The ACE International Advantage insurance program is designed to cover a variety of risks for employees working or traveling internationally with their primary insurance offering for expatriates traditionally being international workers compensation insurance.

Kidnap and Ransom insurance is now a standard part of the International Advantage Insurance plan offered by ACE USA.  The Advantage Package now includes $100,000 of automatic Kidnap and Extortion coverage at no additional charge.

The Kidnap and Ransom coverage includes kidnapping, property extortion, bodily injury extortion, product extortion, and information extortion.  A $100,000 kidnap benefit is included with options to increase the benefit up to $5,000,000 USD. 

KNR incidents are handled by Neil Young associates founded in 1990.  Like any good KnR insurance company, the consultant is an independent company.  Neil Young Associates is a premier global crisis consultant that provides information services and crisis response to clients, of which ACE USA is one.

Essentially, throwing in Kidnap and Ransom Insurance at no cost sounds great, but the standard benefit does have the following country exclusions:  

Kidnap and Ransom insurance in Afghanistan, Nepal and Pakistan 
Kidnap and Ransom insurance in Algeria, Sudan and Syria
Kidnap and Ransom insurance in Angola, Sierre Leone and Somalia 
Kidnap and Ransom insurance in Brazil, Saudi Arabia, and Philippines 
Kidnap and Ransom insurance in Chad, Liberia, and Libya 
Kidnap and Ransom insurance in Chechnya, Indonesia and Sri Lanka 
Kidnap and Ransom insurance in Colombia and Zimbabwe 
Kidnap and Ransom insurance in the Congo, Nigeria 
Kidnap and Ransom insurance in Cuba, Russia, and East Timor 
Kidnap and Ransom insurance in Georgia, Venezuala, and Yemen
Kidnap and Ransom insurance in Hatii, Mexico and Peru
Kidnap and Ransom insurance in Iraq, Iran, and North Korea

… all excluded

 All of these countries, which are more expensive and difficult for kidnap and ransom underwriting, can be written by ACE USA at the discretion of their underwriters and for additional premium on a case by case basis with some exceptions like North Korea for example (and other sanctioned countries).

The policy will cover extortion payments, legal fees and trauma counselling in the event of kidnap.

A few of the sectors that are at high risk in Uganda include NGOs (non-governmental organisations and non-profits), oil companies, and telecommunications.  The AIG product was already available in Kenya and South Africa, and AIG U.S. offers companies with expatriates global expatriate kidnap and ransom insurance policies.

With the discovery of oil in the country, in a region that has some pockets of instability, it was crucial to respond to these unique challenges.

Today’s business leaders are charged with breaking new markets and territories. This puts us face-to-face with new challenges such as having to work in politically-unstable regions of which are some of the best drivers for kidnap, ransom or extortion.

AIG works in collaboration with Clayton Consultants Inc., which specialises in the prevention and resolution of a kidnap for ransom, extortion, malicious product tampering and wrongful detention.

Clayton Consultants, a Triple Canopy company, is a crisis management security consultancy offering incident response, security consulting and training services to clients across the globe. Clayton specializes in the prevention and resolution of kidnaps-for-ransom, extortions, malicious product tampering and client risk.

Clayton consultants are experts in the field of crisis resolution with decades of government, military, foreign service and private industry experience. Strategically located around the world, Clayton’s consultants support clients in an advisory capacity based on their security expertise and an intimate knowledge of the local culture. Clayton, collectively has resolved more than 1,500 confirmed kidnap-for-ransom and extortion cases.

Triple Canopy, a security solutions company, acquired Clayton Consultants in 2007.

Mark Courtney, a consultant with Clayton Consultants, said the kidnap for ransom globally is worth $13,000,000,000 and only 50%of kidnappings are reported.  While kidnap cases are on the rise around the world, some can be prevented through security measures.

He noted that Africa is beginning to register a rise in kidnap cases to 17%, up from 5% seven years ago.

Although the ransom insurance is placed with certain Syndicates in the Lloyd’s market, Griffin-Underwriting uses Hart Security for the incident response and consulting services for clients.  As we discuss in many parts of the International Executive Security Monitor, a KnR program is only as good as the security expert that will be there “on the ground” in the event of an incident.  A $10,000,000 ransom benefit is essentially worthless without the proper consultant involved in the negotiation.

On arrival the HART Security Consultant will assist the family or business group and advise them on the most likely way in which the process of recovery will take place and how best to organize themselves. This activity takes place within the Crisis Management Team (CMT) that HART Security will help to establish.  The HART Security role is to support and advise the decision makers within the CMT, to allow them to follow a clear strategy and to avoid common mistakes in the negotiations. Their advice will always be in support of the objective – the safe return of the victim as quickly as possible.

Griffin has particular expertise in Maritime and Marine Kidnap and Ransom insurance and incident response and they provide a very informative PDF brochure on their maritime kidnap and ransom insurance as well as the tactics of Somali and other pirates and the maritime security measures that should be taken by each crew.  For example:

1. Liaising with naval vessels in high risk areas (letting them know you are there)
2. Having high pressure water hoses ready to go.  Many pirates in the past have been deterred with high pressure water believe it or not.
3. Fitting razor wire to the ship’s sides.  (pirate ships can be 30 to 50 feet below the deck)
4. Ensuring radio discipline so pirates cannot obtain information by monitoring channels
5. More is provided by contacting Griffin-Underwriting at info@griffin-underwriting.com   (or please contact McKinley International Risk Management to liaison with Griffin from North America)

Chubb still a quality provider

Chubb still maintains it’s reputation as being a first rate insurance company in the corporate  marketplace, and this also applies to the Chubb kidnap and ransom insurance offering.

Most good international kidnap and ransom insurance companies partner with an independent outside consulting / security company for services in case they are needed and Chubb partners with the Ackerman Group, which specializes in kidnap and extortion threats globally.  The Ackerman Group has a good solid reputation.  For being a Chubb client Chubb guarantees the services of the Ackerman Group.  Many K&R insurance policies may tout the services of a famous negotiator, but in a crisis may be able to use another firm swapping one out for another.  Read the fine print.

In addition to investigation and on the ground negotiation, Ackerman also provides Chubb with a proprietary service called Risk Net, an online database that provides threat profiles for the countries of interest to clients before they decide to travel to a country on business so they can make good decisions.

In addition to the “normal” kidnap and ransom insurance and extortion benefit, Chubb also offers clients a benefit called Cyber Extortion Coverage which can pay a benefit for a legitimate threat to destroy data such as a threat that a computer system will be hacked or hit with a virus if the company does not pay ransom money.  Chubb can offer policy limits up to $25,000,000 but policy limits of more than $1,000,000 are not typical and often unnecessary in most countries where kidnap and ransom is a threat.

For kidnap and ransom insurance this building is still Mecca

When it comes to Kidnap and Ransom insurance policies issued on a global basis, Lloyd’s of London is still the “insurance company” that writes the most policies worldwide.  When seeking kidnap and ransom insurance quotes from Lloyd’s by an American company, 95% of the people we speak to are not aware that Lloyd’s is not an insurance company at all, but an insurance market (called the London market) that is made up of a variety of “insurance companies” inside the market called Syndicates.  People often come to us for understanding the Lloyd’s of London market. 

The Lloyd’s market has over 60 of these Syndicates.  Not all of them write kidnap and ransom insurance but several of them do.  Syndicates act as mini insurance companies and they work together to accept and bind risk.  For large insurane risks, such as the insurance on the space shuttle cargo, many LLoyd’s Syndicates may be working together taking small pieces of a much larger risk much in the same way Insurance companies use reinsurance.