It’s amazing how many U.S. expatriates moving to the Middle East do so without spending time on the necessary due diligence regarding the safety of themselves and their families heading to Dubai, Jeddah, Jordan, and other areas in the Middle East.  Most large U.S. multinationals will have some sort of kidnap and ransom insurance policy for expatriates moving to the Middle East.  The irony is, the expatriates are not able to obtain any real tangible information about the kidnap and ransom insurance program that is provided to the expatriates by the multinational employer.  If the expatriates are made aware of the details of the kidnap and ransom insurance plan provided to expatriates in the Middle East, in most cases it will void the policy and cancel the kidnap and ransom insurance.

Benefit Managers with expatriates in the Middle East are advised to say the following to their expatriates regarding kidnap and ransom insurance policies for those expatriates heading to the Middle East.

“…Due to security concerns and the advice of our international insurance companies, security vendors and consulting companies we are not allowed to give you the details of the security measures we have taken to protect you and your family while living in the Middle East.  However, we can assure you the steps we have taken to provide for your security are above and beyond the best practices of those in our industry.”

Of course, expatriates heading to the Middle East, and worried about the kidnap and ransom insurance threat, and security in the region in general, should always be provided with an emergency number to call for ANY reason, if they feel they are being threatened in any way.

This 24 hour phone number for international security concerns would go to the international security consultant that would coordinate with the kidnap and ransom insurance company, or mobilize the resources necessary for a political evacuation or to combat extortion.

The FARC activities always puts Colombia in the top 10 worst for International Travel!

We are often asked to list the very worst countries for travel, not necessarily for kidnap and ransom insurance risk, but in general, encompassing all possible factors involving health, safety, and security.

Here is our list for 2009 for the highest risk for international travelers.

Haiti, Afghanistan, Iraq, Chechnya, Somalia, Congo, Yemen,
Nigeria, Philippines, Mexico / Brazil / Colombia (A three way tie.)

We all understand the general risks of traveling to Iraq and Afghanistan which goes beyond the need for kidnap and ransom insurance.  However, other countries on the list require more explanation.

It’s very unusual how bad  Haiti is, and continues to be from a traveler and tourist perspective.  The Dominican Republic, the other side of the island, is becoming a large tourist destination but Haiti can never seem to get it’s act together and ranks worst on our list this year.  From the U.S. Deptartment of State on Haiti:

Travel in Haiti can be dangerous and all visitors are urged to exercise vigilance and caution. In some cities and towns ordinary services such as water, electricity, police protection and government services are either very limited or unavailable. While a U.N. force has provided assistance to police  in Haiti since 2004, their presence does not guarantee absolute security for residents or visitors.

The U.S. mission in Haiti issues security related messages warning U.S. citizens of violent or unstable conditions and has been forced to suspend service to the public or close the Embassy because of security concerns.  These concerns have also prevented Embassy personnel from traveling to or through some areas. Since October 2004 Embassy personnel have been prohibited from entering central Port-au-Prince after dark due to security concerns. The Embassy has also imposed a curfew on its officers. As a result, the ability of Embassy officers to come to the aid of U.S. citizens in distress may be limited.  If situations occur where the Embassy must suspend operations or when officers are unable to travel freely, the Embassy will continue to be available by telephone to offer emergency services to U.S. citizens.

Incidents of violent demonstrations, looting, and transportation disruptions in Les Cayes and Port-au-Prince   resulted in several deaths.  In 2009 the Embassy issued several security related messages advising U.S. citizens to avoid downtown Port-au-Prince near the universities (Avenue Christophe, Rue Capois, and Avenue John Brown) when student demonstrators barricaded streets and threw rocks at passing cars, attracting a large police presence, which responded with tear gas and other forceful measures.  Demonstrations in Haiti often result in violence and require police intervention.  U.S. citizens are advised to avoid all demonstrations.   As a result of such civil unrest, U.S. citizens have been temporarily stranded in isolated locations and could not safely travel until calm was restored.  U.S. citizens are strongly advised to thoroughly consider the risks before traveling to Haiti and to take adequate precautions to ensure their safety if traveling to Haiti.

U.S. citizens in Haiti should avoid all large gatherings, as crowd behavior can be unpredictable. Visitors encountering roadblocks, demonstrations, or large crowds should remain calm and depart the area quickly and avoid confrontation. The Haitian National Police increased their visibility in 2009 and are gradually contributing to improving public security, especially in the metropolitan area of the capital,  However, assistance from Haitian authorities is often unavailable. U.S. citizens must be particularly cautious on days when there are political activities planned in Haiti. U.S. citizens are urged to take common-sense precautions and avoid any event where crowds may congregate.

Kidnap and ransom insurance is essential for anyone traveling to, or living in Haiti as an expatriate.

The Philippines is the land of 7,000 islands.   Some areas of this country are not recommended for traveling like North Cotabato, Mindanao, Zamboanga peninsula, Basilan, Tawi-Tawi and the Sulu archipelago. Apart from robberies and kidnappings there are other threats as well. Local people mix drugs in the drinks of the visitors which can make them unconscious in minutes. Some cases are reported where the tourists not only lose their wealth and also lose their body parts like kidneys.

We should mention Nigeria.  It is the most populous country of Africa. The people living here belong to over 200 different races which is the major cause of shaking economy. This country is also famous for its emails scams.  More than 220 oil workers have been kidnapped in this country and the issue had always been resolved by ransom money. According to reports, these foreign workers were working near the Niger Delta. The areas like Bakassi Peninsula, Bayelsa or the Delta are famous for kidnappings and habitat of armed gangs. There is high risk of getting infected by Malaria and AIDS/HIV. Travelers are also advised to be vaccinated against yellow fever before entering in the country.  Kidnap and ransom insurance is essential for anyone working or living, as a foreigner, in Nigeria especially if involved in the oil trade.

Do these four know the risks traveling in Kuwait? Is there an emergency security plan in place?

In our first blog in the “learning category” we will go over the basics of Kidnap and Ransom insurance (Kidnap and Ransom Insurance 101).  However just knowing what is in this post is enough to put your knowledge over about 80% of all others in the HR and insurance arena.  Not many have a good grasp of this important employee benefit.

Kidnap and Ransom insurance is offered by large insurance companies and Lloyd’s of London to insure global organizations and wealthy individuals and families.  The basic element is an kidnap “insurance benefit” that would be used to pay a kidnapper in the event of abduction and provide the ransom money to get the person back, but there is much more to this insurance benefit.  The other major parts of a good k&r insurance scheme is as follows:

1. Extortion Payment | demands following a specific written or verbal threat to injure, kill, or kidnap a person; damage property; contaminate products; divulge trade secrets; or destroy electronic data by computer virus.  Extortion is actually much more common than kidnap itself.
2. Wrongful Detention | Involuntary confinement by a government entity or insurgent organisation.
3. Hijack | Illegal holding under duress of a person while travelling on any aircraft, motor vehicle or water vessel.
4. Services of an independent international security company.  In the event of one of the incidents above, only a global security company will be able to mobilize individuals trained in international executive security and kidnap and ransom. 

An insurance benefit of several million dollars is really worthless without an excellent security company ready to intervene.

At this point, it's better he does not know

For employers that do have a kidnap and ransom insurance policy in place, there are requirements of the policy owners put in place by most good insurance companies like Lloyd’s of London.  The main requirement surrounds the secrecy of the policy, and exactly who in an organization can know about the existence of a kidnap and ransom insurance policy.

Good insurance companies will restrict access and knowledge to the K&R insurance policy to only a handful of individuals.  For example, if a company with expatriates puts a “flyer” in the expatriate assignment manual before each expat leaves for assignment saying “don’t forget you have $1,000,000 of kidnap and ransom insurance if you are ever abducted,” this would void most “real” kidnap insurance policies.

Although most people are not aware of this secrecy requirement, the reasons are rather obvious and are as follows:

1. The insured would become more of a target if it was public knowledge that a kidnap and ransom insurance policy was in existence.  Of course, this is more important for small to medium sized organizations.  Every potential terrorist or FARC-like organization in South America knows that companies like Exxon and Microsoft have K&R insurance, or have the ability to pay quickly.  Mega corporate employees are always targets.
2. If the abductors knew about the existence of a policy or even worse, the amount of insurance, there would be no ransom negotiation.  The kidnappers would know the exact kidnap lump sum benefit and request that exact amount with no negotiation possible.
3. The expatriate or travelling employee would immediately tell the kidnappers in the first 10 seconds of the abduction, “don’t harm me, my company can pay you $500,000 from our AIG Kidnap and Ransom insurance policy.”  As this may be good for the poor individual abducted, it would quickly have underwriters and insurance companies running for the exists and no longer accepting kidnap and ransom insurance risk.

In a large organization the knowledge of a K&R insurance plan may be limited to 5 or 56indivduals including the Director of International Human Resources, Director of Benefits, CFO, Treasurer, President, and one or two key assistants in those departments that see all emails and correspondence.

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.