A global economy offers enormously rich rewards, along with many disturbing and dangerous risks. Although accurate statistics are difficult to come by, roughly 12,500 to 25,000 kidnappings take place every year worldwide. And many say the trend toward kidnapping for ransom is growing.
Some kidnapping experts say a mere 11 percent of kidnapping victims are freed without a ransom. But, when a ransom is paid, about 40 percent of those kidnapped return home unharmed.
Worse, no one is sure whether all kidnappings are even reported. If a kidnapper threatens to harm the kidnapped if colleagues or family go to the police, some victims may seek to pay the claim and keep the event hush-hush. Without accurate reporting, many business travelers could be lulled into a phony sense of security, which could explain why so many potential victims ignore safety warnings, particularly about traveling in well-known international kidnapping and ransom hot spots. And while anyone traveling in high-risk areas is a potential victim, high visibility celebrities, athletes and corporate executives can be prime targets.
Despite the risks, consultants say it's often difficult to convince entrepreneurs that they need to take those risks seriously, particularly when their minds are focused on the objective of their travel, whether it's opening a new plant, acquiring a new business unit or closing a deal.
Look at it this way. Corporate executives and entrepreneurs are experienced risk takers who aren't easily bothered by anything negative. Therefore, they are often less likely to view themselves as vulnerable. Incredibly optimistic, they tend to see themselves as invincible. It's not that they throw caution to the wind, but that they believe themselves to be exempt from harm in general. The truth is executives need to ensure they are safe.
Start by looking at kidnapping hot spots that deserve special attention. Although Latin America has only 8 percent of the world's population, there has been a 66 percent increase in kidnapping for ransom there. After a 10-year decline, kidnappings are again on the rise in Columbia. Unfortunately, incidents in other South American nations are also increasing. Nearer to home, kidnappings in Mexico are a huge growth business especially near the U.S. border. Estimates range from 8,000 to 12,500 a year.
Griffin Underwriting, Ltd. in Guernsey, U.K., indicates that kidnappings in Mexico jumped 317 percent in the last five years. Though that figure could represent the tip of the iceberg, given that as many as 75 percent of all cases go unreported. It's also worth noting that victims aren't just wealthy executives. Thousands are said to involve employees with salaries from $2,400 to $6,500 per month who are also held for ransom.
Phoenix, Arizona has become the kidnapping capital of America, with more incidents than any other city in the world outside of Mexico City, according to a spokesperson for Griffin Underwriting. Kidnappings in Phoenix are estimated to have topped out at 200 in 2010. And, because of its proximity to Tijuana, the danger in Southern California may be escalating.
War zones of course are extremely dangerous, particularly Iraq and Afghanistan, as well as nearby Pakistan and Yemen, where commandeering ships and their crews for ransom is legendary. But kidnappings can and do occur, in just about every region of the world, including Africa where they often involve humanitarian workers. To highlight the potential for danger, assume that anywhere where there is political and social unrest, the possibility of becoming a kidnap victim is present. Given such serious conditions, here are guidelines that can help avoid becoming a kidnapping victim. They apply to anyone traveling or working outside the U.S., but they are particularly relevant to corporate executives and other high profile individuals:
Perform a risk review before traveling. The goal for such a plan is to raise awareness and to become sensitive to the potential dangers on your itinerary. Because the U.S. is not a hot spot, many travelers tend to feel kidnapping is not a critical issue for them, no matter where they may be traveling.
Become familiar with the hot spots. Although some locations have long qualified for the hot spot list, new ones can appear overnight. However, it's important to remember that kidnappings can occur anywhere.
Take precautions. To help avoid being abducted (just the sound of the word is more than a little sobering), move about in well-lit areas and never go anywhere alone. Always travel with those you trust. In the same way, stay in close contact with your host and don't deviate from the destination itinerary without clearing it with your host, since this person knows the territory and what can happen.
Limit access to your travel plans to a trusted few. If you don't know someone well, don't let it be known where you are traveling or even that you're planning a trip. You can never know who is listening. Kidnapping is a business in many parts of the world and the perpetrators are organized and they can and often do gather intelligence on possible victims.
Although Americans grow up having implicit trust in the police, in many locales going to the police can be a major mistake, since they may be corrupt and party to abductions.
Kidnap & Ransom insurance is another step to take when traveling to locations where U.S. companies have expatriates employed or destinations where corporate executives and celebrities are visiting.
While there are insurance policies that provide reimbursement, there are other considerations that deserve an equal amount of attention. For example, credible Kidnap and Ransom insurance policies cover unlimited expenses for the services of experienced crisis management teams, which include highly skilled professionals such as former CIA and Secret agents and ex-Military Police personnel. Its purpose is to negotiate the safe release of kidnap victims. If a ransom is required, they are skilled at negotiating as little payout as possible, with safety as the top priority. Anyone buying Kidnap & Ransom insurance should keep the purchase strictly confidential, potential kidnappers may view such insurance as a source of ransom funds. Since Kidnap & Ransom insurance is typically purchased from Property & Casualty insurance brokers, they must have adequate information to make sure the coverage is appropriate.
Here are examples of the information necessary to properly underwrite a policy:
- What's the person's travel plans over the coming 12 months? This helps determine patterns and possible exposures.
- How does the individual typically go about developing new business? Since many top executives, for example, are so keenly focused on the goal of their travel, it's important to understand what that entails.
- How familiar are travelers with their destinations and how well are they known in those locations, particularly the hot spots?
Such information is not only helpful in the underwriting process, but for a crisis management team, as well.
It's also worth pointing out that the cost of Kidnap & Ransom insurance is modest. For example, a $5 million dollar policy for one year with non-hazardous travel that includes the services of a crisis management team is about $2,000.
If travel is to high-risk areas, such as Columbia, Venezuela, and certain other South American countries, there are additional premium costs. Coverage is available for individuals and their family members, as well as corporations and their employees.
The possibility of a kidnapping is one of the bigger challenges faced by a growing number of U.S. travelers, whether vacationing or on business. If the current pattern persists, we can expect that there will be more kidnap victims and payouts in the years ahead, even though many of these incidents never make the news.
Frank Zuccarello is executive vice president and a partner of Exceptional Risk Advisors, LLC, where he manages the field underwriting, sales and operations for its Accident & Health Division. He underwrites and places Kidnap and Ransom policies for corporate executives, as well as a long list of high profile entertainers. Based in Mahwah, NJ, the company specializes in serving corporate executives, international celebrities, and athletes through its relationship with Lloyd's of London. Call him at (866) 512-0444 or frank.zuccarello@exceptionalriskadvisors.com.
Current Issue - April 2024