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According to Praesidio Risk, the demand for kidnap and ransom insurance is escalating owing to the increasing threat of this crime, and growing awareness of product availability


The demand for kidnap and ransom insurance is escalating owing to the increasing threat of this crime, and growing awareness of product availability, says Andrew Munro, director of underwriting management agency Praesidio Risk Managers.

“Awareness of the dangers of kidnapping, hijacking, hostage crises and detentions has increased, and large scale events tend to make front page news. For businesses operating overseas in high risk environments this cover is seen as good corporate governance now,” explains Munro.

The ongoing case of South African hostage Pierre Korkie, currently being held for ransom of $3 million by Al-Qaeda in Yemen since May 2013, has once again inflamed fears of kidnapping danger for South Africans.

Deputy Minister of International Relations and Cooperation Ebrahim Ebrahim on Wednesday made a heartfelt plea to the kidnappers to release Korkie. On his return to South Africa, Ebrahim explained that there are currently eight other foreign hostages being held in Yemeni areas not under government control.

Munro explains that the negotiation procedure and particularly the first 24 hours of a case are fundamental to the outcome of the situation. “A quick payment to kidnappers with little or no negotiation structure may result in the victim not being released and the kidnappers demanding higher ransom or the kidnappers coming back in the knowledge that the victim’s family or employers are prepared to pay. Experts in this area have vast experience in dealing with these events and are fully equipped to deal with various types of cases,” he says.

When a client purchases kidnap and ransom cover they are provided with an emergency crisis response number to the insurers specialist response consultants. In an event, the client would call this line immediately at which time they would be provided with immediate telephone advice.

A ‘hand holder’ in country of event would be deployed to the client to assist the family or company for the first 24 hours. During this time a response consultant is making their way either to the country of incident, the company, or home, to begin or continue the negotiation procedure.

Because of the sensitive nature of kidnappings, and to avoid exploitation, response consultants do not communicate directly with kidnapping gangs to avoid suspicions of third party assistance. The negotiations would be done by a family member of a trusted member of the company, with the consultant providing advice on what to say and what not to say.

The ultimate aim is to achieve the safe and timely release of the victim while remaining within the law. These response consultants do not launch rescue missions as these more often result in the death or injury of individuals involved.

The policy is one of reimbursement, and ransom funds would need to be initially paid by the family or company. Cover could also include a number of additional services beyond ransom reimbursement and consultancy fees, such as post event care, family liaison, public relations liaison among other services.

Between 2006 and 2010, three of the leading crisis response consultancies responded to a combined total of 840 incidents in 77 countries around the world. Fifty-nine per cent of these were kidnaps, 37 per cent were extortions, and 4 per cent were piracy incidents.

Yemen is ranked sixth on Red24’s global list of kidnapping hotspots. “Yemen is expected to remain insecure and politically unstable in 2014, allowing non-state armed groups (tribes and Islamist militants) a space within which to coordinate abductions of foreign nationals and locals,” adds Red24.

The global kidnapping hotspots are: Mexico; Nigeria; the Sahel region (Mauritania, Mali, southern Algeria, southern Libya, and Niger); Pakistan; Afghanistan; Yemen; Syria; Somalia; Venezuela; and the Philippines.

Source: RiskSA