Pool Re, the government-backed terrorism insurance lifeboat, today warned 2018 "may herald a far more complex and dangerous period" for democracies fighting extremism.
During 2017, there was a "step change" in the way Islamist and Far Right groups conducted themselves, it said.
Last year was likely a "tipping point" for Daesh and Al Qaeda, with the two parties exploring a merger as they lose territorial strongholds, Pool Re's Terrorism Frequency quarterly report found.
2017 saw five attacks in the UK, causing 36 deaths and over 300 injuries. A further 10 attacks were thwarted by British security services. Over 300,000 items of terrorist-related material have been removed from the internet since 2010; up from 250,000 in December 2016.
Pool Re head of risk analysis Ed Butler said:
In future, these threats are unlikely to reduce, with Islamist extremism being the main driver. More attacks should be expected in the UK in 2018 and these are likely to be focused against crowded places, particularly those linked to the transport sector, the military, police and politicians.
"The attackers are likely to claim inspiration from Daesh or Al Qaeda while having minimal, if any, links to the group’s leadership. Off the shelf technologies and combined methodologies, including the use of more powerful home-made and commercially available explosives and IEDs [improvised explosive devices], is likely to increase in 2018."
He added: "The UK’s counter-terrorism agencies continue to work at capacity to detect and disrupt further plots and attacks."
Pool Re was set up by the government in 1993 in the wake of a spate of terrorist attacks hitting buildings in particular. It was set up to provide insurers with the critical reinsurance required for them to operate.
The lifeboat and the insurance sector has been criticised for not providing sufficient cover as terrorists evolve from simply structural damage to more direct attacks on individuals, such as during the London Bridge atrocity.
Pool Re has previously said it had warned the government of this gap. From April it will extend its cover for material damage and direct business interruption caused by acts of terrorism following a cyber attack.