.

Whilst these impacts are real and difficult to absorb for businesses the overarching Manchester story, is that of a city that has been targeted by a number of terrorist attacks and has suffered civil disorder events. Yet Manchester has learned from them and has developed resilience to deal with the adversity with which it is confronted.

CityCo also mention the riots of 2011 and how learning from that event informed their key role in terms of the communications response to the Manchester Arena attack.

The previous terrorist attacks and the civil disorder of the 2011 riots have led to a city that is capable of responding to these incidents in a unified and resilient way. The Kerslake Report3 praised the civic response to the Manchester Arena bombing from Manchester City Council and its partners.

3

Insurance and terrorism insurance

In the wake of a terrorist attack, our research suggested that there is a gap between what is expected by business and what can be provided. Some businesses reported that they thought they would be covered by their current insurance for example, but this was not the case.

Research has shown that 66% of small businesses are not even covered for bad weather, so it is perhaps not surprising that they are also not covered for terrorism.

5 3 Former senior civil servant, The Rt Hon The Lord Kerslake, conducted an independent review into the state of preparedness and emergency response to the attack.

A case study on the Impact of the Manchester Arena attack on Local Businesses

There is generally mixed awareness of terrorism insurance, but once awareness is raised, almost universal feeling that cover of this sort is important. Key issues for businesses around terrorism insurance cover included: • Concern about the additional cost of coverage for something that would be destructive if it impacted the business but is ultimately unlikely to happen.

• The ease and speed of making a claim and support during this process.

Businesses want to return to business as usual as soon as possible following a terrorist attack, and do not want to deal with the bureaucracy of claiming.

• The level of cover provided by a policy and the guarantee of payment in the event of an attack were also seen as key concerns for business.

• Whilst businesses generally viewed insurance as important, there was scepticism around the insurance industry and the reluctance of insurers to pay out in the event that a claim is made

A key point raised was that companies want to return to business as usual as soon as possible following an attack. This trumps almost every other factor.

4

Barriers to cover

Making the case for broader cover (possibly through partnership and cross promotion) to include issues that are not currently defined as terrorism (such as cyber-attacks and major civil unrest) and which are a key concern to businesses would help to satisfy the desire for comprehensive cover. This may enhance the offer of terrorism insurance as an integral part of this offer.

5

Conclusions

The 1996 IRA bombing of the Arndale Centre was still present in the collective memory and had resulted in massive economic impact with 40% of the small businesses affected not surviving.

The response by the authorities was widely praised but they felt they could have done more. This should act as a warning to other towns and cities as they prepare against terrorist threats and which are unlikely to have the assets that Greater Manchester has.

6

Those close to the attack suffered greatly. The small businesses we researched operate in highly competitive environments. Some were prepared, others were resilient, but most were at best distracted from the focus needed to run and drive their businesses forward. Significant impacts were in terms of closure of businesses, reduction in footfall / trade following the attack, impacts in terms of staffing and acts of generosity / altruism in the wake of the attack.

Many were sceptical about the insurance industry. Awareness of terrorism insurance specifically was low amongst businesses, but most thought that terrorism insurance was necessary and important. We believe this strongly positive reaction is in part due to the history of attacks in Manchester and presents a promotional opportunity.

Some were prepared, others were resilient, but most were at best distracted from the focus needed to run and drive their businesses forward

A case study on the Impact of the Manchester Arena attack on Local Businesses

In terms of next steps, more research should be undertaken. A further case study of a different terrorist or civil emergency incident could shed further light on the issues around business impact, and attitudes to insurance generally and terrorism insurance specifically. Indeed, the example of Salisbury could be an interesting case study, as this is currently not covered under terrorism insurance as it involves state on state actions.

6

Recommendations

6.1

Awareness raising Our research suggests that when businesses are aware of the product they are likely to consider cover, so long as they consider the premium to be reasonable. Consequently the greatest focus should be given to raising awareness amongst businesses of the existence of terrorism insurance.

6.2

Partnership and promotion Finding trusted partners to both advocate the need for terrorism insurance to businesses as well as potentially offering access to terrorism insurance is worthy of consideration. Local business organisations sometimes already offer insurance deals and terrorism insurance could be offered through them as something to opt-in or opt-out of.

6.3

Bridging the gap The planned expansion in scope of terrorist cover is an opportunity for Pool Re and its members to communicate to potential clients that it will now better meet their needs. Insuring not just assets but also business continuity is a powerful selling point, if this can be articulated to them clearly and concisely.

6.4

Terrorism training Pool Re could position terrorism insurance as integral to any co-ordinated and coherent response to an attack through sponsorship or some other high profile contribution to ACT Awareness terrorism training to businesses and use this as a platform to promote the concept of terrorism insurance.

6.4.1 Give a Grab Bag Part of the ACT Awareness terrorism training advises that each business should have a “grab bag� close at hand at work with vital items (such as keys and passes) to facilitate a quick evacuation in the event of a terrorist attack. It would be relatively easy and inexpensive for Pool Re to provide these bags for its members to give away to potential terrorism insurance clients.

6.5

Manchester used as an example While Manchester has many assets that aid resilience business leaders and senior politicians like the Mayor of Greater Manchester, recognise that increasing the level of terrorism insurance is important for local businesses.

Manchester could be a productive place to pilot the role that terrorism insurance can play as part of resilience measures in the event of any future attacks.

6.6

Public sector procurement and best practice schemes It would be worth exploring the potential of including terrorism insurance cover in public sector commissioning frameworks. The robustness of business continuity plans is already a measure which suppliers have to demonstrate to local authorities and cover against terrorism could be an additional element that is included in this. Engagement with local authorities is further important as there is evidence that some local authorities have actually reduced the requirement for terrorism insurance for some of their community facilities as part of budget reductions.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

6.7

6.8

6.9

More flexible models of cover Providing a one-size-fits all insurance plan limits the ability of businesses to choose a plan that best caters to their business needs and assumes that all businesses require the same level of cover. To address concerns of flexibility and insurance cover relevance, a three - tiered insurance product could be considered.

To address concerns of flexibility and insurance cover relevance, a three -

tiered insurance product could be

Streamlining processes considered In the event of an attack, the top priority is for speed and simplicity. Businesses were totally absorbed in reacting to the immediate impact on their business.

Anything that detracts from that (even if it will be financially beneficial) will get scant attention. Anything that can help with that task will be embraced.

We believe that there is merit in exploring the feasibility of an industry-wide advice and support line that would be available in the immediate aftermath of any attack and be operational for a period afterwards.

Broadening insurance cover Increased awareness and extension of take up of a range of cover that small businesses currently do not have in the area of emergency response and resilience will enhance the appeal of non-damage-related business insurance.

On its own, a terrorist attack may seem unlikely and remote, but seen in the context of events such as cyber threats/attacks and or civil disorder it could provide a more relatable, relevant and attractive product for businesses of all sizes to consider.

6.10 Follow up on this report

There would be significant merit in Pool Re following up this report by meeting with some of the key stakeholders who have either participated in it or whose work is cited.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Brian Hood - stallholder, Victoria Station

2 Introduction

The Campaign Company (TCC), a specialist engagement and insight company, was commissioned by Pool Re to produce a case study on the impact of the Manchester Arena attack on the small and medium sized business community in Manchester.

Following the concert of Arianna Grande at Manchester Arena on 22 May 2017 an improvised device was detonated by a suicide bomber. This was the deadliest attack in the UK since the bombings in London on 7 July 2005.

Twenty-two people lost their lives.

The scale of loss of life and the nature of the event that was targeted, meant that the response to the atrocity was profound. There are many examples of bravery and selflessness and much money has been raised for victims and survivors.

However, there has also been an impact on city centre businesses. There will have been property damage within Manchester Arena as well as significant disruption to businesses within the police cordon, including Manchester Victoria station and the Arndale shopping centre. What is unknown is how businesses feel that the event impacted them in terms of ongoing trade, footfall and consumer confidence.

Pool Re want to understand the real-life impact of the Manchester Arena bombing attack on the small and medium sized business community in Manchester, through understanding their experiences of the event and how it has impacted their business.

A core driver for this work is a recent change to the law, which now allows terrorism insurance to cover a wider range of impacts, beyond just physical damage.

As such, this work will seek to establish how small and medium sized businesses perceive insurance generally and terrorism insurance specifically.

This report includes both quantitative and qualitative insight. This has been captured through desk-based research, a survey, depth interviews and vox pops which can be shared through a range of digital channels. It tells the story of how the Manchester Arena attack impacted small and medium sized businesses both directly and indirectly.

It tells the story of how the Manchester Arena attack

impacted small and medium sized businesses both directly and indirectly

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A case study on the Impact of the Manchester Arena attack on Local Businesses

3

Secondary research

3.1 Context Desk-based research was undertaken to look at how terrorist events have impacted businesses.

We have examined events across Western Europe and the United States back to 2001, when the current level of threat increased.

The aim is to show the level of impact of these events as a background to Manchester.

3.2

Shahzad Qumar - taxi driver, Victoria Station rank

Major incidents and public and business reaction Major incidents we examined included: • Salisbury, 2018 - cost still being assessed. Trade down by 20%. Government has launched a £2.5 million recovery plan.

• London Bridge, 2017 - £1.4 million of costs - mainly borne by smaller and medium sized businesses.

• Brussels, March 2016 - €1 billion of lost GDP. The Belgian capital recorded a €122.5 million drop in sales in the second quarter of this year, compared to the first months of 2016. Government estimated a decrease in federal tax revenues of €760 million, which represents about 0.1% of GDP. • Paris, December 2015 and June 2016 - A reduction of €750 million in tourism revenue.

• London bombings, July 2005 - Reduction in footfall in the West End of between 20 and 30%. 9 months for the demand for hotels in London to recover after the attacks. A reduction in annual tourism revenues of around £750 million.

• New York, September 2001 - 145,000 jobs lost. Between USD $80 and $90 billion of lost growth. New York City lost between $2.5-$2.9 billion in foregone tax revenues as a result of the attacks while New York State lost $2.9 billion. Some 17,000 jobs in the financial services sector are reckoned to have been lost in the aftermath of 9/11. Insurers are reckoned to have paid out $39.5 billion during the 7 years immediately after 2001.

A surprisingly little proportion of the losses incurred by insurers, $1.2 billion, were in the form of pay-outs on life insurance policies.

10

Research reveals that these incidents, in addition to the direct human and economic costs, have an impact on consumer and investor behaviour through the perception of a changed climate. This knock-on effect to business is harder to mitigate for investors, for example, who have moved out of riskier assets (such as stocks and speculative grade bonds) into safer, more liquid, and shorterterm assets (such as short-term U.S. Treasury securities, gold, or cash).

Terrorism incidents have tended to adversely impact the stock market as well as commitments for long-term investments and purchases and to boost demand for short-term liquidity, which works to lower spending. Discretionary consumer purchases, such as long-lived consumer durables (e.g. cars, major appliances, etc.) or vacations and travel as well as long-term business commitments are often postponed or cancelled.

A case study on the Impact of the Manchester Arena attack on Local Businesses

There were also increased costs of security analogous to a “security” or “terrorist tax”: part of these additional long-term security costs entail added delays, inefficiencies, and frictions and have effects similar to an added transaction tax on the economy thus imposing an adverse supply-side impact on the economy. Economic resources will be directed to shoring up security and diverted away from more productive private sector activity.

In terms of learning lessons and protecting businesses in future, the recommendations that came out of some of the reports on those attacks included:

Research reveals that these incidents, in addition to the direct human and economic costs, have an impact on

consumer and investor behaviour

• Targeted VAT cuts and other tax breaks; • Relief plans rather than communications strategies; • Regular business surveys to measure impact which might lead to a suggestion of a standard methodology so various incidents can be more readily compared; • The provision of new solutions, that respond to a wide-range of security threats but at a cost-effective price point, will also help to ensure smaller businesses, in particular, are in a better position to anticipate, prevent, respond, and recover; • Continuous reassessment of risks should be done in a transparent way so businesses see thinking evolve and can contribute to it. Terrorism itself evolves in response to target hardening and some recent attacks have been more targeted at ordinary citizens to generate terror rather than government, economic or military targets; • Some businesses such as hotels are particularly impacted due to loss of external public confidence compared to other business which might have a more resilient local clientele. However, speed of return to normal may be improving as wider public resilience increases.

When it came to small business: • Smaller firms are strongly represented in the kinds of sectors that are often the most significantly impacted by acts of terrorism such as retail, entertainment, transport and tourism. In these sectors, a reduction in footfall and the inability for staff to get to work or to sell and replenish perishable stock can cause a significant financial loss and even prevent a business from being able to operate at all.

• Small businesses’ lack of resources makes them vulnerable to unexpected ‘shocks’ to economic activity like terrorist attacks. Therefore, it frequently takes a small business more time to recover from such ‘shocks’ compared to a larger business.

3.3

Insurance and terrorism Despite the high number of terrorist incidents across Europe over the last few years and more recently in the UK, there is still very little take-up of terrorism cover outside the major cities, especially among the small and medium sized enterprise (SME) community.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Pool Re’s own research suggests that take up of cover amongst the SME community is less than 10%. Their own research shows there are various factors for this including: • A lack of understanding of the threat, by both the business community and regional brokers (the buyer and seller); • The (incorrect) belief that terrorism cover is included in standard property cover; • The affordability of buying additional insurance on top of current cover; • The perception that the government will simply ‘pick up the bill’ for any loss.

The fact governments intervene after an attack and businesses have an assumption that will happen, disincentivises the purchase of insurance. This can be avoided by ensuring the wide availability of appropriate products, at a fair price, that are perceived as adding value – so making them accessible.

Pool Re in talking to its stakeholders in recent times is considering whether terrorism insurance could be a mandatory offer to customers since they perceive this is the only way to be sure that the issue can be fully resolved.

Small business research in 2017 showed: • Fewer than one in five (17%) SMEs surveyed has assessed their exposure to rising UK security threats, despite 44% expecting to face some kind of threat in next 12 to 18 months. Many SMEs feel they are too small to be targeted; • 68% of SME respondents claim to be resilient to security crises yet nearly half (43%) admit to having no business continuity, disaster recovery or crisis management plans in place; • SMEs warned about misconception that businesses need to be the target of an attack to be significantly and negatively affected by one; • The research also highlighted a very clear gap in perception between the threats SMEs face and their level of preparedness. More than two thirds (68%) of SMEs questioned believe they are resilient and well-equipped to deal with a security crisis despite their planning and insurance protection levels showing otherwise.

There is, however, a widespread understanding that threat levels are growing, with one in five (19%) UK SMEs having faced an external security threat in the past two years while more than double that number (44%) believes they could face a threat in the coming 12 to 18 months. More than a quarter (27%) of those asked say they specifically expect to suffer cyber extortion in the near future.

The small business community nevertheless underestimates the threat.

Research shows there are at least three reasons for this: • The threat is growing and it changes e.g. switches methods and targets, quickly. The perceptions of business owners of what the threat is, its scale and likelihood may be outdated.

• The success of the police and security services may provide a false picture of the scale of the risk, suggesting it’s lower than it is.

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• The nature of the attacks is changing. Businesses are not just affected through direct damage to people, property and stock, but a larger number of businesses over a wider area can suffer detriment as a result of the consequent ‘business interruption’.

A case study on the Impact of the Manchester Arena attack on Local Businesses

Research shows smaller firms caught up in the aftershock of a terrorist incident will face financial pressures. These emerge from several sources: • Death and/or injuries (physical and mental) to employees; • The costs resulting from the damage to business property (e.g. buildings, capital stock, fixtures and fittings) which will need to be repaired/replaced;

Research shows

smaller firms caught up in the aftershock of a terrorist incident will

face financial pressures

• Stock irreparably damaged (including foodstuffs which might perish); • Inability of employees and clients/customers to get to a business’s premises, perhaps due to associated transport disruption or the post-attack security cordon and wider harm to the confidence of customers. Businesses in the retail and leisure trades (entertainment venues, restaurants, cafes, bars and pubs) are particularly likely to be badly impacted in such circumstances; • On-going financial obligations e.g. taxes, such as Business Rates, still have to be paid. So too do creditors, such as banks, who may have provided a loan as well as suppliers who have provided services already consumed.

In order to address this, the research shows small business resilience has two main elements: preparation and recovery. Helping small business with these will ensure: • Smaller firms have a good chance of continuing to operate as successfully as possible through the aftermath of an attack and beyond.

• Local economies are more resilient in the face of individual terrorist incidents and ongoing threat of future attacks.

In addition to previous attacks, both MI5 and the Metropolitan Police say the current terrorism threat is “Severe” which in definitional terms means a terrorist incident in a UK urban area is “highly likely”. In February 2018, the retiring head of counter-terrorism policing in the UK warned of the growing threat of far-right terrorism. Assistant Commissioner Mark Rowley said ten Islamist-inspired plots had been foiled since March last year. He warned that far-right extremists are working in similar ways to Islamist extremists and four far-right plots that could have led to violence were also disrupted. In June 2018 the Home Office said Britain faced a severe threat from Islamist terrorism for at least another two years – and the danger could increase further still. They further confirmed that security agencies are also confronting a rising risk from extreme right-wing violence as the potential sources of attacks become more diverse. The assessments emerged as the government unveiled a strengthened counter-terrorism strategy. Existing powers were reviewed after five attacks last year and the strategy included plans to share information held by MI5 more widely across government and local agencies. The Home Office said:

“In summary, we expect the threat from Islamist terrorism to remain at its current, heightened level for at least the next two years, and that it may increase further. We assess the threat from extreme right-wing terrorism is growing. Globally, terrorist groups and networks of all ideologies continue to develop organically, exploiting social media, technology and science to further their aims and ambitions.”

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A case study on the Impact of the Manchester Arena attack on Local Businesses

As recently as late October 2018, the threat from far-right terrorism was perceived to be increasing.

As such, responsibility for this area transferred across from the police to MI5 for the first time. It will now be tackled by the same agency that has responsibility for terrorist threats from Northern Ireland and Islamic terrorism.

The sources consulted to compile this research briefing can be found in Appendix 1.

3.4 Manchester 3.4.1 Local Business Immediate response to the attack

Whilst this report covers the impact on businesses themselves in the shortterm, many local businesses immediately acted to support local people without thought to their bottom line and this is important to note. As one article reported:

Many businesses were either closed on Tuesday or shuttered early to join thousands in attending a vigil at the city centre. Boohoo, a multi-national retailer based in Manchester, has formally committed to donating £100,000 to the victims and their families. Many local shops have taken to social media to express their support. “Our thoughts and prayers to our friends the cafes and their customers and everyone affected,” writes North Tea Power, a local coffee shop. “All of us here send our love to anyone and everyone affected by the harrowing attack last night,” tweeted Takk, an Icelandic-style café.4

As well as the general public businesses also showed concerned for the welfare of their local staff:

“…entrepreneurs are focused on the safety and security of their staff. Shazda Ahmed, the founder and director of Monarch Solicitors, a Manchester legal services provider located 10 minutes away from the concert hall, had each of her five employees walk to the train in groups. “I’ve made sure they get back safely by arranging for them to leave together and get on the right trains,” Ahmed says. Luckily, she says, no one on her team has been directly affected by the attack.”5

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“Manchester, known largely for its eponymous soccer teams, its 1980s music scene, and as the birthplace of the industrial revolution, is in a state of shock.

Nevertheless, local businesses are stepping up by diverting funds to the victims and their families, offering free or discounted products, and some halting operations altogether. The Blue Pig, for instance, is giving away coffee, tea, and cookies on its front porch, and offering 20 percent off meals throughout the day. “It’s surreal,” Rose says. “We’ve all been very quiet. You can see that people are carrying this with them.”

Businesses also wanted to join the public to show it really was “Business as usual”.

“Delamere and his co-founders wanted to make sure the brewery operated on Tuesday just like any other day. “We definitely made a point of going about the day as usual,” Delamere says. “You can’t let the fear mongering stop you. If you close down, it causes more disruption, and that’s what [terrorists] want.”6

4 https://www.inc.com/zoe-henry/manchester-businesses-extend-support-to-victims-ariana-grande-attack.html 5 Ibid 6 Ibid

A case study on the Impact of the Manchester Arena attack on Local Businesses

3.4.2 Immediate impact on events in Manchester, the North West and the UK

Within hours of the attack on an entertainment event many other planned events were cancelled, rescheduled or had to change their security arrangements. This included events such as Ariana Grande’s UK tour, Live Nation (the Arena event promoter) promoted gigs, the Wonder Woman Film Premiere, the Mummy film premiere, two Netflix premieres, the Take That tour, the Blondie tour, the Liam Gallagher tour, BBC1 Big Weekend Festival, Slam Dunk Music Festival, We are FSTVL, Dot to Dot Festival along with major UK Arenas in London, Belfast, Glasgow and Leeds.

The Manchester Arena was of course impacted the most:

The venue at the centre of the bombing has cancelled all its events this week, which includes three Take That concerts, due to the police investigation. It is unclear when the Arena will reopen; KISS are still set to perform there on May 30. “There are no further cancellations at this point. We are working with the police and promoters about other upcoming concerts, in particular Kiss on 30th May,” the venue’s website says. Future cancellations could have a big impact: the venue is the largest indoor Arena in the U.K. with a capacity of 21,000, one of the busiest Arenas in the world, and is the second-highestgrossing venue in the U.K. (fourth in the world).7

3.4.3 News coverage of the immediate local impact to the economy

The BBC did an in-depth report in August which is worth quoting in detail.

The theme of the report was that in the immediate aftermath, Manchester was resolute that it would carry on and it was “business as usual”. However, businesses in the area near to the Manchester Arena said they experienced a noticeable drop in trade following the attack where 22 people were killed.

The BBC reported on the impact on a number of businesses:

Howard Burns, who runs a jewellery business that has been in the city since the late 1800s, says that in the days immediately following the attack “there was no one shopping here”. “I think that the retail business in Manchester dropped off an awful lot just after the bomb because people were worried to come into Manchester. Some people were frightened of being in a crowded area, some people were just scared of anyone with a rucksack on their back, and anyone who acted suspiciously.” He said it took two weeks for normal trade to resume. He added that the council and tourism groups would “continue promoting the city as a key UK destination, and to make sure visitor perceptions are not affected in the long-term”.

Katie Gallacher, head of Manchester Digital, says the attack has not put people off relocating to the city for work. The mood in the city is optimistic, particularly among those in the tech sector. It is Manchester’s fastest growing industry. The industry had been relatively immune to events. She and many others in her sector are trying to encourage digital and tech professionals to relocate to Manchester. “We’re still seeing companies relocating here. It’s a really great place to be, and the community’s stronger than ever.”8

I think that the

retail business in Manchester dropped off an awful lot just after the bomb because

people were worried to come into Manchester

15 7 http://www.vulture.com/2017/05/uk-events-canceled-after-manchester-bombing.html 8 https://www.bbc.co.uk/news/business-40710154

A case study on the Impact of the Manchester Arena attack on Local Businesses

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The BBC reported on the impact of the which is very sensitive to a loss of confidence.

Adrian Ellis, the general manager of the Lowry Hotel and, chair of Manchester Hoteliers’ Association (MHA), says many hotels in the city had lost a lot of business, but that the industry is recovering: “Our hotel, and along with the other hotels in the city, lost considerable amount of business, mostly with concerts cancelling because the Arena was closed and still is closed.”

The Manchester Arena is due to reopen in September 2017. Concerts by acts including Celine Dion, Radiohead, Bros and Blink-182 have been cancelled or rearranged.

Gavin Sharp, owner of the Band on the Wall, venue says visitor numbers dropped noticeably. He says: “Probably the best example is Craig Charles, who plays with us the last Saturday every month... it always sells out, it’s quite a mainstream, broad audience. The Saturday after the bomb was Craig’s show and it didn’t get to sell out that time, and in fact 60 people who had bought tickets didn’t turn up for the show, so even though they’d spent the money they decided they weren’t going to come into the city centre.”9

Local business groups were optimistic and thought the impact would be short term.

Christian Spence, ‎head of research and policy at Greater Manchester Chamber of Commerce, says: “Broadly... we don’t expect anything in the long term; certainly not beyond some of the comparables we’ve seen in other cities who’ve faced similar incidents.” Manchester’s economic data for the summer months will not be available “for a long time”, but chamber members expected the impact on businesses in the city to be short-lived, Mr Spence adds.

According to its latest Quarterly Economic Survey, the city’s Chamber of Commerce is predicting that UK growth will be 1.6% this year and 1.5% in 2018, while growth in Greater Manchester will be 3.25%. Mr Spence says: “For those businesses that were closest to the terror site itself, of course there was a colossal impact in the immediate aftermath, which lasted for around a week as the cordon stayed in place. Otherwise more widely the major impact will have been around our conference and hotel facilities. That’s a relatively short-term impact... but it will have hit some of those businesses.”10

The BBC reported on the Councils response to support the economy and its offer of rate relief:

Cllr John Flanagan, Manchester City Council’s executive member for finance, says: “Businesses within the inner cordon were impacted most acutely, and we have been in conversation since the attack to support them, including business rate relief, and the Manchester Business Continuity Forum has been updating and reviewing their continuity plans.”11

9 Ibid 10 Ibid 11 Ibid

For those businesses that were closest to the terror site itself, of course there was a

colossal impact in the immediate aftermath

A case study on the Impact of the Manchester Arena attack on Local Businesses

3.4.4 Recovery Planning and Governance

Manchester City Council in discussion with government departments (DCLG) began to implement the recovery arrangements set out within the Greater Manchester Strategic Recovery Guidance. On the 31st May, Greater Manchester Police formally handed over the response phase to the local authority led recovery phase. Manchester City Council then led a multi-agency Recovery Co-ordination Group to deliver a Recovery Strategy.

A political reference group was established, chaired by the Leader of the Council and including the Deputy Leader, the lead Executive Member for Neighbourhoods, and the postholder covering the crime and policing brief from the GM Mayors office.

The Recovery Action Plan had 6 work streams: Welfare and Health, Community Recovery, Business and Economic Recovery, Communications, Finance, Debrief and Learning.

The Recovery Co-ordination Group commissioned an Impact Assessment to provide the evidence base for the Recovery Strategy and Recovery Action plan, including any potential asks of Central Government.12

3.4.5 Business and Economic Issues Growth in professional services, tourism and the burgeoning tech sector over recent years meant Manchester is now the UK’s second city in terms of economic activity, so the attack could have a serious impact on its growth.

Manchester is also the second most visited city in the UK and the tourist economy is worth around £7.5bn to the Greater Manchester region. In Paris, the tourism sector reported a sharp fall in the number of visitors to the city following the attacks in 2015. Fewer tourists meant loss of business for restaurants, shops, tourist attractions and transport.

Dialogue was established with the 19 businesses who were affected by the inner cordon that was put in place in and around the Manchester Arena.

Business continuity plans for businesses, such as SMG, the operator of the Manchester Arena and N Brown, who operate a call centre from within the Manchester Arena complex, were tackled immediately with no loss of service or employment. The Council engaged with organisations across the city to promote the idea to revisit business continuity plans. This was supported by the Manchester Business Continuity Forum.

Firms closest to the Arena, which had to be closed for several days in the immediate aftermath of the attack, were offered help by Manchester City Council. Depending on their trading status, businesses could be considered for either business rates relief or consideration for support under a hardship scheme. There were nine businesses that were identified for possible business rate relief. Of these three businesses applied for and received relief totalling £7,641.46. The businesses contacted in relation to the potential hardship scheme included: • 9 SMEs • 12 artists / sole traders sharing a studio building • 3 casual traders in Victoria (trading 1 or 2 days per week) • 2 charities

12 https://secure.manchester.gov.uk/download/meetings/id/23168/item_4_-_manchester_Arena_-_attack_ and_recovery

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Others businesses were contacted for potential support from a hardship scheme. Several businesses responded and identified potential losses totalling about ÂŁ50,000, a Council Economy Scrutiny Committee report found.13

Further work was conducted to determine the short-term and medium-term impacts on retail businesses, hotel operators, the music economy and the wider visitor economy within the city and city region. In doing so, Marketing Manchester are working very closely with Visit England to ensure that the wider perceptions of Manchester, London and England as a place to visit suffer no long-term impact.

The Manchester Arena was closed until September and the operator SMG sought to reschedule events which had to be cancelled at the Arena or, as a result of other touring commitments, to retain as many of the cancelled events within the Manchester area in order to minimise the economic impacts of losing those events.14

3.4.6 Long-Term strategic issues

The Council in its overall assessment of the long-term impact saw the Manchester Arena attack as having the potential to reduce economic confidence in the city; impact tourism; and have implications for the concert economy including the temporary closure of the Arena. Their recovery strategy explicitly recognised economic and business risks and put in place measures to mitigate these. This includes actively working with the businesses and sectors involved, monitoring future trends in the city’s economic performance, and recognising the contribution of the city to wider economies including that of the North West. Areas their long-term recovery strategy focused on were:15

18

City Skills base. The effects of the attack were reported as having been felt in schools across Greater Manchester and beyond. The recovery strategy recognises the potential impact of the attack on young people and sought to reassure them, re-establishing confidence in the city as a good place to study and develop skills. This included psychosocial support, offers to build resilience and reassurance, together with community cohesion work.

Cohesion. The attack was seen to have an impact on communities, reflected in part in heightened community tensions. The recovery strategy addressed the implications of the attack for different communities across the city, actively engaging the existing networks across Greater Manchester to ensure an informed and effective response. This also involved managing demonstrations by extreme political groups across Greater Manchester.

Economy and Tourism. There was a fear that the attack would have longer term impacts on retail businesses, hotel operators, the music economy and the wider visitor economy within the city and city region. The recovery strategy sought to ensure that the wider perceptions of Manchester as a place to visit suffered no long-term impact.

13 https://www.manchester.gov.uk/download/meetings/id/23651/8_city_recovery_plan_following_the_ Arena_attack 14 Ibid 15 Ibid

A case study on the Impact of the Manchester Arena attack on Local Businesses

External Response and Public Perceptions.

The attack attracted worldwide media coverage and was of global interest. Many international offers of support were also received. The recovery strategy aimed to demonstrate a world class response and also the synergies with the work of the 100 Resilient Cities programme, which the Council was part of. This included working with Westminster and Southwark Councils to help integrate and align responses to recent attacks in those areas of the UK.

It will be in the back

of your mind all the time and you are more aware of what is around you

3.4.7 Local public and business views six months after the attack

The BBC reported on the perceptions of the public six months after the attack.16

At the Christmas market in Manchester’s Albert Square, shopper Nicola Depetrillo said people were “defiant” in the wake of the terror attack on 22 May. “I think it’s the same for everybody now, life’s changed for us,” she said.

“It will be in the back of your mind all the time and you are more aware of what is around you. But you’ve got to go about your everyday life. You can’t stop going out. Why should we stay away? This is our city.”

Charlotte Powell said she recently took part in an event which involved chasing people in the city centre while collecting clues. She described how one man thought they were running out of fear and began sprinting with them. “His face was shocked and you could see the fear. He said ‘I thought it was another attack’ and all we were doing was running down the road, so people are a bit edgy.”

Tibyan Sanoh was on the tram when the attack happened and heard the bang as the bomb exploded in the Arena. She said: “For a couple of weeks it was really scary. But on the whole, I feel like everyone’s just got back to normal, which is strange. When something happens people automatically think it’s a terrorist attack. But aside from that I feel Manchester is a hardfaced city anyway, so you just crack on.”

Catherine Jones, from Cheadle Hulme, said on Remembrance Sunday a cannon fired to mark the beginning of the silence made her jump. “My immediate reaction was it was a bomb again. You think about it more in the city centre when you’re in enclosed shopping centres. I’d rather be out where you Robert Downs - FSB can run if it happens again.” She said people were more vigilant and the attack had increased awareness around reporting anything suspicious.

“We wouldn’t stop coming in to Manchester because of it [though]. Life has to go on.”

The BBC reported that both the attack and other attacks at Christmas markets in Europe had led to an increase in security:17

19 16 https://www.bbc.co.uk/news/uk-england-manchester-41914331 17 Ibid

A case study on the Impact of the Manchester Arena attack on Local Businesses

The additional security measures were not in response to any specific threat, Greater Manchester Police said. As visitors enjoy German sausages at the markets and sip mulled wine, they are being joined by armed police. Greater Manchester’s mayor Andy Burnham announced officers would for the first time patrol the market to provide the “reassurance people will want”. Armed officers have also been deployed to Manchester Airport and events such as the Great Manchester Run.

Hanouf Alosaimi, who was visiting the market, said: “If I see armed police, everything is safe and good. When I see police everywhere, everything is secure and I am very happy with it. [I think Manchester in general] is more secure. I feel very, very safe.”

“Security has been massively vamped up,” says David Adu-Dwumaa who works in the city centre but lives in Leigh. “Some people would see it and be paranoid about what could happen, but it can always happen, so I think it’s better for [reinforcements] to be there.”

Stephen Morrisroe and Caniko Behdjet said Manchester has a “you won’t knock us down” attitude, but Caniko Behdjet, from Whitefield, said she felt “concerned, rather than reassured and protected” when she saw police with guns. “As soon as I got off the tram there was something over the loud speaker about keeping your belongings with you or they will be destroyed. It makes you feel a bit uneasy.”

Councillor Pat Kearney said he had visited the market in Berlin where a lorry ploughed into shoppers and killed 12 people and had “learned lessons”.

He said: “A year or two ago we wouldn’t talk so openly about the security measures. But now I think the public actually want to be reassured that the council and police have thought through the security,” he added.

The BBC also reported on tourism and business confidence in the six months since the attack:18

20 18 Ibid

A case study on the Impact of the Manchester Arena attack on Local Businesses

Greater Manchester Chamber of Commerce (GMCC) reported an “immediate dip” in tourism and hotel bookings following the attack. But levels of tourism, visitors and conferences are now as “high as ever”, according to its head of research and policy, Christian Spence. “This year’s festivals and events in the city centre have all been huge successes and the Manchester ‘buzz’ is very much in evidence,” he said. Hotel occupancy rates initially “struggled” after the attack but showed signs of recovery by August, a report to Manchester City Council’s Economy Scrutiny Committee said. But Mr Spence said that when compared to “the physical devastation” of the IRA bombing in 1996, the biggest impact of the recent bombing was “on those who lost loved ones... those injured... and the psychological impact on people who live and work in the city centre.”

Marketing Manchester said hotel occupancy up to the end of September was nudging ahead of the 2016 figures. “We are confident we will end the year ahead of last year,” a spokesperson said. This contrasts with hotel performance data following the terror attack in Paris in November 2015 which left 130 people dead, when “mixed performance levels were still evident a year later”.

The BBC report also covered the challenges to community cohesion since the attack:19 Reports of Islamophobic hate crimes and incidents Reports of in Greater Manchester rose by 500% in the month following the attack, police figures showed. They Islamophobic hate included a bomb threat, racist taunts and graffiti. After crimes and incidents this initial spike, and a high of 1,061 reported incidents, in Greater Manchester the figures have since dropped but remain slightly above rose by 500% in the 2016 levels. In October there were 711 incidents of reported hate crime, compared to 564 the previous year. month following the Greater Manchester Police’s Assistant Chief Constable attack Rob Potts said events in Manchester and across the UK have had a “huge impact” on figures, but one month after the attack levels of hate crime “returned to similar levels” as before. He said hate crime was often under-reported and encouraged people to come forward.

3.4.8 1996 Manchester Bombing

The Bombing The Manchester Arena attack is not the only major terrorist incident to have occurred in central Manchester. The 1996 Manchester bombing was an attack carried out by the Provisional Irish Republican Army (IRA) on Saturday 15 June 1996. The IRA detonated a 1,500-kilogram (3,300 lb) Lorry bomb on Corporation Street in the centre of Manchester, England. It was the biggest bomb detonated in Great Britain since World War II.20 The perpetrators of the attack have not been caught, and Greater Manchester Police have conceded it is unlikely that anyone will be charged in connection with the bombing.

The bombing itself was also followed by a nearby bomb attack at Wilmslow railway station in Cheshire in 1997.

19 Ibid 20 https://www.manchestereveningnews.co.uk/news/greater-manchester-news/manchester-ira-bomb-20years-11425324

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Economic Impact At the time security sources warned that the IRA is switching its attention to economic targets. After the 1992 Baltic Exchange bombing in the City, several international finance companies threatened to move their operation to the continent, which led to a dramatic upgrading of security in that area.

The bomb targeted the city’s infrastructure and economy and caused devastating damage, estimated by insurers at £700 million (equivalent to £1.2 billion in 2016) – only surpassed by the 2001 September 11 attacks and the 1993 Bishopsgate bombing in terms of financial cost.

According to Home Office statistics, an estimated 400 businesses within half a mile (0.8 km) of the blast were affected, by the blast. 40% of which did not recover.21 Furthermore many more businesses outside this central area suffered smashed windows and damaged fittings.

The Manchester bombing highlighted the insurance problems faced by businesses. Up to one-third of the companies affected by the explosion are believed to have received limited compensation because they did not have the cover needed in the event of a terrorist attack.22 Manchester along with the 1992 Bishopsgate attack raised terrorism insurance up the agenda of both business and government.

The Structural Impact Several buildings near the explosion were damaged beyond repair and had to be demolished, while many more were closed for months for structural repairs. About twelve buildings in the immediate vicinity of the explosion were severely damaged. Overall, 530,000 square feet (49,000m2) of retail space and 610,000 square feet (57,000m2) of office space were put out of use.23 Insurers paid out £411 million (£700 million as of 2018) in damages for what was at the time one of the most expensive man-made disasters ever, and there was considerable under-insurance.24 Victims of the bombing received a total of £1,145,971 in compensation from the Criminal Injuries Compensation Authority; one individual received £146,524, the largest amount awarded as a result of this incident.

Jess McGwynn - Manager, Mowgli Restaurant

21 http://news.bbc.co.uk/1/hi/programmes/panorama/3704943.stm

22

22 https://www.independent.co.uk/news/pounds-411m-cost-after-manchester-bomb-sets-record-pounds411m-1275416.html 23 https://www.routledge.com/The-Enterprising-City-Centre-Manchesters-Development-Challenge/ Williams/p/book/9780415252621 24 Ibid

A case study on the Impact of the Manchester Arena attack on Local Businesses

Sue Murphy - Deputy Leader, Manchester City Council

The heaviest damage was sustained by the three buildings nearest the bomb: Michael House, comprising a Marks & Spencer store and a six-storey office block; Longridge House, offices for Royal and Sun Alliance, an insurance company; and the Arndale Centre, a shopping mall. Michael House was deemed beyond economic repair and demolished. Marks & Spencer took the opportunity to acquire and demolish the adjacent Longridge House, using the enlarged site for the world’s biggest branch of the store.25 The frontage of the Arndale was badly damaged and was removed in a remodelling of that part of the city centre. The glass domes of the Corn Exchange and the Royal Exchange were blown in.

Central government set aside £1million of European Union finance and set in place a master plan for the redevelopment of the City Centre. They also provided £150,000 to support an international urban design competition, which was launched just one month after the bombing, and which provided a cohesive plan for rebuilding.26

The reconstruction was overseen by the new City Centre Task Force, Millennium Manchester Organisation. The government allocated a further £20 million to Manchester from the European Union regional aid budget.

By 1999 the main area of the devastation zone was restored at a cost of £1.2 billion, although redevelopment continued until 2005. The Royal Exchange was renovated, the Corn Exchange was reborn as the Triangle, and the whole north side of the Arndale Centre had been rebuilt. The dome of the Royal Exchange shifted in the blast and its reconstruction took two and a half years and cost £32 million, paid for by the National Lottery. Shambles Square including the Old Wellington Inn and Sinclair’s Oyster Bar - the two oldest buildings in the city of Manchester - were physically moved some 100 yards to a new Shambles Square location off Exchange Square.

The long-term impact By the 20th anniversary in 2016, the bombing itself was remembered not only as a tragedy with many stories of bravery reported. It was also seen as a key point in starting the city’s mass regeneration which led to Manchester City having above national average economic growth in the 20 years following the bombing.27

The dome of the Royal Exchange shifted in the blast and its reconstruction took two and a half years and cost £32 million, paid for by the National Lottery

25 Ibid 26 https://www.abebooks.co.uk/9780955262104/Detonation-Rebirth-City-Ray-King-0955262100/plp 27 https://www.manchestereveningnews.co.uk/news/greater-manchester-news/manchester-ira-bomb-20years-11425324

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A case study on the Impact of the Manchester Arena attack on Local Businesses

24

4

Primary research findings

4.1

Research methods We conducted over twenty depth interviews with businesses and stakeholders in Manchester. These were conducted both face to face and by phone. Some of the interviews have been videoed so as to be used by Pool Re on social media or at conferences and events.

A standard conversation guide was used for these interviews and this can be found in Appendix 2. A mix of small and medium sized businesses were interviewed, including publicans, restaurants and museums as well as broader stakeholders with a more strategic view of events such as business representative organisations and local government. Insight from these interviews can be found in this section.

In addition to qualitative insight gathered, a quantitative survey was also conducted. This was designed to give us additional insight in to how businesses of all sizes in Manchester were impacted by the Arena attack and their attitudes towards insurance.

The survey contained 22 questions tailored to gain perspectives and insight from businesses that were both affected and unaffected by the Arena attacks.

A thematic structure was used to understand the degree of impact following the Arena attacks as well as general attitudes to business and terrorism insurance. The themes included in the survey are as follows: about the business; the impact of the Manchester Arena attack; experience of support after the Manchester Arena attack; awareness of terrorism insurance; and supporting businesses. The full survey can be found in Appendix 3.

To ensure a range of businesses were represented, we conducted desk-based research to locate and contact businesses placed within close proximity to the Manchester Arena. For businesses that were interested in our research, we provided opportunities for them participate by completing our online survey, which was sent by email and through telephone and face to face interviews.

Additionally, we partnered with Manchester City Council to circulate this to the Business Continuity Forum, and CityCo (the Business Improvement District) who sent the survey to a cross-section catchment of member businesses.

In total we received 25 survey responses, which comprised of 20 complete responses and 5 partial responses. The charts in the appendix outline the composition of businesses that participated in the survey.

4.2

Challenge of engagement It was challenging to achieve the required level of engagement for this work.

We therefore used a mix of methods – online, telephone and face to face.

We employed the technique of snowballing – asking those we succeeded in speaking with to recommend others. In this way we believe we have insight from a robust and representative sample of businesses and other stakeholders.

We were disappointed not to get participation from the Arena itself (although we did speak to suppliers). James Allen, General Manager of the Arena said, “…as you may be aware, the Inquests into the deaths of the victims of the attack have opened, and are mindful of not prejudicing that process in any way. We have not given interviews to any other interested party (despite numerous requests), with the exception of our participation in the Kerslake Review, which was established by the Manchester Mayor and with which we fully participated.”

A case study on the Impact of the Manchester Arena attack on Local Businesses

4.3

The barriers to securing time and access to these businesses is we believe reflective of some of those that are attendant on promoting and selling terrorism insurance. We make reference to this and recommendations about measures that can be taken to help in this regard.

Impact of the attack on businesses Businesses reported that they were impacted by the attack directly and indirectly in a variety of ways. In the immediate aftermath of the attack, there are examples of businesses acting spontaneously and without thought to the bottom line, to support victims and those caught up in events.

The barriers to

securing time and access to these businesses is we believe reflective of some of those that are attendant on promoting and

selling terrorism insurance

“I came back and opened up Pho, we were all closing down at this point, and made them get all the coke, pepsi, chairs, blankets as much as possible so we could get people in and some safety away from the Arena. I did the same with Banyan too.” – Jess, Mowgli Street Food

There were many of such spontaneous acts by business after the attack. They were done instinctively, without thought to their bottom line. However, it did effectively mean that the businesses were incurring additional costs. This sort of immediate humanitarian action does exacerbate the impact of an attack.

“Local businesses are stepping up by diverting funds to the victims and their families, offering free or discounted products, and some halting operations altogether. The Blue Pig, for instance, is giving away coffee, tea, and cookies on its front porch, and offering 20 percent off meals throughout the day. “It’s surreal,” Rose says. “We’ve all been very quiet. You can see that people are carrying this with them.”

Boohoo, a multi-national retailer based in Manchester, has formally committed to donating £100,000 to the victims and their families. Many local shops have taken to social media to express their support”.28

Those closest to the blast inside the secure cordon were obviously the most directly impacted, with some having to close for a full week. Indeed, a third of businesses that were surveyed for this work, reported that they were forced to close as a result of the attack.

“Impact included closure of business. The museum was behind where the police had cordoned off the area (area was cordoned off for 7 days).

Contractors had their equipment in the building, as they had an event on the day of the attack, and they were not able to access it following the attack.

Contractors suffered financial as they had their equipment in the building, it was festival season and they had no access to things like back drops and other equipment that is needed for festivals.” – Dave, National Football Museum

“Police cordoned off the main road, which meant a halt in business. Despite being closed for a week after the attacks we still had to pay for utilities and staff wages. As there was no incoming profits or money, the business was spending without making money” – Gareth, Waxy O’Connor’s

25 28 https://www.inc.com/zoe-henry/manchester-businesses-extend-support-to-victims-ariana-grande-attack.html

A case study on the Impact of the Manchester Arena attack on Local Businesses

Other businesses, whilst open, reported that footfall dropped off severely for a period of time following the attack. One respondent described it as a “Ghost town” and half of businesses surveyed reported a noticeable reduction in footfall. For small businesses this can have a huge impact on their business and its viability.

“There was no one shopping here. I think that the retail business in Manchester dropped off an awful lot just after the bomb because people were worried to come into Manchester. Some people were frightened of being in a crowded area, some people were just scared of anyone with a rucksack on their back, and anyone who acted suspiciously.” – Howard Burns, Jeweller

“Bookings were cancelled. It lasted around a week. Fortunately, staff were local and were all able to get in so we did not have staffing issues. We had never experienced something like it before. The whole place was like a ghost town for the first week.” – Antonia, Gusto Restaurant

Indeed, for some businesses they report that footfall still isn’t at the levels seen before the attack.

“Close to the incident, there is a marked difference in footfall. I think there is a residual of that, the footfall still isn’t anywhere near what it used to be. It has definitely impacted on footfall to some extent.” – Brian Hood, Signature Soaps

“I’d say we are down about 10 – 15% year on year, at least. Footfall on here is the same. It is beautiful, but empty. This Christmas will be the first proper one and you will still be able to tell. The Arena dates are not as busy, security is higher now too so people are constantly on edge. That has a massive effect.”

– Jess, Mowgli Street Food

This could be termed a “loss of attraction”, it has been seen in Manchester previously after the riots of 2011.

“We work in the City Centre and it is a second home to us. But we can tend to forget that we have people visiting who haven’t been here for many years.

I remember we had a lady visiting from Google, she searched for Manchester and the first thing that came up was the riots, and she phoned me wanting reassurance that she was going to be safe” – Alex King, CityCo

“The Arena dates are not as busy, security is higher now too so people are constantly on edge. That has a massive effect.” – Jess, Mowgli Street Food

“Concerned, rather than reassured and protected” when she saw police with guns. “As soon as I got off the tram there was something over the loud speaker about keeping your belongings with you or they will be destroyed. It makes you feel a bit uneasy.”29 – Caniko Behdjet, from Whitefield

The Arena dates are not as busy, security is higher now too so people are constantly on edge. That has a

massive effect 26

29 https://www.bbc.co.uk/news/uk-england-manchester-41914331

A case study on the Impact of the Manchester Arena attack on Local Businesses

Whilst the Manchester spirit meant that business as usual soon returned for many, there were some businesses who are heavily reliant on the Arena for their business.

This is understandable as it is the largest indoor Arena in the UK and one of the busiest Arenas in the world. As such, an almost four-month closure following the attack meant, for businesses like Emergency Training UK, who provide first aid services almost entirely to the Arena that there was a huge hole in their business that could not be easily filled. This would have knock on impacts that would continue to affect the business for months if not years.

“We provide the first aid and medical cover for the Arena, for all the shows.

All the first aid and all the medical equipment. It’s an all eggs in one basket situation and once they shut down for four months that income just went goodnight. That was it.” – Ian Parry, Emergency Training, UK

“Although we lost a lot of business through all the bookings that were being cancelled, because of all the gigs that were being cancelled at the Arena because it was closed for several months. We had a lot of cancelled bookings straight away – people were nervous and were like “I don’t want to go back”.

After that you started hearing about the cancellations of the events. So, then we got cancellations of our bookings too. Obviously, we weren’t ever going to charge them for it, we were just re - scheduling for when they rebooked.” – Helen Hipkiss, Lowry Hotel

There was also evidence from CityCo to suggest that although terrorism training is widely offered to business in Manchester, learning gained through this, did not always hold in the event of a terrorist incident. When an arrest for shoplifting caused a disturbance the week after the attack, rumours quickly spread that there was another bomb.

“What we always stress, is that this is a classroom situation. If you do not go back and give it the air time in your organisation it is virtually useless. You need to be able to give people time to practice and stress test plans and to empower them to take control in a situation if they need to take control. It might work well in a lot of cases, but in other instances you might be running a business of 40 – 50 employees and a very junior member of staff is the fire marshal, well actually they can’t manage a terrorist incident.” – Alex King, CityCo

“I was going out to get my lunch on the Tuesday of the Arndale evacuation.

There were major stores at a point where they were a quarter of a mile away from a known site of the supposed incident who were evacuating customers and then following them out and locking the doors behind them. We had the assumption that there was a plan to lock the doors and stay inside. So actually, seeing what happened and some of the panicked reactions threw up a number of issues.” – Vaughan Allan, CityCo

This led on to points about communication. This is another asset that Manchester had to lend to its response. Having a city centre management organisation like CityCo, meant that on a basic level they had all the contact details and social media connections for businesses in the affected area.

27

A case study on the Impact of the Manchester Arena attack on Local Businesses

Thomas Brown - Gallery owner, Corn Exchange

28

This meant that they could push out information, respond to questions and quash rumours quickly and effectively:

“We spent most of that first week though churning out social media and email statements going round hand by hand to various places, a lot of the time making sure businesses knew what was going on” – Vaughan Allen, CityCo

“We are lucky in Manchester because we have a very tight knit business community.

When I was talking to my colleagues in other BID’s they shared experiences of businesses who behaved terribly and did all sorts of things to get behind the cordon. I don’t know if that is because they are more accustomed to this in London or because of the horror of the Manchester attack makes it different.” – Alex King, CityCo

There was a sense that Manchester had learned from previous incidents and issues, and that these had informed its response in terms of communications.

“What hasn’t [dropped off] has been the desire to keep the communication going, that started in the 2011 riots and has continued since.” – Vaughan Allen, CityCo

“You can’t be complacent about engagement: Who is where, who you can trust and who has experience. I was around in 1996 and I know others who remember that bomb, I think it brings that community strength out.” – Alex King - CityCo

4.4

Gap between business expectation and reality A number of businesses said that they expected to be covered by insurance but were not. Indeed, we know from secondary research, that businesses also often believe that should a terrorist incident occur, the government will cover the costs. However, this is not often the case and terrorism insurance is currently limited in its scope.

“I spoke to my insurer but we weren’t covered for loss of earnings…We just basically lost loss of income for that four months – ninety-five per cent of our income.” – Ian Parry, Emergency Training, UK

Respondents to the survey also noted their business would have been “covered by insurance for damage to buildings and business continuity but not for loss of income during the closure periods and lower visitor footfall”. Thus, highlighting a clear gap in the depth of cover provided by some insurers and what businesses expect in the wake of a terrorist incident should one occur.

“It was our sense that what was able to be offered fell well short of the reality of the impact on businesses who were affected either directly or indirectly.” – Robert Hyde, Federation of Small Business

“Having something ready is really important – insurance would have provided this. There is a gap in terms of reaching staff in smaller businesses and knowing what to do in the immediate aftermath with businesses (which insurance would have covered). Insurance would also offer the speed and peace of mind”. – Sue Murphy, Manchester City Council

A case study on the Impact of the Manchester Arena attack on Local Businesses

4.5

Scale of impact There were suggestions from some that the impacts of the terrorist incident were not as bad as might have been expected, given the media coverage.

The profile of the incident was high, due to the nature of the event that was targeted, the fact that there were many young people in attendance and that there was a high number of casualties and fatalities.

“We had very little direct evidence from our members showing disruption following the attack. The biggest impact was from the security cordon around the Arena that was removed after a week, the subsequent disruption to travel and a dip in the short term to visitor numbers. Visitor numbers quickly recovered and disruption to trading was minimized.” – Chris Fletcher, Greater Manchester Chamber of Commerce “Because of where it was, there were not that many businesses involved, it was completely unlike our previous major experience of this sort of thing”.

– Sue Murphy, Deputy Leader Manchester City Council

However, the nature of the incident meant that some businesses perhaps were reluctant to approach authorities or to make a claim from the hardship fund. This could be a reaction similar to that of “survivor guilt”. For example, only 3 businesses from 9 identified applied for business rate relief as identified by a council scrutiny report.30

After the cordon was lifted in the city centre some felt that business as usual resumed quickly, in part due to the spirit of the people of Manchester.

Additionally, because Manchester had suffered another large-scale attack within the memory of most, there was a sense that the city and relevant authorities knew what to do. There is insight to suggest that partnership working between Manchester City Council, emergency services and CityCo amongst others was a key factor in the response to the incident. This was praised by Kerslake and mentioned in depth interviews.

“The civic response of the city-region was by any measure exceptional and demonstrated the enormous strength of the civic leadership and partnership in Greater Manchester. The early press conference by the Leader of Manchester City Council and the Mayor of Greater Manchester, through to the vigil attended by thousands in front of the Town Hall, stands testament to the determination that Greater Manchester would stay open for business. The strength of the civic leadership had a profound impact on how events played out in the subsequent days following the attack. The voluntary, community and faith sector played a vital role in providing support to those affected and in The nature of the showing solidarity with minority communities who might incident meant that otherwise have been vulnerable.” – The Kerslake Report31

It was also noted in response to our survey, that when businesses sought support from organisations such as CityCo and Manchester City Council amongst others they had generally positive experiences. This further demonstrates the way in which the council and its partners played a key role in providing aid and support to businesses after the attack.

some businesses perhaps were reluctant to approach authorities or to make a claim from the

hardship fund

30 https://www.manchester.gov.uk/download/meetings/id/23651/8_city_recovery_plan_following_the_ Arena_attack 31 https://www.kerslakeArenareview.co.uk/media/1022/kerslake_Arena_review_printed_final.pdf

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A case study on the Impact of the Manchester Arena attack on Local Businesses

The response by local politicians and civic representatives was also praised in our interview with representatives from CityCo.

“There was an element of political savviness to the response, in that we knew pretty early on who was responsible, but any attempt to politicise that was clamped down on immediately. Even at the end of that week, when the leader of a certain opposition party was going to come up, it was basically said that that was not appropriate because it wasn’t a political thing and it shouldn’t be political. I think that line was kept all the way through and allowed everyone to unite.”- Vaughan Allen, CityCo

4.6

Arndale comparisons As we explored the issue with interviewees, the impact of the Arena bombing was often compared to the 1996 attack on the Arndale Centre by the IRA. Whilst the Arena bombing generated much media coverage, due to the scale of the loss of life and the nature of the event that was targeted and its attendees, the 1996 Arndale bombing was seen to have had a bigger impact on businesses.

“In 1996 when there was an IRA bomb in the heart of the retail area of the city…there were 100s of businesses, particularly small businesses that were affected. This time it was more looking after people who’d been there.” – Sue Murphy, Deputy Leader Manchester City Council

It was suggested that the experience of the Arndale incident and also riots in 2011 helped the City Council, partners and other relevant authorities respond in a way that was helpful to businesses and therefore minimised the impacts on them.

“I think also the experience of going through the 1996 bomb, having gone through the riots, it’s not that you expect these things to happen, but there is resilience that is built in to the spirit as to how quickly can we get back up and running again.” – Vaughan Allen, CityCo

4.7

Attitudes to insurance Most businesses that we spoke to had a positive view of insurance generally and saw it as an important part of their business planning. The majority of our respondents, in the depth interviews and via the survey, thought that it was important to be covered. However, there was some scepticism / negative perceptions of the insurance industry around the extent of coverage and insurers reluctance to pay out in the event of a claim.

“The Insurance company just didn’t want to know. We all know insurance companies – you put a claim in and they spend the first few weeks trying to find a way to get out of paying. But I just wasn’t covered on the premium I had.” – Ian Parry, Emergency Training, UK

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This sentiment was supported by businesses’ experience following the Arena bombing. Insight from the survey showed that only 1 in 6 businesses were offered support by their insurer with almost 2/3 not offered support. This led one in three businesses to seek support elsewhere, from Manchester City Council or CityCo for example.

Most reported that they had positive experiences when doing so.

Insight from the survey showed that only 1 in

6 businesses were offered support by their insurer with almost 2 / 3 not offered support

A case study on the Impact of the Manchester Arena attack on Local Businesses

Helen Hipkiss - Pulbilc Relations, Lowry Hotel

Research has also shown that 66% of small business do not have insurance cover for bad weather, so it is perhaps not surprising that they do not have terrorism insurance cover. The research by Tower Gate insurance revealed that 66% of SMEs reported lost revenue due to bad weather and almost a third (31%) suffered weather-related damage to property over the last five years.

It is surprising to find that nearly half (44%) have no business continuity plan in place to ensure they can continue trading, while over two thirds (69%) do not have any insurance cover to protect them.32

4.8

Attitudes to terrorism insurance When we investigated attitudes to terrorism insurance specifically, there were mixed awareness about the product. Insight from our survey of Manchester businesses suggested that about half of businesses that responded were aware of the product and saw it as important to their business, whereas half of businesses had no awareness of the product.

“I believe that we do have terrorism insurance in place. The proposed changes would be helpful if they were in place. I believe that the hotel was a target at one point so I’ve done a lot of work on what would happen if the hotel had a terrorist attack” – Helen Hipkiss, Lowry Hotel

Despite this lack of prior awareness, when businesses were asked about the product, they almost universally felt that it could be important for their business. In response to the survey, a third of businesses reported that their perception of terrorism had changed following the Manchester Arena attack.

“I guess you treat it like appliance insurance at home, something may not happen but in the case it does, you are happy you have paid for the insurance. Think it’s a good thing to have but as with any business you have to look at costs” – Gareth, Waxy O’Connor’s

However, there were a number of caveats that highlighted barriers to businesses taking out terrorism insurance cover. In particular the cost of adding terrorism insurance to their insurance cover was seen as important. 40% of businesses surveyed thought that making cover affordable was important and almost half of respondents said that they would take it up if the impact on their premium was modest. In addition, half of respondents said that the level of cover was important, and 40% saying that a guarantee of payment was a key factor.

“If it was affordable I wouldn’t hesitate. It’s unlikely, touchwood, that we’ll get hit again at the Arena but I wouldn’t hesitate. I would take it. I hadn’t thought about it before but if it was there I would take it now. Even if it’s £100 on top of what I pay now. It might be too late to save my company but if it saves someone else’s, it all helps.” - Ian Parry, Emergency Training UK

“FSB were toying with the idea of offering a terrorism insurance element as part of the FSB insurance offer. Don’t know where that’s got to. Thinks that uptake of terrorism insurance amongst members would be representative of wider small business community and generally pretty low.” – Richard Hyde, Federation of Small Business 31

32 https://www.towergateinsurance.co.uk/trade-specific-insurance/small-businesses-brace-yourselves

A case study on the Impact of the Manchester Arena attack on Local Businesses

Indeed, as mentioned by CityCo in our interview with them, what businesses want is a quick response and a return to business as usual as soon as possible following an incident.

“Speed of response in response to any incident is really important. The ability to get cash out really quickly. Support for lost earnings and cash flow is really important. Some of that is around preferred suppliers’ models and those sorts of things. We know that glass will be destroyed, and there were hotels that took 5 – 6 months to get that replaced.

“People want reassurance that you won’t be arguing for the next 4 or 5 months about whether you are going to be paid or not but that you will be working to try and get the business back up and running almost immediately, getting a cash supply to get back up and running, and then working with you to get it back together.” – Vaughan Allen, CityCo

Risks related to cyber threats were excluded from terrorism insurance cover until April 2018 when new policies were underwritten and offered. This meant that physical acts of destruction caused by a cyber trigger were now included in its cover. This is likely to be met with approval by small business as research has shown that more than a quarter (27%)33 expect to suffer from cyber extortion in the near future. Insight from interviews with small business groups also suggested that insurance against cyber threats was a priority for them.

“It’s good that they are extending the cover to cyber, which will become more important as the 21st century progresses. I guess for us, and our members, it’s not just the insurance but the wider package so the whole resilience framework that there is. We were a bit concerned that it is a bit inconsistent.”

“It’s the flip side of the insurance. The resilience can help businesses to think more forwardly about these things and bounce back rather than waiting for the financial compensation.” – Richard Hyde, FSB

“The other thing is that businesses are aware of disaster recovery, but they are thinking about floods or cyber - attacks, not terrorism. It is not really on their radar. The smaller the business, the less likely they are to have thought about disaster recovery. That is something the insurance industry could help with.” – Robert Downes, FSB

It is important to note that this will not fill all the gaps, particularly as it only includes physical losses, and cyber threats or triggers could lead to knock on effects such as additional business security costs.

32 33 https://www.businessleader.co.uk/uk-smes-prepared-prolonged-cyber-attacks/33898/

A case study on the Impact of the Manchester Arena attack on Local Businesses

5

Conclusions & next steps Our research has highlighted that businesses that were close to the attack or whose business was greatly exposed to the Arena, suffered greatly as a result. The small businesses we researched operate in highly competitive environments and the difference between profit and loss is delicately poised.

There were a variety of ways in which these businesses were impacted by the attack. For some they were prepared, for others they proved to be resilient because of their own resourcefulness or the support of other agencies. But most were at best distracted from the focus needed to run and drive their businesses forward. Significant impacts were in terms of closure of businesses, reduction in footfall / trade following the attack, impacts in terms of staffing and acts of generosity / altruism in the wake of the attack.

In some cases, businesses reported that they thought that they would be covered by their existing insurance but found out from their insurer that this was not the case. The FSB said that this represented a gap between expectations and reality.

Some of the stakeholders suggested that the impact of the Arena attack on business and the economy were not as great as the 1996 IRA bombing of the Arndale Centre. Whilst the Manchester Arena bombing involved a large loss of life and received widespread publicity due to the nature of the event targeted and its attendees, the impact on business was limited to the extent outlined above.

The response by Manchester City Council and CityCo amongst others has been praised in particular in the Kerslake report. The response was informed by the city’s experience of the 1996 attack. Given the high-profile nature of the attack and the assets that Manchester had to draw on, they still feel that they could have done more to support the business and local communities.

This should act as a warning to other towns and cities as they prepare against terrorist threats.

Our exploration of attitudes to business insurance revealed that whilst many saw insurance as an important part of their business, the majority of businesses, were sceptical about the industry – which is perceived to not offer appropriate coverage and to be difficult to claim from.

Views on terrorism insurance specifically, was also examined. Awareness of the product was low amongst businesses – even here in Manchester where there have now been three bombings and a major episode of civil disturbance. However, once awareness was raised, most thought that terrorism insurance was necessary and important. There is some evidence that Views on terrorism despite the generally low level of awareness, the story insurance specifically, around the need for specific cover for the impact of was also examined. terrorism has developed in Manchester. We believe that this presents an opportunity for the industry to Awareness of potentially pilot an awareness and marketing campaign the product was in Greater Manchester. Such a move would be low amongst welcomed by some of the most relevant stakeholders businesses such as the elected Mayor, City Council, and business organisations.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

34

Research has shown that the majority of businesses do not even have cover for bad weather, so it is perhaps not surprising that they do not have cover for terrorism.

As a result of the insight gathered and set out above, a number of recommendations have been developed.

These are detailed in the recommendations section of this report. These should be developed and tested for feasibility and thought should be given to implementation and delivery.

Research has shown that the majority of

businesses do not even have cover for bad weather, so it is perhaps not surprising that they do not have cover for terrorism.

In terms of next steps, more research should be undertaken. This report gives a snapshot of the impact on business of one particular incident. As described in this report there are particular circumstances with regard to the attack and with regard to the City and its response, that mean that understanding and learning from this incident is not necessarily replicable elsewhere.

A further case study of a different terrorist or civil emergency incident could shed further light on the issues around business impact, and attitudes to insurance generally and terrorism insurance specifically. Indeed, the example of Salisbury could be an interesting case study as this is currently not covered under terrorism insurance as it involves state on state actions.

A case study on the Impact of the Manchester Arena attack on Local Businesses

6 Recommendations 6.1

Awareness raising General awareness of the benefits of terrorism insurance needs to be raised.

Businesses are often not covered for terrorism insurance and a primary reason for this is that they do not see it as integral to their business. Stories of how cover has proved vital to business recovery and resilience would be beneficial.

Our research suggests that when businesses are aware of the product, and if their premium only increases by a modest amount, they are likely to consider cover. As such, raising awareness amongst businesses of terrorism insurance as a product should be the priority.

6.2

Partnership and promotion It is difficult to engage small and medium sized enterprises in anything that is not directly about their immediate business priorities. Finding trusted partners to both advocate the need for terrorism insurance to businesses as well as potentially offering access to terrorism insurance is worthy of consideration For example, the Federation of Small Business has considered the issue and, like other such confederations, they offer their own products designed to help their members manage risk – such as legal, human resources and indeed some insurance products. British BIDs, local chambers of commerce or local authorities all have access and, to varying degrees, relationships of trust with businesses.

6.3

Bridging the gap With the planned expansion in scope of terrorist cover, there is an opportunity for Pool Re and its members to communicate to potential clients that it will now better meet their needs. Insuring not just assets but also business continuity is a powerful selling point, if this can be articulated to them clearly and concisely. Particularly, as in this case, most businesses were impacted in ways that were not covered by terrorism insurance.

Terrorism insurance should be promoted as a vital element in bridging the gap between what business expects and receives in the wake of a terrorist attack.

What was available to businesses would have to be clearly articulated by insurers and understood by policyholders.

6.4

Terrorism training Manchester’s previous experience of dealing with terrorist incidents and civil disorder cases, together with excellent civic leadership and well developed partnership working meant that their response in this case study was widely praised. As such the impact of the incident here was probably mitigated to a degree. It is important to emphasise that this might not be the case in other places.

Terrorism training, formerly named Project Griffin, but now known as ACT Awareness, is a scheme that aims to raise awareness of and preparedness towards terrorism amongst business. More information can be found in Appendix 4.

Terrorism insurance should be promoted as a vital element in bridging the gap between what business expects and receives in the wake of a terrorist attack.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Pool Re could position terrorism insurance as integral to any co-ordinated and coherent response to an attack through sponsorship or some other high profile contribution to ACT Awareness terrorism training to businesses and use this as a platform to promote the concept of terrorism insurance.

Equally, as not all cities have relevant experiences to draw from there could be an opportunity to create or commission some sort of training or advice package / event. The aim of this could be to share learning and best practice, for city authorities, or business district management companies and may help them to prepare for terrorist incidents and minimise the potential impacts on business. Pool Re could commission or sponsor training of this kind, and use it as a vehicle through which to raise awareness of terrorism insurance products.

6.4.1 Give a Grab Bag

One very practical idea arose from insight provided by CityCo. Part of the ACT Awareness terrorism training advises that each business should have a “grab bag” close at hand at work with vital items (such as keys and passes) to facilitate a quick evacuation in the event of a terrorist attack. It would be relatively easy and inexpensive for Pool Re to provide these bags for its members to give away to potential terrorism insurance clients.

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6.5

Manchester used as an example Sue Murphy, the deputy leader of Manchester City Council said that Manchester was now part of a “club they didn’t want to be in”. Despite the attack, Manchester had many assets that were in its favour – it was in a large city with a high profile, it was at an event with a high-profile pop star and many of the attendees of the event were young people. As such they raised over £20 million pounds but even that wasn’t enough.

When incidents target more marginal communities, like the attack on the pulse nightclub in Orlando, Florida, or if terrorists targeted a smaller city that didn’t have previous experience of an incident like this, there is likely to be far greater need.

While Manchester has many assets that aid resilience business leaders and senior politicians like the Mayor of Greater Manchester, recognise that increasing the level of terrorism insurance is important for local businesses.

Manchester could be a productive place to pilot the role that terrorism insurance can play as part of resilience measures in the event of any future attacks.

6.6

Public sector procurement and best practice schemes Many small and medium sized businesses provide services for the public sector. Public sector procurement is driven by framework agreements that can stipulate criteria for contractors to meet. The robustness of business continuity plans is already a measure in place for contractors / suppliers to evidence so it could be worth exploring the potential of including terrorism insurance cover in this element of commissioning frameworks.

Local authorities in particular are also under an increasing obligation to trade locally and to demonstrate social value in their contracts. Demonstrating resilience to the threat of attack is consistent with this priority.

This would require a significant influencing campaign to ensure that terrorism insurance is framed as a strength and an integral part of building local economic resilience, rather than a fear of vulnerability.

Demonstrating resilience to the threat of attack is

consistent with this priority

A case study on the Impact of the Manchester Arena attack on Local Businesses

This is an example of upstreaming behaviour change and would to a degree, future proof local authorities against terrorist attacks.

6.7

More flexible models of cover Our research showed that whilst businesses were favourably inclined towards terrorism insurance, they were keenly price conscious and concerned about coverage. As such, a differentiated model where premiums could be adjusted to level of cover, or excess payments, could be attractive to some businesses.

Providing a one-size-fits all insurance plan limits the ability of businesses to choose a plan that best caters to their business needs and assumes that all businesses require the same level of cover. To address concerns of flexibility and insurance cover relevance, a three - tiered insurance product could be considered.

Insight from our survey suggests that terrorism insurance would look relevant to businesses if it is affordable, guarantees payment and afforded a fair amount of cover. Based on this a three-tiered product could provide businesses with attractive varied options, flexibility and a tailored plan that is relevant to the needs of a business.

A product of this calibre could include fixed features such as access to a 24/7 assistance and advice help line and an option to customise your policy with extra features which could include the option of insuring multiple sites.

6.8

Streamlining processes We found that attitudes to the insurance industry within this group of businesses is one of scepticism. There is a prevailing narrative that it is hard to claim, and that insurance companies are reluctant to pay out. Pool Re could encourage its members to develop quick, simple and non-bureaucratic processes to make these products attractive to businesses.

In the event of an attack, the top priority is for speed and simplicity.

Businesses were totally absorbed in reacting to the immediate impact on their business. Anything that detracts from that (even if it will be financially beneficial) will get scant attention. Anything that can help with that task will be embraced.

We believe that there is merit in exploring the feasibility of an industry wide advice and support line that would be available in the immediate aftermath of any attack and be operational for a period afterwards.

6.9

Broadening insurance cover Pool Re scheme ‘provides comprehensive cover for damage to commercial property and the associated business interruption costs’ (Pool Re, 2018) and extended its cover to include ‘material damage and direct business interruption caused by acts of terrorism using a cyber trigger’ (Pool Re, 2018) in April this year, Pool Re also welcomed and urged the government to amend the 1993 Reinsurance Act to enable it to ‘extend its cover to include non-damage business interruption losses resulting from acts of terrorism’ (Pool Re, 2018).

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A case study on the Impact of the Manchester Arena attack on Local Businesses

While calls to broaden the scope of insurance cover under the Reinsurance Act will work to close the gap, we currently have with terrorism insurance, this excludes other notable gaps that are prevalent among insurance cover, e.g. business interruption caused by incidents other than terrorism. An example of this is the 2011 Manchester Riots, where businesses would have been impacted by business disruption, fall in footfall and loss of attraction but would possibly be unprotected for non-damage business interruption losses.

Limiting insurance cover to solely address potential losses and liabilities that might occur following a terrorist attack may be a deterrent or barrier to selling terrorism insurance, whereas expanding the remit (or offering a bundle of cover) to include causes such as cyber threats/attacks and or civil disorder could provide a more relatable, relevant and attractive product for businesses of all sizes to consider.

Additionally, an incentive for small business to take up terrorism insurance could be some sort of no quibble upfront cash payment that would be paid immediately to help with cash flow and to support businesses return to business as usual as soon as possible.

6.10 Follow up on this report

There would be significant merit in Pool Re following up this report by meeting with some of the key stakeholders who have either participated in it or whose work is cited. These should include elected Mayor of Greater Manchester, Andy Burnham and Robert Kerslake, author of the major review of the attack.

Limiting insurance cover to solely address potential losses and liabilities that might occur following a terrorist attack may be a deterrent or barrier to selling 38

terrorism insurance

A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 1 – sources consulted for secondary research • https://www.jec.senate.gov/public/_cache/files/79137416-2853-440b-9bbee1e75d40a79d/the-economic-costs-of-terrorism---may-2002.pdf • http://www.utdallas.edu/~tms063000/website/Econ_Consequences_ms.pdf • http://www.socsci.uci.edu/~mrgarfin/OUP/papers/Enders.pdf • https://www.politico.eu/article/brussels-terror-attacks-cost-belgian-economyalmost-e1-billion-report/ • https://www.theguardian.com/world/2016/aug/23/terror-attacks-cost-paris-region750m-in-lost-tourism-officials-says • https://www.ajginternational.com/news-insights/articles/news/2017/survey-revealsuk-smes-under-prepared-to-respond-to-rising-security-threats/ • http://www3.weforum.org/docs/TT15/WEF_TTCR_Chapter1.2_2015.pdf • https://news.sky.com/story/will-the-westminster-terror-attack-have-an-impact-onthe-economy-10811465 • https://www.jesip.org.uk/uploads/media/Documents%20Products/Kerslake_ Report_Manchester_Are.pdf • https://www.fsb.org.uk/docs/default-source/fsb-org-uk/small-business-as-usual. pdf?sfvrsn=0 • https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7613 • https://www.poolre.co.uk/wp-content/uploads/2017/09/TRAC_TMR-2-17-web-3. pdf • https://www.poolre.co.uk/wp-content/uploads/2017/06/Post-Incident-Report_V2_ lo-res.pdf • https://en.wikipedia.org/wiki/List_of_terrorist_incidents • https://www.independent.co.uk/news/uk/home-news/amesbury-incident-salisburybusinesses-novichok-poisoning-nerve-gas-attack-a8433896.html • https://www.businessbiscuit.com/8-news/4869-nerve • https://www.mi5.gov.uk/threat-levels • https://www.met.police.uk/advice/advice-and-information/t/terrorism-in-the-uk/ current-threat-level-UK/ • https://www.theguardian.com/uk-news/2018/jun/03/uk-faces-two-years-of-severeterrorism-threat-warns-home-office • https://www.bbc.co.uk/news/uk-43200966

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 2: Template depth interview script Background We are doing independent research on the aftermath of the Manchester Arena attack last year and its impact on local businesses at the time. It also seeks to identify what can be done to help businesses function more effectively in future after any other potential terrorist tragedy.

The research is for Pool Re who are Government sponsored mutual organisation for the entire insurance industry covering terrorism related incidents. We have produced an online survey that is also being circulated by Manchester City Council Business Continuity Forum and CityCo the Manchester City Centre Management Company as they recognise its importance to protect Manchester Business in future.

Phone interview Thank you for agreeing to interviewing with me today, we appreciate you giving up your time to speak about this. Firstly, I’m going to run through a little guide for you: • There are no trick questions – and this is about how you feel and your experience.

• Reinforce confidentiality – if you wish, nothing will be ascribed to you. We will be developing a range of stories and case studies, using audio and video footage, and if you are happy to take part in this way we can include extracts with your consent.

• Any questions at this stage?

1. Consent Before we start, can I confirm that you consent to us, The Campaign Company using your responses as part of our research and case study for Pool Re of the impact of the Manchester attack on businesses in the area ahead of a change in legislation which will extend the Pool Re scheme and offer broader cover for all businesses in the future.

Can we name your business or would you prefer to remain anonymous?

2. About you [Aim: Questions to set scene and relax participant/s and also obtain contextual information about their current situation and start the conversation about the impact of the Manchester Arena attack] • Tell me a little bit about your role and the role of your organisation (support organisation, public body, business community representative) 3. The impact of the Manchester Arena attack and experience of support [Aim: Understanding more established and unexpected effects of the attack on businesses and individuals and the support available at the time] Impact Following the attack, can you describe the immediate impacts you can remember on businesses in Manchester, and in particular those you support/represent? (closure of business / fall in footfall / staff unable to travel to work / restocking business)

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Were there any particular challenges that you can recall? Did anything take you by surprise?

Did any of the effects last longer or have more impact than you had anticipated? (staff issues / consumer confidence / fall in revenue)

A case study on the Impact of the Manchester Arena attack on Local Businesses

Do you think that there has been a lasting impact on the business community?

Support Were you involved in providing support for business recovery after the attack? If so, could you describe this?

What was your experience of the support available? (How easy was it for businesses to find the support? Did it meet expectations?)

Is there any information or support that would have made it easier for either you or the business community before or after the attack? Why do you think that?

Is there any ongoing support available?

4 Attitudes to insurance How important would you say insurance in general is to the business community that you support?

What are your thoughts on terrorism insurance? Have you heard of this? If so, how?

What do you think is the level of cover amongst SMEs in Manchester?

5 Planning for the future [Aim: Understanding how businesses could be supported in light of the Manchester Arena attack]

In terms of your own organisation’s preparation, is there anything you would have done differently ahead of the attack?

Has the attack, and the consequences for business, changed your thoughts regarding terrorism insurance at all? Why is that?

What do you think this insurance need to look like to be relevant for the organisations you represent and/or support? (cost / level of cover)

6 Close Anything else you want to add at this stage?

Is there anyone else you can think of that it would be useful for us to speak to as part of this work?

7 Consent I would like to re-confirm that you consent to us, The Campaign Company using your responses as part of our research and case study for Pool Re of the impact of the Manchester attack on businesses in the area ahead of a change in legislation which will extend the Pool Re scheme and offer broader cover for all businesses in the future.

• Can we name your business or would you prefer to remain anonymous?

Thank you very much for your time and contribution to our research. I hope you have a good day.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 3: Online survey Introduction Thank you in advance for taking part in this research.

This survey is being conducted by The Campaign Company, an independent research company, on behalf of Pool Re, the government backed terrorism reinsurance body. Earlier this year the government announced their intention to amend the Reinsurance Act 1993 (Acts of Terrorism). This change in legislation will enable Pool Re to extend its cover to include terrorism related non-damage business interruption.

The findings of this research will be used to develop a case study of the impact of the Manchester Arena attack on businesses and to enable a better understanding of business insurance and support needs following a terror attack.

The survey should take between five and ten minutes to complete. All responses unless otherwise stated will be recorded anonymously and the data only used in relation to this project.

[I consent to having my information collected and stored. View Privacy Policy] Section 1: About you We’ve just got a few questions about you before we begin.

• Which of these industries does the business belong to?

- Entertainment - Financial services - Food - Government - Health care - Hospitality

- Information - Marketing - Media - Tourism - Transport - Other – write in (required)

• How would you describe the business?

- Start up - Franchise - Small business

- Medium business - Large business - Other - write in (required)

• How many people are employed at this business?

- 0-10 people - 11- 20 people - 21- 30 people - 31 -40 people

- 41-50 people - 50+ people - Don’t know

• Please note the approximate proximity of the business to the Manchester Arena?

Section 2: The impact of the Manchester Arena attack • Was your business or the business you work for impacted by the Manchester Arena attack? (for example, staffing issues, supply interruption, business continuity or any other way)

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- Yes - No - Don’t know

A case study on the Impact of the Manchester Arena attack on Local Businesses

• Following the attack, can you describe the immediate impacts you can remember on your business? (please select all that apply)

- Closure of business - Fall in footfall - Restocking business

- Staff (e.g. financial loss, well-being, travel) - Other (please state) - Access to the business

• If you have any additional information on the immediate impact of the Manchester Arena attack on your business, or the business you work for, please note below.

• Do you think that there has been a lasting impact on the business?

- Yes - No - Don’t know

• Please explain the lasting impact below.

Section 3: Experience of support after the Manchester Arena attack •

As a business, were you offered any support from your insurer after the attack?

- Yes - No - Other – write in (required)

• Please tell us below about your experience of receiving or seeking support from your insurer.

•

As a business, did you receive or seek support from elsewhere following the attack?

- Yes - No - Other – write in (required)

• Please tell us about your experience of either receiving or seeking support below.

Section 4: Awareness of terrorism insurance • How important would you say insurance in general is to you in your business?

- Very important - Important - Neither

- Fairly important - Not important

• What kinds of insurance cover do you have?

- Public liability - Employers’ liability - Product liability - Professional indemnity

- Business interruption - Business property coverage - Cyber insurance - Other – write in (required)

• Before the Manchester Arena attack, had you heard of terrorism insurance?

- Yes - No

• What were your thoughts on terrorism insurance and did you have a level of cover in place at the time?

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Section 5: Supporting businesses Earlier this year, March 2018, the government announced their intentions to amend the Reinsurance Act 1993 (Acts of Terrorism), which will enable government-backed terrorism reinsurer Pool Re to extend its cover to include terrorism related non-damage business interruption.

• Has the attack and the consequences for your business, made you think about your insurance needs for the future?

- Not at all - Slightly - Neither - Quite a bit - Certainly

• Has the attack and the consequences for your business, changed your thoughts regarding terrorism insurance at all?

- Yes - No - Don’t know

• Please explain how the attack and the consequences for your business, has changed your thoughts regarding terrorism insurance • If your business was offered terrorism insurance if it only added a modest amount to your premium (£100 or less, for example), which covered business interruption as well as property damage, would you opt in to having this provided?

- Yes - No - Don’t know

• What would this insurance need to look like to be relevant for you?

- Affordable - Level of cover - Guarantee of payment - Other – write in (required)

Section 6: Further research We, The Campaign Company will be conducting face-to face interviews in the next few weeks. If you would be interested in participating, please provide the name of your business, full name, position in business, contact number, and email address.

- Name of business - Full name - Position in business - Email address - Telephone

You can change your mind at any time by emailing privacy@thecampaigncompany.co.uk or contacting us on 02086880650.

For further details on how your data is used and stored: http://www.thecampaigncompany.co.uk/our-privacy-notice/

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 4: Survey results In addition to qualitative insight gathered, a quantitative survey was also conducted.

This was designed to give us additional insight in to how businesses of all sizes in Manchester were impacted by the Arena attack and their attitudes towards insurance.

The survey contained 22 questions that were tailored to gain perspectives and insight from businesses that were both affected and unaffected by the Arena attacks. A thematic structure was used to understand the degree of impact following the Arena attacks as well as general attitudes to business and terrorism insurance. The themes included in the survey are as follows: about the business; the impact of the Manchester Arena attack; experience of support after the Manchester Arena attack; awareness of terrorism insurance; and supporting businesses. The full survey can be found in Appendix 3.

To ensure a range of businesses were represented, we conducted desk-based research to locate and contact businesses placed within close proximity to the Manchester Arena. For businesses that were interested in our research, we provided opportunities for them participate by completing our online survey, which was sent by email and through telephone and face to face interviews. Additionally, we partnered with Manchester City Council to circulate this to the Business Continuity Forum, and CityCo who sent the survey to a cross-sector catchment of member businesses.

In total we received 25 survey responses, which comprised of 20 complete responses and 5 partial responses. The charts (Chart 1-4) below outline the composition of businesses that participated in the survey.

Chart 1: Businesses by industry Industry

Count

Entertainment

Financial services Government

Health care Hospitality Transport Information Tourism Other TOTAL

3 1 1 1 5 1 1 1 11 25

Businesses belonging to a range of industries participated in the survey. Those that identified as ‘Other’ listed sectors/industries such as education, entertainment and education, food retail, museum and galleries, non-profit, city centre management, religious and beauty.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Chart 2: Businesses by Size

Size of business

Count

Small Medium Large Other TOTAL

3 7 9 6 25

Responses to other types of business included: charity, educational establishment, public building and a council owned art gallery.

Chart 3: Businesses by people employed

People employed at the business

Count

Small

0-10 people

21-30 people

31-40 people

41-50 people

50+ people TOTAL

3 1 4 2 2 16 25

Chart 4: Businesses by proximity to the Manchester Arena

Proximity to the Manchester Arena

Count

Less than a mile

Between 1-2 miles

More than 2 miles TOTAL

21 2 2 25

The following section explores themes that emerge from the survey responses.

The impact of the Manchester Arena attack Of the 25 responses, 19 respondents stated that their business or business they work for was impacted by the Manchester Arena attack, compared to 6 respondents who reported their business to have not been impacted.

Graph 1: Impact Was your business or the business you work for impacted by the Manchester Arena attach? (for example, staffing issues, supply interruption, business continuity or any other way)

19

Yes 6

No 46 0

5

10

15

20

25

A case study on the Impact of the Manchester Arena attack on Local Businesses

Graph 2 explores the way in which businesses describe how their business or the business they work for was immediately impacted by the Manchester Arena attacks.

Graph 2: Immediate impacts Following the attack, can you describe the immediate impacts you can remember on your business (please select all that apply).

13

Staff (e.g. financial loss) Access to the business

10

Fall in footfall

10 7

Closure of business 5

Transport issues 2

Other 0

Restocking business 0

3

6

9

12

15

In response to the immediate impact of ‘access to business’ some respondents highlighted limitations to accessing to businesses and office sites, as these businesses were located within the perimeter of cordoned off areas. One respondent mentioned prohibited access to their site for 24 hours, whereas another mentioned their business being located behind the police cordon for approximately a week. Thus, highlighting that limited access to businesses following the Arena attacks varied among businesses.

Also included in these responses was the increase of public searches.

Additional comments on immediate impacts after the Arena attacks were noted by respondents, these include: • Coordinating a briefing in less than 24 hours to provide businesses updates regarding the attack, as well as collaborating with Greater Manchester Police (GMP) and Manchester City Council (MCC) to promote business continuity to private and public sectors • Staff experiencing very minor travel disruption • Emotionally impacted • Mention of students trapped within cordon for 24 hours • Invoking business continuity planning and relocating staff • Additional costs due to need to hire additional security for a pre-planned event • Heightened fear among some members of staff • Loss in revenue due to unexpected costs • Cancellation of events • Staff unable to access work

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A case study on the Impact of the Manchester Arena attack on Local Businesses

While the majority of respondents note that their business or the business they work for experienced immediate impacts after the Manchester Arena attacks, there is a notable division of opinion when asked about long-lasting impacts on businesses.

Out of 19 responses, 10 respondents felt there had not been long-lasting impacts on their business or the business they work for. Comparatively, 7 respondents felt there had been. Only 2 respondents answered ‘don’t know’.

Some businesses further described long-lasting impacts of the attacks to their business, these include: • Decline in footfall and revenue • Business Continuity viewed and taken more seriously • Cliental fearful of visiting businesses due to the its close proximity to the train station • Mention of the Arena attack as the second bombing to occur in the vicinity • Greater consciousness around vulnerability in incidents like the Manchester Arena attack • More reliance on venues to provide a particular service e.g. security • Reminder of the need to increase security and awareness of staff Responses here suggests that following the Manchester Arena attacks, most businesses were immediately impacted, thus were affected short term. The most common impacts, as shown in Graph 1 were staff (e.g. financial loss, well-being and travel), fall in footfall, and access to business. Whereas ‘restocking of business’ is identified as the least felt immediate impact on businesses among the sample. Views on long lasting effects on business varied among respondents. While a number of businesses felt that there have not been long-lasting impacts on their business; others report that there has been a long-lasting impact and importantly for some, that their business is still experiencing such impacts.

Experience of support after the Manchester Arena attack Most businesses in the survey sample noted that they were not offered any support from their insurer after the attack. The graph below shows the breakdown of responses to the question whether or not businesses were offered support by their insurer following the Arena attacks.

Graph 3: Support from insurer after Manchester Arena attacks As a business, were you offered any support from your insurer after the attack?

11

No 4

Other 3

Yes 0

48

3

6

9

12

15

A case study on the Impact of the Manchester Arena attack on Local Businesses

Graph 3 shows that very few businesses were offered support from their insurer.

Those who selected ‘other’ tended to note that they were not sure or unaware if their business had been support by their insurer.

Experiences from businesses that received or sought support from their insurer include onsite visits and presence at a post incident meeting, and prompt filings of claims.

As previously noted one respondents point was that their business would have been “covered by insurance for damage to buildings and business continuity but not for loss of income during the closure periods and lower visitor footfall”. This highlights a clear gap in the depth of cover provided by some insurers.

Some businesses noted that they both received and sought support elsewhere (6), compared to a fair few businesses (11) that did not receive and seek support elsewhere. Businesses that received and sought support elsewhere made notable references to support and advice provided by City Co, Greater Manchester Police, CTSA, Manchester City Council and the Business Continuity Forum.

Responses here show that very few businesses received support from their insurer or sought support elsewhere. However, businesses that sought support from companies or organisations external from their insurer, describe positive experiences of support provided from professional bodies such as City Co and the Business Continuity Forum; and from both Greater Manchester Police and Manchester City Council. All of which highlights the way in which the Council, the Police and organisations played a central role in providing aid and counsel to local businesses in Manchester postattack. Experiences articulated by businesses reveal an opportunity for Pool Re to have conversations with local businesses about the benefits of having terrorism insurance and the ways in which such insurance closes the visible gap in current cover that tends to exclude direct business interruption which was experienced by many businesses as highlighted in the Graph 2.

The following sections will explore responses and attitudes to business and terrorism insurance.

Awareness of terrorism insurance The graph (Graph 4) below shows that most respondents have a fairly consistent view on the importance of insurance to their businesses.

Graph 4: Importance of insurance to your business How important would you say insurance in general is to you in your business?

2

Fairly important

4

Neither

5

Important

11

Very Important 0

3

6

9

12

15

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Responses show that a majority of businesses view insurance as either ‘fairly important’ (2), ‘important’ (5) and ‘very important’ (11) totalling to 18 across the spectrum of importance, compared to those who choose ‘neither’ (4).

The following graph illustrates what types of insurance businesses have.

Graph 5: What type of insurance do you have?

4

Cyber insurance

5

Product liability Other

7

Business interruption

7 8

Professional indemnity

10

Business property coverage

16

Employers liability

17

Public liability 0

4

8

12

16

20

Graph 5 shows that most businesses have insurance to cover employers and public liability. Business property coverage and professional indemnity follow as the main type of insurance cover, whereas cyber insurance and product liability are the least used insurance cover.

Other kinds of insurance cover mentioned in the ‘Other’ category were travel, collections and terrorism insurance.

Graph 6: Before the Manchester Arena attack, had you heard of terrorism insurance?

Yes

11

No

11 0

50

3

6

9

12

15

The survey showed a clear division between respondents that had and had not heard of terrorism insurance before the Manchester Arena attack. See graph above (Graph 6).

A case study on the Impact of the Manchester Arena attack on Local Businesses

A mixture of views were expressed when asked ‘What were your thoughts on terrorism insurance and did you have a level of cover in place at the time?’. These varied from businesses mentioning that their business has had terrorism insurance in place; recognised importance of having this type of insurance – noted importance for one respondent due impacts the business felt during the IRA; views of terrorism insurance as an essential risk transfer tool; and finally, the view of terrorism insurance being expensive. Pool Re’s cover was also highlighted as expensive and inflexible for some.

Overall, insurance viewed with some importance by many businesses in this sample, with a majority describing the importance of insurance, in relation to their business to be ‘very important’. As shown in Graph 5, employers’ liability and public liability are the main types of insurance cover used by businesses in the sample, while cyber insurance is the least. Data here shows that businesses opt in for a variety of insurance types, especially risk financing insurance. However, it is apparent that while insurance covers for employers’ liability and public liability seem to be the most frequent type of insurance cover, most businesses experienced business interruption following the Arena attacks, which is one of the least selected types of insurance cover by the sample – a type of cover which would have benefitted a majority of businesses in the aftermath of the attacks. When asked specific questions about terrorism insurance, responses reveal a clear distinction on knowledge about terrorism insurance. Raising awareness on the existence of terrorism insurance would be integral to enabling businesses of all sizes have the relevant information to ensure they can have the choice to opt in to having terrorism insurance and or gain access to terrorism training which would essentially help businesses to be equipped and prepared to mitigate potential risks and impacts of terrorist incidents on their business.

Supporting businesses This section focuses on respondents’ views on general and terrorism insurance in hindsight to the Manchester Arena attacks.

Responses to thoughts about future insurance needs vary among the sample.

The below graph illustrates how the Arena attack and its impact on business has precipitated some thought on business insurance needs for the future, which is shown by the number of respondents who answered ‘slightly’ (5), ‘certainly’ (5) or ‘quite a bit’ (4) in response to the question outlined below. For one respondent, the attack and consequences on the business had not made them think about insurance needs for the future, whereas 6 respondents answered ‘neither’.

Graph 7: Insurance needs for the future Has the attack and the consequences for your business, made you think about your insurance needs for the future?

5

Certainly 4

Quite a bit

6

Neither 5

Slightly 1

Not at all

51 0

2

4

6

8

10

A case study on the Impact of the Manchester Arena attack on Local Businesses

While the above graph shows perspectives on general insurance needs for the future, the graph below shows how respondents responded to whether the attack and its effects had changed thoughts on terrorism insurance.

Graph 8: Terrorism insurance Has the attack, and the consequences for your business, changed your thoughts regarding terrorism insurance at all?

9

No 7

Yes Don’t know

5 0

2

4

6

8

10

For a number of businesses, the Arena attack and its ramifications have not changed thoughts regarding terrorism insurance. While a few were not sure, a fair number of respondents felt that the attack and its effects had changed their thoughts on terrorism insurance. Respondents who answered ‘Yes’ to the question ‘Has the attack and the consequences for your business, has changed your thoughts regarding terrorism insurance?’ were given an opportunity to explain how. Reasons for a change in thought on terrorism insurance included the view that is such insurance is a necessity and of importance to have. Other responses alluded to the point that the attack reinforced the need for terrorism insurance and increased security measures that are prevalent in some business areas. It was also noted that although damage normally tends to be covered under terrorism insurance, unforeseen expenses in the aftermath needs to be covered too e.g. extra security, cleaning up, staff welfare costs for private counselling. One respondent suggested that a “study should take place 12 months after an attack to decide the financial impact on businesses affected and financial compensation given to businesses, funded from seized funds from proceeds of crime.”

The next graph shows respondents views on opt in to provision of terrorism insurance.

Graph 9: Opting in to terrorism insurance If your business was offered terrorism insurance, if it only added a modest amount to your premium (£100 or less for example), which covered business interruption as well as property damage, would you opt in to having this provided?

1

No Don’t know

10

Yes

10 0

52

2

4

6

8

10

A case study on the Impact of the Manchester Arena attack on Local Businesses

Although one respondent answered ‘No’ to the above question, most respondents were either unsure or certain that they would opt in to having terrorism insurance, which covered business interruption, if offered.

The last graph (Graph 10) illustrates what respondent would value in terrorism insurance for it to be relevant to their business.

Graph 10: Terrorism insurance relevance What would terrorism insurance need to look like to be relevant for you?

11

Level of cover Affordable

9

Guarantee of payment

9 7

Other 0

3

6

9

12

15

The above responses suggest that in order for terrorism insurance to be relevant, a focus would be needed on the level of cover provided, its affordability and guarantee of payment. Other comments include that such insurance “must come with assistance on policies and education to board holders on the need for it” and an option where businesses can “select cover for sites where terrorism risk is perceived to be high”.

The insight here suggests that the Manchester attack and its impact on businesses did not drastically alter the way in which businesses think about future insurance needs in general. However, a more polarised view is evident in regards to terrorism insurance exclusively, where a high number of businesses felt that the attacks had not made them change their thoughts about terrorism insurance, whereas for others it did. While the Manchester Arena attacks and its effects may not have influenced how many view terrorism insurance, responses to whether businesses would opt in to terrorism insurance highlights how businesses are either unsure if they would opt in or would opt in if terrorism insurance was offered. Overall, businesses consistently show that terrorism insurance would be relevant to them depending on the level of cover, how affordable it is and assurance of guaranteed payment. Thus, providing terrorism insurance that is flexible, tailorable, cost-effective and relevant to businesses of all sizes would serve to be a product that is both favourable and appealing to some businesses.

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A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 5: Terrorism Awareness training The recommendation in the Executive Summary refers to sponsorship and support for terrorism awareness training. Below is a summary of some of the programmes that exist and have existed and might be of use in determining how this is best pitched.

Current Training and Awareness ACT Awareness is the national counter terrorism awareness initiative for business produced by the National Counter Terrorism Security Office (NaCTSO) to protect cities and communities from the threat of terrorism.34 Previously known as Project Griffin, this is part of the national counter terror awareness campaign banner: Action Counters Terrorism (ACT). This change happened in 2016 because Counter Terrorism Policing (CTP) moved all of its branded products under the ACT-Action Counters Terrorism banner. Most of the old Project Griffin programme continued as part of the new brand.

As well as training and awareness described below, there is a general online campaign website too.35 Police forces deliver ACT Awareness Events, governed by NaCTSO. These can be run Police premises or they can be offered in-house to businesses.

ACT Awareness provides an overview of the following areas to give organisations an awareness of the threat from terrorism: • Current threat level • Prevent strategies • Hostile reconnaissance • Methods of attack There is no cost to attend the event. A personalised certificate of attendance will be sent out after the event.

In-House training is run by Counter Terrorism Police. A Counter Terrorism Security Advisor attends the business to deliver a two-hour presentation.

The presentation will cover the following areas: • Current threat level • Hostile reconnaissance • Stay Safe The training aims to have a minimum of 20 delegates required with the maximum being dependent on your venue capacity. There is no cost for this service.

The previous Project Griffin Industry Self-Delivery option was closed.36 It was replaced in April 2018 by ACT Awareness eLearning.37

34 https://www.gov.uk/government/organisations/national-counter-terrorism-security-office

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35 https://act.campaign.gov.uk/ 36 https://www.gov.uk/government/news/industry-self-delivery-enters-a-new-phase 37 https://www.gov.uk/government/news/act-awareness-elearning

A case study on the Impact of the Manchester Arena attack on Local Businesses

Previous Training Programmes Project Griffin was originally introduced by the City of London Police and Metropolitan Police in April 2004 to help “London’s financial sector better protect itself against terrorist threats”. It was then spread to businesses and security services as a way to get educated about counter-terrorism and crime prevention, be the ‘eyes and ears’ for the police and be prepared for major emergency.

Its stated mission was to ‘engage, encourage and enable members of the community to work in partnership with the police to deter, detect, and counter terrorist activity and crime,’ providing an official and direct channel through which the police can share valuable information and provide relevant updates concerning security and crime prevention. The system was praised for raising awareness of security and terrorism issues among the business community as well as for facilitating the sharing of valuable intelligence before, during and after a crisis.38 The goal of the program was to bring together the police, fire brigade, ambulance services, private security industry and other government agencies in deterring, disrupting and supporting operations targeting terrorist and extremist activity.

The aim of Project Griffin was to: • Help understand the threat from terrorism to the UK • Guide individuals on what to do if they find themselves involved in a terrorist incident or events that lead up to a planned attack • Enable people to recognise and report suspicious activity • Project Griffin holds briefing events to increase public and staff awareness of how best to reduce and respond to the most likely types of terrorist activities. The events are presented by trained police advisors delivering a range of CT awareness modules.

There were 3 components to the Project Griffin program: Awareness Day, Bridge Call and Response.39 • Awareness Day. This is a one-day seminar where police members will attend to teach course participants various skills. Depending on jurisdiction, these may include: explosives, threats identification, crime scene preservation, bomb threat management, chemical, biological, radiological and nuclear (CBRN) management, conflict resolution, reconnaissance, cordon management, crime reduction strategy and legal matters. Participants who finish the entire course will be presented with a certificate and their name entered into a register in case for a deployment.

• Bridge Call. Every week (or regular interval as determined by the police force), a conference call is placed for all participants to obtain any terrorism issues, crime or security issues. Generally speaking, this information is police intelligence information for registered participants only.

• Response. In the event of a major emergency or disaster, trained members will be deployed to support the police. They will be responsible for securing the cordon line and assist in evacuation if necessary.

55 38 https://www.gov.uk/government/publications/project-griffin/project-griffin 39 https://web.archive.org/web/20081202172542/http://www.nottsprepared.gov.uk/np_home/np-projectgriffin-argus.htm

A case study on the Impact of the Manchester Arena attack on Local Businesses

Events were free and lasted between one and six hours depending on the time available and number of modules covered. The modules were reviewed and updated regularly and by the time it was absorbed in ACT Awareness Training they covered the following topics:40 • Introduction to Counter Terrorism • Bomb Threats • Current Threat • Responding to a Firearms and Weapons Attacks • Identifying and Responding to Suspicious Behaviour • Document Awareness • Identifying and Dealing with Bombs (IED) and Suspicious Items • Drones - Unmanned Aircraft Systems (UAS) An attendance certificate showing the modules covered is awarded to staff at the completion of each event, enabling business to monitor and evidence staff development and awareness.

As well as the training there was also a Project Griffin Industry Self-Delivery option.41 As testament to its success as a valuable and effective engagement and informationsharing mechanism, the Griffin methodology and approach has been exported to and adopted by several countries, including Singapore, Australia, Canada (where it was utilised during the 2010 Winter Olympics) and the US. In New York, Griffin was incorporated into the existing Project Shield, an umbrella program designed ‘to coordinate the efforts of both public and private security activities’ for the purpose of protecting the city from terrorist attacks.42 A complementary program called ‘Project Argus’ was also deployed across the United Kingdom. Project Argus focused on “preventing, handling and recovering from a terrorist attack.” It took participants through simulated but realistic terrorist attack for participants to learn what would likely happen in an attack, what are the priorities during an attack and to have the necessary plans in place before an attack.43

40 https://www.gov.uk/government/publications/project-griffin/project-griffin

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41 https://www.gov.uk/government/news/industry-self-delivery-enters-a-new-phase 42 https://www.gov.uk/government/publications/project-griffin/project-griffin 43 https://web.archive.org/web/20090526053549/http://www.nactso.gov.uk/argus.php

A case study on the Impact of the Manchester Arena attack on Local Businesses

Appendix 6: Dave Scally evidence to Kerslake Enquiry Dave Scally of the National Football Museum has kindly allowed us to quote from his submission to the Kerslake Report.44 In it he stresses the importance of training courses and terrorism awareness and what training he received. It is a helpful response in order to provide background to some of the recommendations in the Executive Summary.

Dave sets out all the training programmes he and others went on to prepare for such an eventuality: I attended a Project Griffin course at the GMP headquarters in the Summer of 2015.

This was advertised by CityCo, the Manchester City centre management company.

Project Griffin is a terrorism awareness course for businesses, lasts around 4 hours, is free to attend and at the time was only delivered by the police at GMP headquarters.

After attending this course, I put together an hour-long terrorism awareness course for the staff at the museum. It included a general awareness of terrorist threats, but also general procedures on how the museum would respond to an attack.

These procedures, in basic terms, covered whether we would evacuate or invacuate depending on the nature of the incident. We also showed the ‘Run, Hide, Tell’ public information film...

The day after the terrorist attacks in Paris in November 2015, the local neighbourhood policing teams came to do a reassurance visit. They asked if we had plans in place to respond to an attack, and we said we did. They were quite surprised because most businesses they had visited said in the event of an attack, “the police would tell us what to do”. I got the impression we were in the minority by having basic responses in place to an attack.

In July 2016 I attended a Project Argus session. This was organised by CityCo and GMP. It went through the scenario of a vehicle IED attack in a public square, followed by a gun attack. This session taught businesses how a response to an attack would take shape. It was discussed that in that situation, the emergency services would not immediately respond until the area was safe. It was stressed that in an emergency, businesses like ourselves may have to treat “battlefield severity” injuries without professional help for up to an hour or more. The emergency services will likely be gathered at a muster point, awaiting to deploy only after the area had been confirmed as safe...

In August 2016 I attended a Project Sherman event at the Manchester Fire and Rescue Headquarters with a colleague of mine. We were sat on a table with representatives from Manchester Arena, Manchester Arndale, the Trafford Centre and Chetham’s School of Music. This was a table-top exercise/discussion based on a firearms attack at Manchester Arena. As each stage of the scenario was presented, our groups were allowed discussions on how we, as businesses, would react...

In November 2016, I attended a Project Griffin self-delivery course. This was so I could train our staff in-house in Project Griffin. The suggestion to attend this training was put forward by our dedicated CTSA from GMP...

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44 Dave Scally, National Football Museum. Three submissions to the Kerslake Review passed to TCC to use.

A case study on the Impact of the Manchester Arena attack on Local Businesses

A few days after the attack Dave delivered some Terrorism awareness training to others: I conducted a Project Griffin training course for some of our staff and café and restaurant staff from Hotel Football. This was held at Hotel Football next to Old Trafford. Project Griffin is a terrorism awareness course for businesses. It used to be delivered directly by the police, but in 2016 they trained businesses to deliver this in-house. I had been trained to deliver Project Griffin in-house in November 2016, but the was little appetite and resources for me to deliver it before now. However, that morning I delivered it to 40 staff. I later got special approval from the National Counter Terrorism Security Office to be able to deliver it to businesses around the National Football Museum, but I left the museum before I was able to get any training in place.

Dave recommends that there should be a statutory requirement for businesses to have plans for terrorist attacks in place: I don’t believe there was any way this could have been avoided, as far as Manchester, and specifically the Arena is concerned. However, I feel that businesses and people should be more prepared in how to respond to terrorist incidents. We plan for fires by having evacuation plans, doing regular fire drills and training staff. However, there is no requirement for businesses to have basic plans in place to respond to terrorist incidents.

The plans don’t need to be detailed. It just requires how to respond to gun attacks inside/outside, explosions inside/outside. Basic guidelines for staff and employees to follow. In our building our plan was to stay inside, which we did. Our staff knew the reasons why and didn’t question it. Just preparing people on how to respond could save lives in the future. I firmly believe the government should implement a statutory requirement for businesses to have plans for terrorist attacks in place.

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