As kidnapping incidences become more prevalent, it’s important for carriers and brokers to inform clients of their available K&R options. Hart Brown, senior vice president and practice leader of Organization Resilience at Hub International Ltd. sheds light on the important message for clients – and how ransom situations such as those in the Philippines may impact premiums.
Q: What is important to communicate to clients as they take out their travel coverage?
HB: The coverage should be coordinated with a response plan. Not only should clients be aware of how to engage the policy but what and how the response actually occurs. This can be different based on the policy language, the designated response company and the response provider’s procedures.
This is true of cases involving a medical issue (under a travel medical or business travel accident plan), a situation involving a security or political evacuation as well as a kidnapping. Each policy and response can be different and require different actions by the travelers to seek assistance.
The amount of coverage should also be considered. If multiple travelers or executives are traveling together, will the coverage be enough to support a situation that involves all of them. This is true of issues related to a medical event such as a traffic accident or even a plane incident. From a security perspective, the same is true if all of the travelers are kidnapped at the same time.
Q: Will travel premiums rise for travellers to the Philippines as a result of this kidnapping case?
HB: It is not likely at this time. Country risks are evaluated continuously and used to establish global exposures. At the time when coverage is sought, a travel schedule is part of the process but premiums have remained consistent in recent years. As the risks shift through the world, from location to location in the form of “hotspots”, the extent of K&R is not necessarily increasing dramatically.
It is more likely that travel training and preparedness in the form of response plans, trip briefs and traveler training will increase for areas that are seen as a “hotspot”.
It is also important to note that depending on the situation within the country, the risk is not necessarily the same in every part of the country. So these precautions should and can be balanced with the specific itinerary.
Q: How will the K&R market continue to evolve?
HB: The K&R market is continuing to evolve not only in the traditional manner with an expansion of traditional services. For example, some K&R policies will cover events such as stalking, express kidnapping, various types of extortion or even pet napping. In addition there are some discussions into new areas such as cyber. In a cyber event against a person, whether it be from a cyber extortion case or even a theft in the form of cyber theft of finances, the types of coverages that can be available are limited. Therefore, a K&R policy may be a venue for these new risks.
RELEVANT LINKS:
Express kidnappings top challenge for K&R insurers
