Kidnapping Insurance for traveling abroad

This article was initially queued for December however, the recent headlines have moved it forward. I am glad my past organizations had K&R insurance in place.  I am even more thankful that some of previous business owners I worked with had the foresight to put these policies in place for all company personnel worldwide and not just as an executive perk. 

K&R insurance provides a combination of financial indemnification and expert crisis management.   The premiums are based on a variety of variables: geography, travels, past ransom incidents.  Most coverage can be purchased for <$600/year.  Most kidnappings are not reported publicly so data is rare.  90% of cases are not reported.  Kidnapping is a well organized crime enterprise.  Lloyd’s of London compiled statistics organized enterprise.  The latest data I could find was 1992-2002:

• 77% occurred in Latin America
• 15% occurred in Asia
• 3% occurred in Europe
• 2% occurred in North America

Since that time there has been a rise in kidnappings in Iraq, Afghanistan and Africa as armed conflict has risen there.

Kidnap outcomes:

• 67% there is a ransom paid
• 15% the captives are released without payment
• 9% are killed
• 7% are rescued
• 2% of the captives escape

Corporations have become a bigger target of kidnappers than celebrities and political figures.  Companies are perceived as having deeper pockets than individuals.  Paying a ransom is solving the problem after it has occurred.  There is still the support for the victim’s family, management disruption and stress that occurs after the kidnapping fact.  A fuller risk management approach would be preventive and include:

• Appropriate security training to employees and family members
• Appropriate security measures are in place
• Risk assessments of individual geographic areas

The existence of K&R insurance is an employee benefit, however, knowledge of the existence of such policies should be on a need to know basis only.  It should not be discussed externally as it increases the probability of a kidnapping incident and may be cause for coverage termination.  My research indicates that AIG, Chubb and Travelers Group are prominent insurers offering this type of coverage.  Consider K&R insurance as a cost of doing business abroad.  You may want to refer to the post below:
http://www.olivegroup.com/contents.php?contid=191

​I do not pretend to be an insurance expert, I do pretend to be an expert on international business development topics so please contact me in that vein.  Have a great Thanksgiving!
 

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