Industry News

iTOO Special Risks: Kidnap and Ransom Experts with Stephen Mc Gown

Stephen Mc Gown was kidnapped by Al Qaeda and held hostage in the desert in Mali for nearly 6 years. Can you imagine what he went through, can you imagine the impact on his wife and family. Stephen shared his personal story with iTOO and brokers in partnership with the Insurance Institute of Gauteng. The most practical insurance insight that Stephen shared is that he obviously did not have kidnap and ransom insurance, so his family did not have access to a professional consultant to assist with locating him; hostage negotiations; liaising with government, law enforcement authorities and media. This is one of the most important benefits of K&R insurance – unlimited access to an expert consultant in the time of a crisis.

Stephen’s story was also very touching and relevant to South Africa right now and the audience took many life lessons from his talk. “It is all about your attitude, when things are tough, you have to work hard to push through it and things will get better,” said Stephen.

iTOO Special Risks is a niche insurer writing many specialty classes of risk with kidnap and ransom insurance or K&R as it is commonly known being one area of iTOO’s expertise.

Justin Naylor, Managing Director of iTOO says that the nature of kidnap and ransom insurance is rather secretive and confidential – you certainly wouldn’t advertise that you have kidnap and ransom insurance and many cases also go unreported, so this makes it difficult to get accurate statistics.

However, Naylor says there are estimated to be approximately 10 000 kidnappings per year globally and total ransom payments can exceed $1 billion per year across the world – kidnapping for ransom is big business for criminal syndicates. Some of the higher risk countries include Nigeria, Mexico, India, Pakistan, Cameroon and Kenya.

iTOO partners with Unity Advisory Group as it’s expert consultants and this enables iTOO to provide in-country crisis response for kidnap related scenarios anywhere in the world with local negotiators who understand how to operate on the ground.

Unity advisory Group has registered 137 kidnappings in Africa in the past quarter with Nigeria being the highest risk area with 78 kidnap incidents and South Africa registering 8 kidnap scenarios this quarter. Unity has local African based consultants and together with iTOO they provide expert solutions tailored for the African continent.

There are many different motivations for kidnapping and extortion and these may include political and business disputes; sexual abuse, child abduction, but by far the biggest motivation for kidnapping is for ransom payments by criminal syndicates – it is pure business in about 70% of kidnappings.

Justin Naylor says “iTOO is known for being experts in specialty risks and this is achieved by ensuring that we have the best people focusing on what they know best.” iTOO’ s K&R underwriter is Catia Folgore who has more than 15 years of experience in global crisis insurance.

Catia Folgore says “the biggest misconception about K&R insurance is that it covers only kidnap and ransom, when in fact it covers a lot more than this.” iTOO ’s K&R product covers many different insured events including kidnap and ransom, extortion, hijacking, work place violence, detention, home invasion and political or environmental evacuation.

So, who should buy kidnap and ransom Insurance?

Justin Naylor says that brokers should offer this cover to a wide variety of clients.

Firstly, high net worth individuals are a target if they are wealthy, publicly profiled, directors of listed companies or travelling into Africa and high-risk areas. Kidnap and Ransom can be bought on a standalone basis by individuals and can be packaged with other iTOO products.

Secondly, corporate clients are the main buyers of K&R if they are expanding into Africa, large companies with high global profiles, working with challenging labour relations or if they conduct work that may be sensitive to some communities. These companies should take out K&R cover and iTOO provides cover to many sectors of business such as mining, banking, telecoms, oil and gas, construction, hotels, casinos and NGOs.