Canadian Underwriter

Pricing for kidnap and ransom on the rise: Willis

July 1, 2004   by Canadian Underwriter

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In its latest market commentary, broker Willis notes the rising interest in kidnap and ransom (K&R) coverage in light of the high-profile abductions taking place in the Middle East. The televised kidnappings in the conflict zones of Iraq, Afghanistan and Saudi Arabia are being followed by incidents in Indonesia, the Philippines, North Africa and more.
K&R coverage is “increasingly expensive but still readily obtainable”, Willis says, and carriers are asking for extremely detailed information from their clients including down to the level of individual employee travel plans.
But commercial organizations must consider the additional services provided by many K&R writers. These extend far beyond financial coverage of ransom, and may include hiring of incident response companies, business interruption coverage, coverage for suits brought against the company by family members of kidnap victims, and training in kidnap avoidance techniques.
Specifically, Willis says buyers should investigate thoroughly the incident response team used by their carrier. For example, a company trained to deal with K&R in Latin America which still sees the highest incidence of kidnappings may not have the expertise to handle K&R incidents in the Middle East. “”The same stringent and thorough due diligence processes that an entity applies to mergers and acquisitions and other business practices must be brought to this selection process.”

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