It was the case that shook Hong Kong high society to its foundations. In 2015 Bossini heiress Queenie Law was kidnapped from her Sai Kung home, held in a cave for four days and only released on payment of a HK$28 million ransom. It ended with the eight perpetrators in prison, but it got a lot of Hongkongers thinking: about private security, but also about insurance.
There are about 15,000 kidnappings for ransom a year globally, worth about half a billion US dollars. Kidnap and ransom insurance, aka K&R, has traditionally been most popular among people travelling to high-risk areas: a lot of the global hotspots are in Latin America and Africa, but there are plenty within Asia, where 40 per cent of the world’s kidnappings took place in 2015, including Afghanistan, Pakistan, the southern Philippines and eastern Malaysia, and parts of India and China—potentially including just over the border from Hong Kong.
“For the syndicates over the border, it can look like low-hanging fruit,” says Michael Lamb, chief executive of insurance broker CCW Global. “K&R isn’t a massive market in Hong Kong, but it’s growing.”
Coverage is available in Hong Kong through a number of insurers, several of them Lloyds syndicates that specialise in niche products. Policies generally cover ransom payments, including the interest on any loan; death or injury sustained during kidnapping or confinement; transport costs; legal liability; and usually extortion—if he’d had the right insurance policy, for example, Edison Chen’s photos might never have ended up on the internet.
They also cover the costs of intermediaries to help secure the victim’s release, who insurance companies will also typically supply. In other words, “You’re not going to be walking down Lockhart Road with a duffel bag filled with $1 million,” says Lamb.
“Kidnappers usually say don’t go to the police, but no one ever says don’t go to your insurance company. You’re probably not going to be in the best head space to deal with the situation.
“The insurance company will come in and take a look at the situation, and ask: is there a reason for us to pay the ransom? Obviously, if you pay it but didn’t need to, all the nasties around the world will think: here’s a soft target.”
Except for the costs of intermediaries, total coverage tends to be capped; the entry level for ransom payments is usually about US$1 million of coverage.
At the moment policies are mostly taken out by companies insuring their staff. Individual policies are fairly straightforward, with quotes based mainly on that person’s net worth; corporate policies are more complex, based on factors like company financials and the nature of the business. Worldwide coverage is pretty standard, but where you’re planning to travel will of course be a factor in calculating premiums. They’re not generally excessive, though: typically, less than your health insurance.
Unfortunately, most coverage is limited to threats in the physical world; online ransomware is generally covered by separate policies, for which premiums might recently have risen rather sharply.
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