Baghdad Activity Boosts Ransom Insurance Demand

NU Online News Service, Dec.16, 1:59 p.m.EST?Demand and prices for ransominsurance are rising, driven by soaring incidents of kidnapactivity in Baghdad and South America that have extracted paymentsas high as $77 million, a major London brokerage firmreported.[@@]

The broker, JLT Risk Solutions, said there has also been anincrease in quickie kidnaps to extract cash at bank machines.

JLT said the increasing incidence of this crime has driven upthe cost of ransom insurance in the past year. The firm saidBaghdad, for example, has joined Bogota, Colombia among thelocations in the kidnap-for-ransom equation.

Melanie Simpson, a specialist broker in kidnap-for-ransom atJLT, said the main purchasers of the coverage are corporations andindividuals (whether expatriates living and working in hostileareas, wealthy local families or business travellers).

JLT also reported there has been an increase in "express kidnap"in some countries?when individuals are abducted for a short period,taken to an ATM and forced to withdraw cash and sometimes robbed oftheir possessions and official documents.

"The events of Sept. 11 two years ago focused the minds of manycompanies on the security of their personnel," said Ms. Simpson."The situation in many countries has continued to deteriorate atthe same time as a generally heightened worsening of the worldterrorism situation."

In its report on kidnap for ransom, extortion and detentioncoverage, JLT said that Latin America continues as the globalhotbed for this crime. Colombia remains at the top of the list,with Mexico, Brazil, Venezuela and Ecuador all flagged up ashigh-risk countries.

The economic crisis in Argentina has also brought a dramaticincrease in reported cases, while in Peru there is a resurgence ofkidnap for ransom. The report comments on some of the kidnap gangsoperating in selected "hot spot" countries, JLT said.

The company also found a significant threat to employees,locals, travelers and tourists in parts of the Asia Pacific region,the former Soviet Union, Africa, the Middle East, Eastern Europe,India and Pakistan. It said incidents are also on the increase inIraq. where 100,000 prisoners were released by Saddam Hussein priorto the U.S. invasion.

According to JLT, Iraq in the past had not experienced a greatproportion of kidnap incidents. "However, Paul Bremer, the top U.S.official in Iraq, has acknowledged that the crime is becoming aformidable problem," the report said.

The brokerage noted that said it had seen official statisticsshowing there were at least 40 kidnappings in Baghdad from June toAugust this year.

"It is difficult to accurately gauge the true number of kidnapcases in each country, as so many go unreported for variousreasons?sometimes fear of reprisals, or local police corruption orinvolvement. Official statistics may only represent the tip of theiceberg and the true extent of the problem can be far greater thanit appears," the report said.

"It is true to say that most kidnaps are financially motivated,whether carried out by criminals or terrorists," the reportadded.

Some of the highest U.S. dollar ransoms paid since 1990 rangefrom $19.5 million to $77.5 million, reported JLT, which said thatvarious ransoms between these two figures have been paid in Europe,the Far East and Latin America.

The report, which also provides a guide to choosingkidnap-for-ransom insurance and how to select a professionallyqualified firm to assist with negotiations, may be obtained fromJLT Risk Solutions in London by telephoning 44 (0) 20 75284068.