The essence of the insurance business is to help mitigate risk and prevent disasters from happening, but the planning for such events too often looks backward rather than forward, former Secretary of Homeland Security Michael Chertoff said.

“My business at the Department of Homeland Security was risk management,” said Mr. Chertoff, addressing risk managers and other industry executives Tuesday at the Property Casualty Insurers Association of America's annual meeting in Boston.

Mr. Chertoff was the second secretary of Homeland Security, serving under President George W. Bush from Feb. 15, 2005, until Jan. 21, 2009. He was preceded by Tom Ridge and succeeded by Janet Napolitano. Mr. Chertoff also served as a judge of the 3rd U.S. Circuit Court of Appeals from June 10, 2003, until Feb. 15, 2005.

“We have a tendency to outweigh risks which have occurred rather than those which haven't,” Mr. Chertoff said. “The lesson is that proper risk management before (an event) is much more important than the ability to pay claims and take care of people after.”

After the terrorist attacks of Sept. 11, 2001, the U.S. built capabilities aimed at preventing another such event, although this process has generated debate on priorities. “You could argue that we have over-invested in some areas, but we don't kid ourselves that the risk doesn't exist,” the co-founder of The Chertoff Group said.

Although substantial progress has been made fighting terrorism and deterring attacks, Mr. Chertoff said that the effort must be continual. “We shouldn't kid ourselves. The enemy is adaptable as well,” he said.

Terrorism has experienced a shift in tactics away from large sensational events requiring extensive planning to smaller scale events such as the Boston Marathon bombing on April 15. Such smaller attacks, Mr. Chertoff said, are much harder to detect.

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“The new face of terrorism is lower-tech and more widely distributed, and thus harder to interdict,” said Mr. Chertoff, adding that risk management practices are being adapted to the new strategies used by terrorists.

Among emerging threats, Mr. Chertoff cited cyber terrorism as being in the forefront. Steps must be taken, he said, to establish standards for intelligence and information sharing as well as other parameters, such as liability.

He again stressed the importance of being in front of a threat and the perils of not being proactive.

“If there is a big cyber event, there will be standards imposed, possibly by a jury box,” Mr. Chertoff said.

He also cited the increasing threat posed by the expansion of communications technologies.

“The more we go to the Internet for things, we create access point for terrorists and criminals,” he said.