New Delhi: Kidnapping for ransom is a nightmare for many in North East but it has become a blooming business for the insurance companies and for the big corporates who are not taking any chances for their top executives working or visiting the vulnerable region.
India is second in terms of kidnapping for ransom in entire Asia Pacific region and North East India is one of the hot spots. So much so the region has come at par with the African and Middle East countries by the insurers, insurance sources said.
Policy sum insured in this kind of cover ranges from one crore to about Rs 50 crore depending upon the size of company, risk exposure and employee strength. Industry sources say purpose of the policy is to ensure safe release of the person who has been kidnapped and covers kidnap crisis management, ransom payment, loss of ransom in transit among others.
Domestic corporates, whose employees travel to high risk areas either within the country like the northern belt, some parts of the north east and sections in the southern India, or globally like Latin America, Nigeria, Afghanistan and Iran, are increasingly buying Kidnap & Ransom Extortion (KRE) insurance, the sources said.
India being among top countries for kidnapping, the demand for this insurance is increasing slowly.
The company’s policy provides cover for ransom money, expense, consultant cost and judgments, settlements and defence costs.
It has been observed that the most vulnerable companies under KRE are the ones who have their employees travelling overseas for responsibilities, firms with high profiles, organizations that handle sensitive information/technology or the ones who handle high amount of cash.
At the very base of the policy is the skill of the consultant who helps the insured negotiates for the release of the kidnapped individuals.
These consultants have a global presence and respond to such situations of crisis at any time.
According to a report released by the risk consultancy firm Control Risks, India is the second highest in terms of kidnapping for ransom in the Asia Pacific region. Of the total incidents reported from the across the world, the Asian Pacific Region alone contributed 35 per cent of the total kidnappings, reveals Ideal Insurance Brokers.
In most cases, the premium of the KRE coverage depends upon the country of operation/residence, type of industry, revenue of the insured company and travel patterns of the employees.
This would always be a very small segment of the market and can never be sold as a large scale product.
Given the sensitive nature of the product, the details of the policies are shared only with a selected group of people.
Some clients buy policies to cover specific trips to the high risk areas, say for a construction project in such areas and others may buy policies for all employees for all their exposures in India and worldwide.