India Ranks Second On The List Of Kidnapping Hotspots In The World, Ahead Of Pakistan, Iraq And Nigeria!
India ranks second only to Mexico on a list of kidnapping hotspots. The ranking is published by Control Risk a UK-headquartered consultancy based on reports of abductions. High net worth individuals senior corporate officials and children are being targeted.
For specialty underwriters sitting in global reinsurance markets like London, India has a dubious distinction. It ranks second only to Mexico on a list of kidnapping hotspots¡ªahead of Pakistan, Iraq and Nigeria. The ranking is published by Control Risk, a UK-headquartered consultancy, based on reports of abductions, and is referred to by international reinsurers for providing 'kidnap and ransom' cover to both Indian and MNCs.
Insurers say this does not mean that neighbouring countries like Afghanistan or Pakistan are any safer. What it indicates is that the number of complaints about kidnapping is higher in India. Although it may not be an organised business the way it is in some South American countries, there are many incidents that take place in the North and the East. Small wonder that India is now seen as a ripe market for selling K & R (Kidnap and Ransom) insurance policies.
"The rankings are based not on insured events but on actual cases reported. India stands out because of the sheer numbers and the vast spread of the population in remote areas," according to Sanjay Radhakrishnan, CEO of JLT Independent Insurance Brokers, the Indian arm of UK's JLT Group which has been arranging K&R cover for corporates for 25 years. M Ravichandran, president of Tata AIG General Insurance, told TOI, "India ranks high when it comes to kidnapping. High net worth individuals, senior corporate officials and children are being targeted. In the last two years, inquiries for KRE ( (Kidnap and Ransom Extortion) policies have seen a rising trend."
K G Krishnamoorthy Rao, MD & CEO of Future Generali India Insurance Company, confirmed the growing interest in K&R cover, saying, "There has been an increase of 25-30%."
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The main driver for corporates to buy this cover seems to be the response consultancy that insurers provide in hostage situations. "In K&R cover, a major role is played by response consultants who work globally in conjunction with enforcement and other authorities. The primary objective of the policy is to save lives," said Radhakrishnan. These consultants are mostly from law enforcement backgrounds and are skilled negotiators who focus on the safety of the victim while coordinating with the authorities.
"It's possible to get a $1 million K&R cover for a premium of $5,000 depending on the profile of the client, region and other terms and conditions of the policy," Radhakrishnan added. According to Rao, premiums have been falling steadily over the years mainly because the market has not seen many claims, "Going forward, if more people take this cover and the claims scenario does not change much, premiums may remain at the same level. However, if we witness a surge in claims, the rates can definitely go up."
"Confidentiality is the key to K&R covers. In most policies the cover ceases if a company divulges that its employees are covered," said Radhakrishnan. The confidentiality clause is included to reduce moral hazard. This is because most of the time the covers include not just officials but their families and employees. The strategy of kidnappers in most cases is to abduct employees like drivers or maids since they are soft targets and kidnappers can then place their demands with bosses.
(Originally published in The Times of India)