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August 4, 2015
India has been ranked second only to Mexico on a list of the world’s kidnapping hotspots-ahead of Pakistan, Iraq and Nigeria, published by Control Risks, a global risk consultancy specialising in political, integrity and security risk.
Insurers say this does not mean that neighbouring countries like Afghanistan or Pakistan are safer than India, reported the Times of India. The rankings are based not on insured events but on actual cases reported. What the rankings indicate is that the number of complaints about kidnapping is higher in India. Although abductions in India may not be an organized business the way they are in some South American countries, there are many incidents that take place in the North and the East of the country. India stands out because of the sheer numbers and the vast spread of the population in remote areas,” said Mr Sanjay Radhakrishnan, CEO of JLT Independent Insurance Brokers, the Indian arm of UK’s JLT Group which has been arranging K&R cover for corporations for 25 years.
Mr M Ravichandran, President–Insurance at TATA AIG General Insurance, told Times of India: “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.” Mr KG Krishnamoorthy Rao, Managing Director & CEO of Future Generali India Insurance Company, confirmed the growing interest in K&R cover, saying: “There has been an increase of 25-30%.” The main driver for corporations 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 Mr 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. .
“Confidentiality is the key to K&R covers. In most policies, the cover ceases if a company divulges that its employees are covered,” Mr Radhakrishnan said. The confidentiality clause is included to reduce moral hazard. Giving an idea of pricing, he said: “It’s possible to get a US$1-million K&R cover for a premium of US$5,000, depending on the profile of the client, region and other terms and conditions of the policy.” On Control Risks’s top 10 kidnapping hotspots in the world, four are in Asia. Apart from India, the Asian countries are Pakistan (ranked 3rd), Bangladesh (7th) and Afghanistan (8th).