Contents

Introduction

The Evolving Risk

Prevention

16

Managing an Event

18

Insuring the Risk

22

Scenarios

23

Further Contacts & Sources of Advice

24

Catlin Asset Protection

25

Catlin Group Limited is an international specialist property/casualty insurer and

reinsurer writing more than 30 classes of business worldwide through six
underwriting hubs. Gross premiums written in 2011 amounted to more than
US$4.5 billion.
Catlins operating hubs are located in London/UK, Bermuda, the United States, the
Asia-Pacific Region, Europe and Canada. These hubs allow Catlin to work more
closely with policyholders and their brokers and provide Catlin with expanded
product and geographic diversity. Altogether, Catlin operates more than 55 offices in
21 countries.
More information about Catlin Asset Protection can be found on page 25.
Catlin wishes to acknowledge Lee Coppack of Insurance Research & Publishing Ltd
for her assistance in the preparation of this guide.
October 2012

Catlin Group Limited

Introduction
Kidnap for ransom has continued unabated for centuries. It is a nasty
experience and can leave its victims and their families traumatised and
poorer. A kidnap also has the potential to impact a business by distracting
management from their normal duties and damaging corporate reputation.

My own experience goes back to the guerrilla

wars waged by pro-Marxist groups against
multiple governments in Central America in
1982. I arrived as a young idealistic man, fresh
from serving in the British Armys Parachute
Regiment. Kidnap for ransom was a favoured
way of raising funds for insurgency operations.

Peter Dobbs
Catlin Asset Protection
London

I started by helping families whose relatives had

been abducted and who received ransom
demands. The style of the negotiation was
predictable; modern communication did not
exist. This frequently resulted in an agonisingly
slow process of communicating through the
newspapers personal columns. The language
was cryptic. I might be told to say I had five
tractors for sale, meaning that the family was
offering $5 million. We would later respond by
saying that we only had parts of a tractor and
that they would all need to be in good condition
for any exchange. The victim invariably came
back, unharmed, within 90 to 120 days because
thats what the revolutionary manual stated was
the optimum holding time. We generally paid a
tiny fraction of the amount demanded.
Since then, electronic media has changed both
the pace and style of negotiation. Criminal
groups have largely replaced the guerrillas and
freedom fighters of the 80s. The problem has
spread globally. During all this time, I have never
once come across kidnappers who mentioned
insurance as a reason why a demand should be
paid. Kidnappers simply view what they have as
a commodity that can be traded. The weakness
of their argument is that they only have one
buyer. In the end, they almost always settle.
Nonetheless, the experience is traumatic.
I hope this booklet gives you some of the
insights that will enable you to plan for the
possibility that somewhere, sometime, someone
close to you may disappear.

Kidnap & Ransom Today

Kidnap & Ransom Today

Today, kidnapping for ransom is almost exclusively a criminal
activity with financial gain as its only objective. Political selfjustification does occur, but is more unusual than in the past.

One estimate suggests that, globally, ransom

payments could be worth US$500 million
annually, but an authoritative figure simply is not
possible when the total number of incidents is
open to great uncertainty. The vast majority of
kidnaps, perhaps 70 per cent, go unreported for
fear of reprisals or a lack of confidence in the
police.
In land-based kidnapping, compared with piracy
at sea, the ransom amounts are comparatively
small, but they can still stretch a family or small
company to the limit. Most demands are in the
thousands or tens of thousands of dollars. Only
a few cross the six-figure threshold, and still
fewer exceed US$1 million.
The ransom, however, is just one part of the
cost. There will be other expenses, increasing
as an incident continues. These can include
consultancy and legal fees, travel and hotel
expenses, interpreters, rewards and the victims
salary. They can add tens of thousands of
dollars to the total financial impact unless paid
by a kidnap and ransom (K&R) insurance policy.
A kidnap has the potential to cause serious
damage to a business by distracting
management from their normal duties. Damage
to company morale and reputation are also
potential consequences if an incident is not
handled well, especially if the victim does not
return safely.
Companies can find themselves facing legal
action by an employee or family. An American
aid worker abducted and held captive for 105
days in Darfur in 2010 sued the faith
organisation which sent her to the region on the
grounds that it failed to provide adequate
training and proper security personnel and that it
did not withdraw her when there was good
evidence she was at risk. The case is
2

understood to have settled for a significant

amount. The young woman then turned her
attention to the consultancy that negotiated her
release and started an action against it.
Most Western governments oppose the payment
of ransoms in principle, but they tend to take a
pragmatic view, especially when events are
unrolling away from home. The UK Government,
for example, strongly discourages the payment
of ransoms but does not currently make it illegal.
K&R insurance is now widely accepted as a
reasonable method of protecting not just wealthy
families and international business executives,
but aid workers, journalists, faith workers,
government contractors and others at risk. One
of the most valuable parts of a K&R policy is the
unlimited access it provides to emergency
response consultants whose skills and
experience have been confirmed by the insurer.
A kidnapping typology
Every year, there are hundreds of thousands of
abductions of all types. No one knows the
precise figures; there are too many variables
and much under-reporting. Many are between
two sets of criminals, so-called bad-on-bad
kidnaps. Experts working in the field put the
number of kidnaps for ransom or political gain at
around 40,000 a year.
Terrorist and criminal groups both use
kidnapping as a tactic to achieve their goals.
The difference between a criminal and a
terrorist group is sometimes negligible.
Australian government advice

Catlin Group Limited

The main categories of kidnap include:

Traditional kidnap for ransom. The

kidnappers pick up a victim and hold him or
her hostage pending payment of a ransom
by the family or employer. The most
common outcome 70 per cent of the
known incidents is that the victim is
released on payment of a ransom. Fewer
than 10 per cent are rescued and fewer
than 5 percent are killed. The rest are
released without payment or they escape.
In insider kidnappings criminals pay
domestic employees for keys and
information to have easier access to
children and other members of the family,
including the primary breadwinner.
Express kidnapping. A comparatively
recent phenomenon, express kidnapping is
essentially a prolonged robbery.
Kidnappers grab a victim and extort as
much money as possible as quickly as
possible. They may force the person to
withdraw their daily limit from an ATM, even
perhaps holding the victim overnight to get
more the next day. The kidnappers may
also take the victim home and demand that
he or she hands over cash and small
valuables in the house. In some parts of
Latin America, express kidnappings
involving crooked taxi drivers and their
confederates are known as a millionaire
tour (Paseo millonario).
Tiger kidnapping. Tiger kidnapping is so
called because it involves the predatory
stalking of the victim. Today, it is almost
synonymous with bank robbery. Criminals
take a targets family and coerce him or her
into providing access to a bank or money
processing facility. Bank managers and
staff are the most frequent victims, but
anyone with access to large amounts of

Kidnap & Ransom Today

cash could be a target. The first recorded

instances of tiger kidnapping took place in
Northern Ireland in the 1970s. It remains a
risk there, in the Irish Republic and in
Belgium, though incidents have also
occurred in the United States, France,
Brazil and Ivory Coast.
Political/terrorist kidnapping. The
principal motive of the kidnappers is to put
pressure on a government, perhaps for the
release of prisoners, but there is also likely
to be a demand for money or other
concessions. In remote regions tribal
groups may seize Westerners, such as oil
workers, non-governmental organisations
(NGOs) and journalists.
Extortion or virtual kidnapping. Criminals
pretend to hold a victim convincingly
enough that family members pay a ransom,
even though no kidnapping has actually
taken place. This type of crime plays on
peoples fears in countries where
kidnapping is common. Its often
orchestrated by incarcerated criminals.
Unlawful detention. This term covers
abductions that do not involve a ransom
demand, such as illegal arrests by
authorities and actions with political,
commercial or industrial motivation. There
are also hundreds of thousands of
abductions around the world each year for
custody disputes, forced marriages,
prostitution, slave labour and sexual
predation.

Kidnap & Ransom Today

Periods of detention for express kidnappings are

generally measured in hours. The detention in a
traditional kidnapping for ransom usually ranges
from a few weeks to several months. Very
extended detentions such as Colombian
presidential candidate Ingrid Betancourts 6
years at the hands of the Revolutionary Armed
Forces of Colombia (FARC) still occur, but
they are rarer than they once were.

Rate your risk

You live or work in an area of economic
deprivation, political instability, tribal
conflict or all three.
You travel to such areas, particularly to
remote parts of the country.
Policing in the area is weak, corrupt or
both.
There is a history of successful
abductions in the area.
You are conspicuously different from
the people around you by wealth,
appearance, celebrity, nationality
and/or faith.
You are from a local family regarded as
wealthy, especially if you have young
children.
You work for an international business
or foreign government, NGO or faith
group.
Your employer has not taken suitable
advice, created security plans and
procedures or briefed you properly.
You find security procedures irksome
and take chances.
You drive a prestige car.
The more factors ticked, the higher the risk.

(continued)

Victims
Traditionally, the great majority of victims of
kidnapping for money were wealthy local
families, especially their children.
Globally, everyone sees how the rich are
living.
Peter Dobbs, Catlin
As high-profile and wealthy individuals have
become more security-conscious, kidnappers in
countries like Mexico, Nigeria, India and
Pakistan have turned their attention to more
accessible victims, including ordinary workers,
local merchants, mid-level managers,
professional people and government employees.
Such local residents remain the favoured target
of kidnappers and extortion gangs throughout
the world. They are more numerous and less
well protected. Their abduction tends to receive
less police attention, and ransom payments, if
smaller, are usually faster.
Foreign nationals are not immune from threat,
however. In the past year, there have been
several actual and attempted abductions of
foreign citizens throughout the world, including
oil company workers and contractors,
journalists, aid workers, missionaries and foreign
business personnel.
Nationals from countries such as India, Pakistan
and China are abducted in comparatively high
numbers because of their presence as workers
in high-risk areas of the world, often with little
security around them.

Catlin Group Limited

Kidnap victims by occupation 2006-2011

Professionals and business personnel, 22%

Non-professional employees, 20%
Government officials/security personnel, 7%
Agricultural workers/ranchers, 6%
Aid workers and journalists, 10%
Dependents, 22%
Others, 13%
Source: Red24

In January 2011, for example, militants affiliated

to the Sudan Peoples Liberation
Movement/Army kidnapped 29 Chinese workers
from a company compound. A year later,
Bedouin tribesmen took 25 Chinese nationals
who were on their way to a cement factory in
Egypts Sinai.
Countries with high numbers of individuals
working for religious groups and NGOs also
carry a higher risk. For example, large numbers
of South Korean nationals have been seized
over the years, many in their capacity as
missionaries in both Iraq and Afghanistan.

Kidnap & Ransom Today

Terrorists may use local merchants such as tour

and transport operators to identify foreign
visitors for potential kidnap operations. Hostages
may be taken by their captors into a
neighbouring country.
Cultural festivals are also attractive opportunities
for terrorists and criminals to identify and target
tourists for kidnapping. These festivals bring
people to predictable locations along unsecured
routes.

Kidnap & Ransom Today

In Mexico, criminals will abduct first and ask

questions later, a technique known as miracle
fishing. They pick up promising-looking victims
and take them to a holding centre where other
criminals select those to be held for ransom. The
others are usually released.
Some high profile kidnappings
The kidnapping of Charles Augustus
Lindbergh, Jr., the son of trans-Atlantic
aviator Charles Lindbergh and the writer
Anne Morrow Lindbergh, was one of the
most widely reported crimes of the 20th
century. The 20-month-old boy was
abducted from his family home near
Hopewell, New Jersey, on 1 March 1932,
and his body discovered a short distance
away two months later. An illegal immigrant
from Germany, Bruno Richard Hauptmann,
was convicted of the crime and executed.
Italys longest serving post-war prime
minister, Aldo Moro, was captured by leftwing Red Brigade militants on 16 March
1978 and killed after 55 days in captivity.
German businessman Hanns-Martin
Schleyer was kidnapped by the Red Army
Faction, an extreme-left militant
organisation, on 5 September 1977 and
killed six weeks later after the German
government refused to give in to the
militants demands.

(continued)

Hong Kong property developer Walter Kwok

was kidnapped by the notorious gangster
Big Spender Cheung Tze-keung on 30
September 1997 and released seven days
later. His wife fronted the negotiations which
were reported to have concluded with the
payment of a very large ransom. Arrested in
Guangzhou in 1998, Cheung was executed
in the People's Republic of China in
December 1998.
Former Mexican presidential candidate
Diego Fernndez de Cevallos was
kidnapped near his ranch in Pedro
Escobedo, Mexico in 2010. He was freed
seven months later, having apparently been
well treated. His abduction was thought to
have political overtones, which is unusual in
Mexico.

Catlin Group Limited

Potential Targets

In the past year, there have been several actual

and attempted abductions of foreign citizens
throughout the world, including oil company
workers and contractors, journalists, aid
workers, missionaries and foreign business
personnel.

Kidnap & Ransom Today

The Evolving Risk

One of the strongest indicators of a high probability of kidnapping in a
region or country is a history of successful incidents in the recent past.
This means the business model works.

Kidnapping is a crime that evolves. It is widely

thought to be spreading for a number of
reasons, including:

The gap between rich and poor

The disparity between rich and poor is
growing, and thanks to the internet and
global media, everyone can see how the
rich are living. It fuels resentment and a
desire for a bigger share.
Failed states
Countries which have no government or a
government which is unable to exert its
authority are a breeding ground for
kidnapping and other crimes.
Economic deprivation and high
unemployment among men
Economic deprivation and a sense of
desperation have planted the seeds of
kidnapping as a way of getting money in
poor communities. It can then become a
way of life, even when legal options
become available.
The collapse of Communism and the
end of the Cold War
The tension between the United States and
the Communist bloc kept regional and
ethnic power struggles in check. With that
gone, some countries have lost their central
authority, with various groups jockeying for
power. There are many more states with
weak or corrupt police.
A weak ethical environment with a
tendency toward corruption
Kidnapping is likely to be one crime among
others in regions or countries where there
is little respect for law, and officials and
police turn a blind eye to offences, or
worse, play an active role.
Arab spring and other regime changes
The ending of authoritarian governments
and the dismantling of the security
apparatus that supported them tend to

leave power struggles in their wake.

Internal armed conflicts break down social
order.
Islamic extremism
Islamists and other political extremists use
kidnapping as political weapons and as a
means of financing their activities.

Kidnapping blackspots
Kidnapping especially express kidnapping
takes place all over the world. In some countries
or regions, it is endemic. In others, it occurs it
waves. The proportion of kidnaps for ransom in
Latin America mainly Colombia and Mexico
remains very high, slightly more than half the
worlds total, but the number of kidnappings is
growing in the Caribbean and Africa, especially
Nigeria. Countries in which there is political
instability, for example those left unsettled after
the Arab spring such as Egypt and Libya, bear
watching.
No one is safe from kidnapping, regardless
of occupation, nationality, race, gender or
age,
US State Department comment on Haiti.
For years, Colombia was the worlds abduction
black spot. The FARC was a well-disciplined
guerrilla group, utilising remote terrain for hiding
hostages and evading detection. It remains a
dangerous force, but the success of the
Colombian authorities in demobilising guerrillas
and improved policing and general social
condemnation mean that kidnapping is no longer
seen as a low-risk method of raising money.
Afghanistan
There is a high threat of kidnapping throughout
Afghanistan from both financially motivated and
ideologically driven groups and individuals.
Catlin Group Limited

Nationals and members of the international

community have been the target of kidnaps. In
May 2012, a British and Kenyan national were
kidnapped in Badakhshan. Both hostages were
rescued following a NATO/ISAF-led operation
less than a month later.
Argentina
Express kidnappings are on the rise. They have
involved high-profile victims connected to the
government, businesses and media, including
professional football players.
In 2012, three gangs were reported operating on
major roads in the Buenos Aires area. Choosing
victims according to the quality of their vehicles,
gang members surround the car, cutting off
escape routes. They then force the victim to lead
them to his or her home and rob it. Longer-term
hostage-taking is rare by comparison, but it is
reported that wealthier victims are sometimes
held for longer periods, with a ransom
demanded for their release.
Brazil
Express kidnappings are common especially in
Sao Paolo.
Chilean international football star Jorge Valdivia
threatened to leave the Sao Paulo club
Palmeiras after he and his wife were subjected
to an express kidnapping in early 2012.
Newspaper reports said he and his wife were
held captive for three hours after thieves
intercepted their car and demanded more than
$9,000.

Kidnap & Ransom Today

In March 2012, according to Agence FrancePresse, Brazilian police said they had broken up
a so-called Gang of Blondes made up of six
attractive, educated women who were believed
to have abducted 54 female shoppers since
2009. The young women cased shopping malls
and supermarkets in Sao Paulo and Rio de
Janeiro for wealthy women. Once they identified
their target, two of the criminals would hold the
victim while the others exhausted her credit card
limits before releasing her.
China
China has recently seen an increase in kidnap
for ransom incidents, carried out by both
inexperienced individuals and professional
gangs. Despite the country's economic
transformation and growth in wealth, the majority
of the population remains impoverished. The
gap between rich and poor is widening, and a
get rich quick mentality has proliferated.
Colombia
Colombia still has one of the highest kidnapping
rates in the world despite a considerable
reduction over the past ten years. While
Colombians are the primary targets, foreigners
can also be targeted in all parts of the country,
especially those working for (or thought to be
working for) oil and mining companies.
Egypt
Sinai has seen a surge in lawlessness since the
fall of the Mubarak government in 2011 with
increased disputes between tribesmen in the
area and security forces. The aim of the
abductions often appears to be pressure for the
release of relatives from prison.

The Evolving Risk

(continued)

During early 2012, armed tribesmen separately

kidnapped two Brazilian women and their
Egyptian tour guide, three South Korean women
and two American women near a very popular
tourist site at the foot of Mount Sinai. In June
2012, a Boston Pentecostal pastor, church
member and tour guide were abducted in the
Sinai region; the kidnapper demanded the
release of his uncle from prison, claiming he had
been arrested for refusing to bribe police.
Haiti
Assessments of the current level of risk vary, but
there are high levels of criminal activity and
violence throughout the country. Individuals
have been abducted from their homes, work and
in transit. Kidnappers do not discriminate on the
basis of nationality, religion, gender, age or
profession.
Guatemala
Violent attacks on tourists including carjacking, assault, armed robbery, murder,
kidnapping and rape have increased and can
happen anywhere and at any time of day.
India
Abduction has grown faster than any other crime
in India since 1954, but the vast majority are not
kidnap for ransom, according to the countrys
National Crime Records Bureau. It reported 738
kidnaps for ransom out of a total of 38,440
abductions during 2010. The most common
targets are business people; the kidnapping of
children from middle class and wealthy families
has become a flourishing business in India as
wealth has increased.
Abductions of foreigners do occur. In March
2012 Maoist rebels in eastern India kidnapped
two Italian men to demand an end to military
operations against them and the release of jailed
Maoists. The men were trekking in a tribal area
10

of Orissa state, one of several regions of India

where Maoists are active. They were released
nearly a month later.
A report in India Today at the time said that
Maoists were responsible for kidnapping as
many as 1,500 people over four years. Their
aims were said to be both political and financial.
Iraq
The country has a complex kidnapping risk
environment, with criminal, terrorist and
politically motivated individuals and groups all
conducting kidnappings. Western nationals
remain lucrative targets for financial and
propaganda value. Nationals face the greatest
threat, with kidnap and extortion rackets
expected to proliferate amid the instability and
violence. The motives of hostage takers vary
from political to profit.
Individuals have been kidnapped at their homes,
at work and in transit. Kidnappers do not
discriminate on the basis of nationality, religion,
gender, age or profession. Large numbers of
people, including British nationals, have been
kidnapped in Iraq. Many kidnappings have
ended with the death of hostages.
Even close protection does not remove the
threat; a number of those who have been
kidnapped have had security arrangements in
place.
Kenya
Terrorist acts, including kidnapping, are aimed at
Western and Kenyan interests. The presence of
al-Qaida-linked al-Shabag over the border in
Somalia and the diminishing success of Somali
pirates in attacking international shipping are
creating a potent kidnapping threat in the border
area between Kenya and Somali. Al-Shaba is
often thought to be behind recent incidents.
Catlin Group Limited

In September 2011, a British woman was

kidnapped and her husband murdered at a
coastal resort near the border. She was
released in March 2012 after a ransom was
paid. The following month, a French national
was kidnapped from a private residence in a
popular tourist destination on Kenya's north
coast. She died while in captivity in Somalia.
In 2011, two Spanish aid workers were
kidnapped in a refugee camp in north-eastern
Kenya. They were still being held in August
2012. In June 2012, gunmen kidnapped four
foreigners and a driver working for the
Norwegian Refugee Council at a refugee camp
near the border. They were rescued soon
afterwards.
Lebanon
The security environment in Lebanon is
irrevocably intertwined with the situation in Syria,
as well as wider regional developments. The
continuing and increasingly violent conflict in
Syria is a significant cause for concern as it
could spill over into Lebanon, fuelling an
increase in kidnapping and other criminal
activity.
Seven Estonian bicyclists were kidnapped on 23
March 2011, between Masnaa and Zahle in the
Bekaa Valley and held for four months. The
kidnapping was planned and well-coordinated,
according to Lebanese authorities.
Malaysia
Foreign nationals have been kidnapped in the
past in East Malaysia, and the threat is believed
to remain. Boats travelling to and from offshore
islands and dive sites are also possible targets.
There is evidence that criminal and terrorist
groups may plan attacks in resorts located in
isolated parts of eastern Sabah, including
Kidnap & Ransom Today

Semporna and the islands of Mabul and

Sipadan.
Mexico
The scale of kidnapping in Mexico is
exceptional. Official statistics for 2011 are likely
to reveal more than 2,000 traditional
kidnappings for ransom. However, the actual
number is far higher, and the Mexican NGO,
Council for the Law and Human Rights reported
that its statistics revealed some 17,889
kidnappings in the country last year. Reported
abductions have increased by 300 percent since
2005, even according to official figures which
are grossly understated (see page 14).
Nigeria
Nigeria records more than 1,000 incidents a
year, and there are undoubtedly many that are
unreported. The British government is aware of
at least 25 British and dual British citizens and
more than 200 other foreign nationals who have
been kidnapped in the Niger Delta area since
January 2007. From the unstable situation in the
Niger Delta, kidnapping has spread across the
country.
Kidnappings can be for financial or political gain.
Victims were originally foreign oil workers, but
today many are locals, often employees of
international oil and oil service companies, and
not necessarily wealthy; anyone whose family
might pay a ransom can be targeted. In June
2012, police rescued international footballer
Christian Obodo who had been kidnapped from
in front of a church.

11

The Evolving Risk

(continued)

There remains a high threat of kidnapping and

other armed attacks targeting oil and gas
facilities and workers. This also applies to ships
and oil rigs at sea off the coast of the Niger
Delta. In January 2012, kidnappers abducted a
US citizen from his vehicle in the Delta and killed
his security guard. In April 2012, criminals
kidnapped a US national in Imo State and a
Spanish citizen in Enugu State in separate
incidents. In May 2012, criminals kidnapped an
Italian national in Kwara State. On 7 May a
Lebanese national was kidnapped in Kaduna
State. His Lebanese colleague was killed during
the abduction.
Military-led rescue attempts can end in the
deaths of hostages. Two engineers one
British, one Italian were killed by their captors
in March 2012 when Nigerian security forces,
with support from Britain, attempted to rescue
them. They had been held by elements of the
Islamic fundamentalist group Boko Haram for
ten months.
Pakistan
Kidnapping is endemic in Pakistan. Abductions
of Pakistanis and foreign nationals, usually for
ransom, continue to increase dramatically
nationwide. Foreign nationals of Pakistani origin
are at particular risk. Official statistics reveal
that there were approximately 660 kidnappings
for ransom in 2011, but the true number is likely
to be higher due to under-reporting and lack of
communication.
A British national kidnapped in Quetta on 5
January 2012 was murdered by his kidnappers a
few months later. Other cases include a US
national kidnapped in the city of Lahore in
August 2011. Al-Qaida later claimed
responsibility and issued a list of demands in
exchange for his release.
12

Two Swiss nationals were kidnapped in south

western Baluchistan in July 2011. A BritishPakistani boy was kidnapped in the Punjab in
March 2010, and a British-Pakistani journalist
was kidnapped in South Waziristan in April
2010. Other incidents include the 2010
kidnapping of a US citizen child in Karachi and
the 2009 kidnapping of a US official of the
United Nations High Commission for Refugees
in Balochistan.
Philippines
There is a danger of kidnapping throughout the
Philippines, particularly in the southern
Philippines, including coastal and island tourist
resorts, dive sites and live-aboard dive boats
including in remote locations in the Sulu Sea.
A Japanese man was kidnapped in July 2011 on
Pangutaran Island in the Sulu Archipelago and
had not been released a year later. Previous
incidents include the kidnapping of US citizens
and a Filipino companion in July 2011, a Swiss
national in Zamboanga City in April 2010, an
Irish priest in Zamboana del Sur in October 2009
and three members of the International Red
Cross, including two foreign nationals, in Sulu in
February 2009. In these cases the victims were
released unharmed.
Russian Federation
In Russia, two high-profile incidents in 2011
heightened the concern of wealthy families
about the safety of their children. One was the
abduction and murder of the daughter of a top
executive at Lukoil, Russias largest privately
owned oil company. The second, the kidnap of
the 20-year-old son of the founders of anti-virus
Kaspersky Labs, ended successfully. Local
reports said the kidnappers asked for a US$4.5
million ransom, but the young man was rescued
in a police raid six days after his abduction.
Catlin Group Limited

Kidnapping for political, ransom and revenge

reasons is common in the Northern Caucasus.
As well as criminals and political insurgents,
local authorities are said to indulge in systematic
abductions, often of those who do not share the
religious views of official Muslim clerics.
Western governments warn against all travel to
Chechnya, Ingushetia and Dagestan and all but
essential travel to several other parts of the
North Caucasus because of the kidnapping risk.
Somalia
The offshore threat to shipping is well known,
but the success of anti-piracy measures is
driving kidnap activity on shore and threatening
insecurity along the border areas of
neighbouring countries. The combination of
widespread insecurity and the presence of
Islamist militants, bandits, pirates, tribal warlords
and militias ensure that there is an extremely
high-threat environment.
Syria
There have been a number of kidnappings,
including of Westerners, as the security situation
has deteriorated. The UKs Foreign and
Commonwealth Office advises against all travel
to the country.
Venezuela
The country has reportedly overtaken Colombia
in the kidnapping stakes. Official statistics reveal
more than 1,000 traditional kidnappings for
ransom in 2011. In November 2011, Wilson
Ramos, a promising young player for the
Washington Nationals baseball team, was
abducted at gunpoint from his familys home. He
was freed 50 hours later after an armed police
raid on the kidnappers mountain hideout.

Kidnap & Ransom Today

Express kidnappings are a serious problem. In

November 2011 on two separate occasions,
foreign diplomats had their cars blocked along
the highway by other vehicles, from which
armed kidnappers emerged. One of the victims
did not produce what the criminals regarded as
enough cash, and they shot him the leg. The
other man and his companions were released by
the roadside after an hour. The kidnappers took
the car, money and cellphones.
Virtual kidnappings, in which criminals use a
childs contact information to call parents and
demand ransoms even though the children have
not been abducted, and inside jobs, in which
domestic employees are paid for house keys
and information, also occur in Venezuela.
Yemen
More than 200 foreign nationals have been
kidnapped over the past 20 years. The threat
comes from armed tribes, criminals and
terrorists. Western nationals are potential
targets, and successful ransom negotiations
concluded by Al-Qaida in the Arabian Peninsula
could encourage more kidnappings. There is a
strong possibility that any hostage captive in
Yemen could be sold to Al-Qaida. The unsettled
security situation and the Islamists evolving
presence in the south exacerbate the threat.
Western Europe, United States, Canada
and Japan
Kidnapping is not limited to developing
countries, but hostage taking for money is rare
in developed countries with well-organised
security services. In these countries, the police
give kidnapping a high priority and have a good
record of recovering victims.
Text continues on page 15

13

The Evolving Risk

(continued)

Mexico: The Kidnapping Capital of the World?

Mexicos emergence as one of the worlds
primary hotspot for kidnap, ransom and
extortion is largely the result of the overall
deterioration in the countrys security
environment. The Mexican governments
offensive against various drug-trafficking
organisations has fuelled inter- and intra-cartel
violence and in some areas, created zones in
which ordinary criminals, professional kidnap
gangs and corrupt law enforcement officers
operate with impunity.
Increased activity by security forces and
greater competition for narcotics routes into
the United States have also pushed the drug
traffic trafficking organisations, and by
extension their criminal affiliates, to diversify
their activities.
Kidnappers in Mexico traditionally targeted
wealthy local businessmen, corporate
executives, landowners and their dependents.
However, in recent years they have become
less discriminatory and individuals from the
lower and middle classes are increasingly
being targeted, as are students and children.
Kidnappers in Mexico are also, in global
terms, relatively violent. Of the 11,232
recorded kidnappings between 1994 and
2008, some 935 victims were killed (136 in
2010 alone).
A mean average of statistics released by a
variety of official government sources and
non-government organizations, including the
Federal Police, shows a steep rise in reported
incidents from 2004 to approximately 1,600 in

14

Recorded Kidnappings in Mexico

2000-2010
1,600
1,400
1,200
1,000
800
600
400
200
0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Red24

2010. These statistics, however, represent

only a small proportion of the actual number
of cases. Many victims are unwilling or unable
to report incidents due to fears of reprisals or
concerns over official corruption, collusion or
incompetence, often well justified.
Incidents of extortion are also rising in
Mexico. A large number and range of
businesses in the country, including even
furniture and technology outlets and
insurance companies, have been forced to
pay protection money. The consequences of
non-payment can be severe; victims have
been physically assaulted, had family
members abducted and have even been
murdered. Anecdotal evidence also indicates
there has also been an accompanying
proliferation in express and virtual kidnapping
incidents in Mexico over the past five years.

Catlin Group Limited

Express and tiger kidnaps do sometimes occur,

but the longer a kidnapper holds a hostage, the
greater the risk of detection, so most abductions
are either short-lived or involve custody disputes
or sexual exploitation.
In the United States, the National Center for
Missing and Exploited Children reported that
115 children were the victims of stereotypical
kidnapping in one year. This meant a stranger or
someone the child did not know well held the
child overnight or longer, transported the child
50 miles or more, killed the child or demanded a
ransom. Of these, only 57 per cent ended with
the return of the child.
Parts of Italy have a long history of kidnapping,
which likely continues today. A government ban
on ransom payments, combined with the power
to freeze the assets of families and others who
might pay kidnappers, means that the issue has
gone underground, and few kidnap incidents are
now reported.
One of the most famous kidnap for ransom
cases was in 1973, when the Calabrian
'Ndrangheta held John Paul Getty III, grandson
of oil tycoon John Paul Getty, captive in Italy for
five months. The ransom money from the
kidnapping reportedly US$2.7 million was
used as seed capital to allow 'Ndrangheta to
enter the lucrative international cocaine market.
Elsewhere, there have been incidents connected
with organised crime or as a consequence of
other criminal activity, but they are rare.

Kidnap & Ransom Today

One of Greece's shipping tycoons was

kidnapped at gunpoint in an Athens suburb in
2009. Pericles Panagopoulos was the third
prominent Greek to be kidnapped within a year.
He was hauled from his armour-plated
Mercedes-Benz as he was being driven to work.
The 74-year-old was released after eight days,
after payment of a ransom reported at between
US$19m and US$26m. Police said it was the
largest ever known in a Greek kidnap case.
Prognosis
Kidnapping is a crime that constantly evolves in
terms of geographical patterns, targets and
tactics. Increasing numbers of extremist and
criminal groups use it to raise funds and exert
political pressure. Without good law
enforcement, this tendency is unlikely to
diminish given the current global economic
turbulence and the proliferation of conflicts.
New hotspots will emerge in changing
environments. Kidnap activity has already grown
in the Sahel-Sahara region over the past two
years, with the abduction of several foreign
nationals from Mauritania, Niger and Mali by alQaida-affiliated groups. This pattern may well
intensify as groups look to increase revenue and
destabilise authority.
Developments in Libya in 2011 and a
resurgence of Tuareg rebel activity in the region
compound these trends. Furthermore, growing
instability in Central America is likely to lead to
an increase in incidents in Guatemala,
Honduras, El Salvador and Costa Rica. The
deterioration in the security environment in
Yemen should be of significant concern to
foreign nationals operating there, and the
conflict in Syria is likely to have consequences
for its neighbours.

15

Prevention

The principles of creating a kidnap crisis management team are the same
as for dealing with any corporate emergency, adapted to kidnappings
unique circumstances.

A great deal can be done to reduce the

likelihood of kidnap. The first and foremost
precaution is to be aware of the risks, think and
plan ahead.
The next step is to use experts and consultants
with appropriate experience to help establish a
plan. Consultants offer services to reduce the
risk of kidnapping including risk mitigation
training for employees and family members,
crisis management training, individually tailored
risk advice and, if the risk is very high, personal
protection. Many provide regular country risk
assessments and they can tailor reports
specifically to an individuals needs.
For companies, preparation can be split into two:
head office functions and local risk mitigation
measures. For individuals, the circumstances
will be slightly different and the use of external
consultants comes into play more forcefully, but
some of the same rules apply, such as
communication and generally thinking ahead
about who should assume which responsibilities.
Companies should have kidnap and ransom
procedures in place for head office and local
management, including a pre-established crisis
management team able to work closely with
external security experts. Companies must
ensure that they adequately brief their
employees about the risks and provide suitable
training; failure to do so is likely to lead to legal
action if there is an incident.

compliance with local notification rules and

media relations.
On the ground
On the ground, the message is straightforward.
Be prepared, think ahead, always be on the alert
and follow some basic rules. These can be
divided between rules for those who are visitors
and those who are residents of an at-risk
country.
Visitors
For visitors, some basic rules include:

Plan ahead, including checking

documentation;
Do not draw attention to yourself, especially
with expensive cars, watches, electronic
equipment or jewellery.
Communication make sure someone has
your itinerary and that you check in on a
regular basis.
Know your contacts. You should arrange to
be met on arrival at the airport.
Use official taxis or cars summoned by
colleagues or hotel staff at the last moment.
Stay alert to all that is happening around you
and take note of safe havens, such as police
stations, hotels, hospitals or shopping
centres.
Make sure your hosts have details of your
itinerary, but avoid discussing your plans
with other employees, in public places or on
social media sites.

The importance of having a crisis management

plan and a team of individuals selected to
handle a situation is vital. In hostage situations,
nominated senior executives should take
control. Their responsibilities will include
communication with consultants, the victims
family, the kidnappers and, internally,
16

Catlin Group Limited

Residents
For those based in higher-risk countries,
common sense goes a long way, but there
are several basic principles that should be
followed:

Awareness
Learn which areas are high-risk and be
aware you may be a target. React quickly if
the security situation changes and always
check for anything unusual. Be particularly
alert when arriving at or leaving places that
are regularly visited, and teach your whole
family to be aware of their surroundings.
Low profile
Keep a low profile. For example, do not
discuss work in public and make sure your
home address and family details are
safeguarded. On the phone, identify callers
before answering questions or giving out
personal details. Keep your appearance and
spending habits discrete.
Unpredictable routines
Vary journeys to work, home or social
events, avoiding back streets and deprived
areas. Also try to vary travelling times. Many
accidents are staged, so if you are involved
in an accident, do not stop but drive to a
safe location to report it.

Kidnap & Ransom Today

Communication
Know where all members of the family are
supposed to be at all times and have contact
numbers for the office, neighbours and the
police/local guard force. Always ask for help
if you are threatened or feel afraid.
Importantly, remind the entire family not to
divulge on social media websites such as
Facebook or Twitter where you or they are
at any given time or to disclose personal
information.
Layers of security
Analyse how vulnerable you are and
develop security measures all stages of your
daily life. You must not switch off your
security precautions when you leave the
office.

About half the kidnaps we have managed

are incidents where the victim has
sleepwalked into his own kidnap. The
kidnap was entirely predictable and therefore
preventable.
Red24 kidnap response consultant

17

Managing an Event

Although every kidnap incident is different, there a common elements

to a successful response. Planning ahead is key.

As soon as an employee is known to have been

abducted, a company must activate or create a
crisis response team. The most senior corporate
executives should not be part of this team,
although they should receive regular briefings,
especially if the companys shares are publicly
traded. The family of a victim may consider
choosing a less-directly involved family member,
close friend, lawyer or religious advisor as the
main contact.
The company or family should notify the
insurance broker or kidnap and ransom insurer
as soon as there is evidence of a kidnap to
obtain access to external consultants. The
consultants can offer invaluable support, advice
and information. Although they will not
communicate directly with the kidnappers, they
can train the negotiator regarding how to
respond to demands. The consultants will help
maintain calm and explain all available options,
so the business or family can make informed
decisions.
The crisis management team should be
responsible for:

18

Negotiating with kidnappers

Kidnappers may wish to use third parties,
such as a local priest or community leader,
as the conduit for negotiations. The
response consultant will act as a guide
through the various stages, including threats
and demands, but the consultants
employees will not conduct the negotiation
themselves. The nominated negotiator
needs to be fluent in the kidnappers
language and preferably have some
knowledge of the region. Negotiators will ask
for proof of life and attempt to establish a
rapport with the kidnappers, but they should
not make an offer before demands are clear.

Communications may be verbal or by fax,

email, post or package drops.
Dealing with third parties
The relevant authorities should be informed
if the consultants say it is safe to do so.
There may be local legal requirements to
inform the embassy of the victims country
and local security forces. If the kidnap
involves multiple parties, communication
should be established with the other
companies or families.
Managing the media
Dealing with the media is important,
especially for public companies and
celebrities. Consultants can give valuable
advice. Prepare statements in case news of
the kidnapping becomes public. It may be
difficult to keep the story out of the press. An
appointed person or service should monitor
the media, including social networking
websites, throughout the incident.
Dealing with families and other
employees
Companies need to keep the hostages
immediate family informed throughout and
ensure the crisis management team knows
about any direct contact between the family
and the kidnappers. Other employees
should know that everything possible is
being done, but the crisis management team
should only give details to appropriate senior
executives.

Catlin Group Limited

Arranging ransoms and ransom delivery

Negotiators will generally make an
immediate counter-offer to an initial demand.
This offer may increase through the process
but in diminishing increments, so the
kidnappers see they are gaining little.
Ransom payment procedures will need to be
established.
Reducing the corporate impact
Companies will also want to manage the
impact on the business and their reputation.
Following agreed emergency procedures
adapted to the circumstances and taking
advice from established consultants will help
reduce bad publicity and the likelihood of
litigation by the victim or family.

The situation will remain fluid and the team will

need to adapt to new and complex issues. A
response consultant can provide advice and
assistance throughout. They will:

Gather information;
Give objective advice;
Train a communicator;
Manage the crisis management team;
Develop financial and negotiation strategy;
Prepare the company and the family to
make the right decisions; and
Enable senior executives to manage the
business.

Among specific tasks, the consultant will advise

whether the police should be contacted and
whether local police and officials are trustworthy.
The consultant can also explain how to make
the kidnappers provide proof of life, where to set
up a meeting and how to deliver the ransom.

Kidnap & Ransom Today

Negotiations
The purpose of negotiation is to:

Keep the victim alive;

Reduce the kidnappers expectations;
Establish a rapport with the kidnappers;
Prevent double payment of ransom;
Increase the victims chance of survival; and
Defuse a volatile situation.

Pressure tactics are an integral part of the

kidnappers methods, to the point where the
response consultant can tick them off against a
list: silence or limited communication, refusal to
provide proof of life, threats, deadlines, reported
ill health of the hostage, good guy/bad guy
negotiators, time pressure, and references to
finances.
The safest way to resolve a kidnap is by
negotiation.
Peter Dobbs, Catlin
Silence weakens family resolve. One incident
took 56 days before the hostage-takers made
contact. In most cases, however, they will
communicate within a few hours. The family or
company will usually get proof of life to show the
kidnappers have control of the victim and that he
or she is still alive. There are various means by
which this can be done and confirmed
technically.

19

Managing an Event

The next step is the demand. Land-based

kidnappers will generally apply increasing
pressure because they want to come to a
settlement quickly. Immediate agreement is
naturally tempting, but it can result in a higher
demand. Negotiating down can be very
uncomfortable; the kidnappers will almost
certainly react with threats, which will be
especially hard to bear if a family member or
child is involved.
It is the job of the consultant to desensitize the
family or company so they can accept that,
however terrifying the threats, they are rarely
carried out. Most kidnapping is a business, and
the kidnappers do not want to damage their
bargaining asset.
The negotiation must be about diminishing
returns. The kidnappers must realise that
increases in the amount offered in response to
their demands are coming to an end. They are
most likely to settle once they realise that they
will gain nothing further as time passes, while
their risk of discovery is increasing.

Managing post-event
During and immediately after the kidnapping,
victims and families will suffer normal reactions
to what is an abnormal event. Only in some
cases, however, will this level of distress
continue long term.
Following release, the hostage and his or her
family should be briefed on how to obtain both
practical and psychological assistance in the
months that follow. Different people react in
different ways, and it cannot be assumed they
will want or need help. They should not be
forced to have counselling, but it must be
offered. Consultants can provide the services of
clinical psychologists who have experience with
kidnapping victims.
In addition to the normal desire to help someone
who has been through a traumatic experience,
offering such support should help mitigate any
liability claim.

Companies should not be surprised to be

sued by an employee who has been
kidnapped or by his or her family. We see a
lot of legal actions from people who have
been working in high-risk areas and had
something bad happen to them, not just
kidnapping. They are looking for anyone
who has a deep enough pocket.
Tara Lee, DLA Piper

20

Catlin Group Limited

Ransom Demands

The negotiation must be about diminishing

returns. The kidnappers must realise that
increases in the amount offered in response to
their ransom demands are coming to an end.
They are most likely to settle once they realise
that they will gain nothing further as time
passes.

Kidnap & Ransom Today

21

Insuring the Risk

Dealing with claims

The services of experienced consultants are one
of the most valuable aspects of a K&R policy.
The insurers will have vetted them in advance,
so there is no need to search for someone
suitable during the stressful situation of a
kidnap.

K&R insurance is quite straightforward. Policies

can be underwritten on a short-term, annual and
three-year basis.
The coverage typically has six heads of cover,
and insurers will pay up to the full policy limit for
each of them, except that the personal accident
element is subject to a sub-limit, typically about
one-quarter of the full limits. There are no
deductibles.

The K&R insurer cannot pay the ransom but will

reimburse the policyholder quickly, usually within
weeks, especially with assurance from the
consultant that the ransom has been paid. The
policy can also give comfort to a lender.

The insured will pay the costs and reclaim them

under the policy, up to the limit insured. There is,
however, no limit to consultancy fees, and the
insurer will pay the consultant directly.

Speeding claims settlement

The aspect of coverage most likely to give rise
to queries and delay settlement is additional
expenses. These will depend on the length of
the detention, but the costs for legal advice,
reimbursing the victims salary, travel and hotel
expenses, interpreters and communications can
be substantial.

The standard heads of cover are:

Ransom
Transit risk for the ransom
Additional expenses.
Legal liability in case of litigation by a kidnap
victims or family
Personal accident, including potential death
and permanent disability payments with
respect to kidnap victims
Consultancy services

Following these procedures will smooth the

claims process:

Possible extensions to coverage include:

Emergency evacuation/repatriation
Loss of earnings caused by an insured
incident
Malicious threat expense

Policies for companies are generally quite broad

in terms of who is covered, but with an
aggregate limit to claims. Policies purchased by
families usually cover specific, named
individuals.

22

Notify the broker or insurer as soon as

possible when there is clear evidence of an
abduction, even if there has been no contact
from the kidnappers.
Use the consultants to their full capacity.
Read the policy. Following it will help with
settlement.
Keep the broker or insurer fully informed.
Confirm additional expenses with the insurer
before they are incurred, other than in
exceptional circumstances.
Get and retain evidence of spending.

Catlin Group Limited

Scenarios
Organizations operating in high-risk areas must be prepared for
the risk that their employees could be kidnapped. Here are some
real-life examples.

There is no one common kidnap scenario, but

here are some examples of potential situations
in which employees were abducted:

About 30 armed men in boats attacked a

slow-moving pipe-laying barge in the Niger
Delta. Four of the riggers werent able to get
to the safe room in time and were
kidnapped. The militants took them on shore
and demanded money for their release. The
US-based owner of the barge was insured,
and the state government put the
kidnappers under a great deal of pressure,
threatening collective punishment. The men
were released after about three weeks,
having been well-treated, without any major
concessions. The victims, nevertheless,
sued the company for damages on the basis
that they hadnt been properly briefed.
A young man working with a US faith NGO
and his driver were taken by a tribal group in
a remote part of Northern Iraq. The
kidnappers demanded US$200,000 for their
release. The family and NGO were not
insured. However, they did eventually
employ a kidnap response consultant, which
recommended immediate payment of the full
ransom demanded, as the going rate for a
Western hostage was several times more.
The tribal group may not have realised this
because of their comparative isolation. It
took approximately 14 nerve-wracking days
before the ransom was agreed, the money
was delivered and the men were released.

Kidnap & Ransom Today

A Canadian NGO worker was kidnapped by

Iraqi paramilitaries and accused of being an
Israeli spy. The case was particularly
stressful because the group had killed other
hostages. The solution, in fact, was a
diplomatic one. The consultants successfully
asked a high-ranking Palestinian leader to
state that there was no suspicion of the
Canadians involvement with Israel, and an
appeal to the groups leader for personal
intervention resulted in a solution that saved
face for all.

Two cases involving journalists show the value

of planning and insurance:

Two European journalists were kidnapped in

Somalia. The men had received training and
were well-briefed before setting off for the
danger zone. Their employer was wellprepared for the risk and had established a
nominated and trained crisis management
team. The journalists were released in about
40 days and suffered no lasting harm.
By contrast, the employer of an Australian
and a Canadian journalist, also abducted by
Somalis, had no insurance. No crisis
management team had been set up prior to
the incident. It took more than a year for the
victims to be released. They were poorly
treated and suffered mental anguish.

23

Further Contacts & Sources of Advice

DLA Piper

http://www.dlapiper.com

Drum Cussac

http://www.drum-cussac.com

Red24

http://www.red24.com

Compass Risk Management

http://www.compass-rm.com

Government travel advice:

Australia

http://www.smartraveller.gov.au/

United Kingdom

http://www.fco.gov.uk/en/travel-and-living-abroad/traveladvice-by-country/

United States

http://travel.state.gov/travel/travel_1744.html

24

Catlin Group Limited

Further Contacts and Sources of Advice

We live in an increasingly uncertain age.

Coverage highlights include:

Undemocratic states have toppled across North

Africa and the Middle East, but the stability of
what replaces them is as yet unsure. Social
networking websites help fuel political unrest
across the globe. The disparity between poverty
and wealth is increasing.

Kidnapping incidents on land and piracy on the

high seas are now foreseeable events.
Businesses and organisations which face
potential loss from ransom payments, business
interruption, litigation and long-term reputational
damage need sensitive crisis planning and risk
transfer solutions.

Catlin Asset Protection is positioned to help

clients with these specific issues. Our threatcentric experts have a lifetime of experience
dealing with these problems. We make
confidentiality a priority and operate a very strict
policy of non-disclosure.

For more information please call +44 (0)207 626

0486 or email CatlinSpecialRisks@catlin.com.

Kidnap, extortion or piracy ransom

reimbursement;
Ransom lost in transit;
Wrongful detention all expenses
associated with the incident;
Personal accident a lump sum for injury or
death for those involved;
Response consultant costs on an unlimited
basis;
All reasonable additional costs;
Limits up to US$50 million for K&R and
US$10 million for piracy; and
Access to travel risk information services
and maritime intelligence systems.

We offer broad wordings and competitive

solutions to real-time global concerns.

Kidnap & Ransom Today

25

Catlin.com

Catlin Asset Protection

20 Gracechurch Street
London
EC3V 0BG
United Kingdom
Tel: +44 (0)20 7626 0486
Email: CatlinSpecialRisks@catlin.com