| With the recent kidnapping of an American ship | | | | thriving, corrupt business that is more common than |
| captain by pirates off the Somali Coast, viewers are | | | | companies would like to admit. Even statistics are |
| wondering, how could this happen? The reality is that it | | | | difficult to gather because only about 10 percent of |
| occurs more often than you think. | | | | incidents are reported on average. |
| Expatriates working overseas on behalf of a | | | | Although the United States government recently |
| company or organization are frequent targets of | | | | intervened in negotiations to rescue an American ship |
| kidnap, particularly as globalization takes business to | | | | captain kidnapped by Somali pirates, governments are |
| new corners of the world. Thousands of kidnapping | | | | rarely involved in these cases. Without the leverage of |
| cases occur worldwide every year and as current | | | | a powerful government and military, insurance |
| events show, this number is only growing. | | | | becomes increasingly important to an organization's |
| As many have noticed, there is currently an intense | | | | ability to independently and expeditiously resolve kidnap |
| focus on Africa and the region surrounding the Gulf of | | | | and ransom situations. |
| Aden due to the recent increase in piracy and | | | | Companies often avoid discussing kidnap and ransom |
| kidnapping, but this is certainly not a new problem. | | | | coverage (K&R) because they do not want to |
| The International Maritime Bureau reports that in 2008, | | | | publicly highlight the risk and therefore, their viability as |
| Somali pirates seized 815 crew members, proving that | | | | potential targets. Despite its minimal exposure, many |
| the latest kidnapping was not an isolated case. The | | | | organizations that operate in high-risk countries and |
| threat has long existed and incidences are increasing in | | | | send executives overseas carry kidnapping and |
| many countries, including Afghanistan, Mexico, Pakistan, | | | | ransom insurance. However, companies rarely discuss |
| the Philippines and Venezuela. | | | | it unless asked and most employees would not know |
| An Italian expatriate was abducted on April 9 in the | | | | to inquire in the first place, unaware that this type of |
| southeastern Nigerian state of Ebonyi. Armed gunmen | | | | coverage is even available. |
| seized the man on his way to a construction site | | | | There are compelling economic and ethical reasons for |
| where he was working under government contract. | | | | companies to invest in kidnap, ransom and extortion |
| Although less publicized, hundreds of expatriates and | | | | insurance since ransom demands can be staggering, |
| Nigerian workers have been victims of kidnap in just | | | | particularly in the struggling global economy, with more |
| the past three years. According to the 2008 Kidnap | | | | than 14 countries recording cases of $25,000,000 or |
| Risk Brief published by Clayton Consultants, Inc., at | | | | more in recent years. Cases are usually settled for |
| least 172 foreigners were kidnapped in Nigeria alone in | | | | between 10 and 20 percent of the demand, but in |
| 2007. | | | | certain territories they refuse to negotiate and resort |
| The risk level for kidnapping remains high in Latin | | | | to excessive violence until it is met. |
| America and Africa, but Central Asia is seeing | | | | Most policies cover the ransom paid connected with a |
| dramatic growth, particularly in Afghanistan and Iraq. | | | | kidnap or threat, hijack, wrongful detention, death or |
| However, the majority of kidnapping incidents are still | | | | dismemberment, legal liability, crisis management team |
| occurring in Latin America. In most cases, the ransom | | | | expenses, and fees incurred while using an |
| is paid and the victim is safely released, but according | | | | independent negotiator or public relations consultant. |
| to The Inkerman Kidnap and Ransom Monthly Review | | | | This coverage helps mitigate the financial and human |
| (February - March 2009), kidnap victims killed showed | | | | costs associated with K&R by providing |
| a 7 percent increase in January 2009, up to 19.3 | | | | necessary services to ensure a safe, speedy and |
| percent. | | | | satisfactory resolution. |
| Expatriates working abroad face a credible risk in | | | | Companies cannot afford to deny the threat that |
| high-risk areas away from home where their | | | | K&R poses to their operations and employees. |
| companies cannot protect them. Organizations and | | | | From an insurance perspective, it is imperative that |
| financial institutions with a significant global presence | | | | they put mechanisms in place to safeguard against |
| can be targeted for ransoms ranging from thousands | | | | these risks, particularly as we work to grow and |
| to millions of dollars. While it may seem rare, kidnap is a | | | | stabilize the global economy. |