Kidnap and ransom insurance is written primarily for today's corporate world to protect against the potential loss of executives and key personnel on a worldwide basis. There is no standardization of rates when it comes to this type of insurance.
Most kidnaps are carried out in order to obtain a ransom, and in most cases a ransom is paid. Rescues are rare, largely because the authorities in most countries recognize that the safety of the victim is paramount. The average percentage of deaths following a kidnap is 9%. In cases involving control risks, less than 2% of people are killed. Most killings usually take place at the time of abduction rather than during the negotiation of ransom. It is estimated that over the past 6 years, kidnappings around the world have increased by 100%.
Demands can be huge, with more than 14 countries recording cases of $25 million or more in ransoms in recent years. Kidnappers usually settle at between 10 and 20 percent of the demand.
While most ransom payments are kept confidential, insurance companies are aware of the substantial sums that have been paid. Latin America leads the list, but many of the largest settlements have been made in Europe. There has been a noticeable increase in average ransom payments in recent years.
What are the risks?
Corporate and personal security has improved dramatically. However, the use of kidnapping or extortion to gain access to industrial secrets, to make socio-political statements, or for monetary purposes, continues to rise.
Talk to us here at Los Gatos Insurance Center and we'll be able to help you determine if this is the right insurance for you.