Insurance and hostage negotiators: big business with kidnapping

Today, specialists take on all of the crisis management after a kidnapping, from caring for family members to negotiating with kidnappers, from estimating the correct ransom amount to cooperating with the police, according to the science website The Conversation. Kidnapping experts sometimes operate in a gray area.

Different countries have taken different approaches to dealing with the kidnapping of their citizens, according to the British Guardian. Britain, along with the US, has long been a proxy for the “no-compromise” camp, officially refusing to negotiate with terrorists, pay ransoms or make any other concessions. It is feared that paying a ransom will increase the risk of future kidnappings. In addition, this also puts money in the hands of terrorist organizations with which ongoing operations could be financed, according to the reasoning.

West German police officers at a roadblock following the kidnapping of political leader Peter Lorenz

AP/Kurt Stocking

A barricade in West Berlin in 1975 following the kidnapping of Berlin’s CDU state leader Peter Lorenz by the June 2 Movement terror group.

Looking for new customers in the war on drugs

The big kidnapping insurance business started in 1982, as The Guardian writes. British insurance broker Doug Milne was looking for new clients, ideally he was also looking forward to a new field of business.

Milne went to Bogotá, the capital of Colombia, with little knowledge of Spanish and only two contacts, and witnessed the start of the extremely bloody war on drugs between the cartels themselves and with the Colombian police and army. Kidnappings were more or less the order of the day in the sometimes almost belligerent conflict.

Car convoy with relieved hostages Paul and Rachel Chandler in Somalia 2010

Reuters

In 2010, a convoy brought hostages Paul and Rachel Chandler, who had been freed by Somali pirates after more than a year, to the airport.

First thoughts after Lindbergh’s kidnapping

Although kidnapping insurance already existed at this time, it was practically unknown. The first kidnap and ransom insurance policies were issued in 1932, according to the New York Review of Books. It was “invented” in the wake of the sensational Lindbergh kidnapping that kept the world press on edge for months.

Anne Morrow Lindbergh with her son Charles Augustus Lindbergh, Jr. 1931

access point

The son of the pilot Charles Lindbergh strolling in his stroller

Pilot Charles Lindbergh had achieved world fame with the first nonstop flight from the US across the Atlantic to France. Celebrated as a national hero in the US, Lindbergh was criticized for his political views and his speeches as a Nazi sympathizer and anti-Semite in the 1940s, but even before that, his life took a turn. tragic. His two-year-old son was kidnapped on March 1, 1932, and a ransom was paid. On May 12, the boy was finally discovered dead.

Kidnapping wave since the 1960s

However, the new kidnapping insurance policies were not a real best seller. It was only in the 1960s, after a series of sensational kidnappings of businessmen and their families in Europe and Latin America, that companies began to purchase such policies for high-ranking employees and their families. Above all, terrorist organizations such as the Spanish ETA, the Red Army Faction (RAF) in Germany and the Red Brigades in Italy were responsible for kidnappings alongside the mafia in Europe.

US military ship guarding hostages at MW Faina 2009

Reuters/US Navy

The US Navy provided fuel and water to the cargo ship “Faina”, which was seized by pirates off the coast of Somalia for four months, after its release in 2009.

The secret clause should minimize the risk

This type of kidnapping insurance had a major flaw, as the New York Review of Books writes. Insurers did not participate in the negotiation process. At that time, the insurance companies really only had one task: to reimburse the ransom.

However, there were several conditions imposed by the insurance companies. The policy had to be kept secret so as not to increase the risk of being kidnapped. It was also feared that if the kidnappers knew about the policy, they would demand more ransom, according to The Guardian.

Relatives still had to negotiate themselves

If kidnapping became more lucrative, it was also feared that the number of kidnappings would increase. It was also intended to prevent people who had already been kidnapped from being kidnapped again due to the high ransom. Another principle of insurance: the rescue does not come early.

The disadvantages for the insured: their relatives or the employees of the companies they worked for had to work with the police to negotiate with the kidnappers, until the delivery of the ransom, and they were generally overwhelmed.

Professionalization push with full service

A solution to this finally emerged in the 1970s. According to the New York Review of Books, a young insurance broker, Julian Radcliff, had the bright idea: A security company specializing in kidnapping cases was needed. First as a department at Lloyds, then as a separate company, Control Risks specialists provided the expertise to handle kidnapping cases in the best possible way for victims. The experts were mainly recruited from the ranks of the army and the police and drew on their previous experience.

Potential victims are also checked.

And the changes also took hold in customer acceptance. With the consent of future insureds, possible kidnapping victims were secretly thoroughly investigated and security measures were proposed. If implemented, for example, security personnel would be hired, houses would be better insured and the like would entice the insurance company with discounted premiums.

The handling in case of hijacking was also renewed. The specialists then advised the families or employers of the kidnapping victims. Because they had to keep communicating with the kidnappers, otherwise the kidnappers would have found out about the insurance and could have increased their claims. Once the ransom was set, it was delivered by the professionals and, ideally, the hostage was returned healthy.

Courses for correct behavior as innovation

Control Risks eventually faced competition from the United States. A former CIA agent, Mike Ackerman, founded his own company; unlike Control Risks, which had more staff, he did almost everything himself, according to the New York Review of Books. He also negotiated with the kidnappers as the alleged family member or boss of the victim and delivered the ransom.

Finally, Milne, who expanded his kidnapping policy business from Colombia to all of Latin America in the early 1980s, went to London and, with his know-how and numerous employees with professional police and military backgrounds, also established a branch in Europe. His innovation: He offered courses designed to minimize the risk of kidnapping and taught how a victim should behave with his kidnappers in the worst case.

75 percent of Fortune 500 companies are insured

He eventually managed to get insurance companies to cover the costs of his courses, because potential victims and insurance companies have an interest in minimizing the likelihood of a kidnapping, as The Guardian writes. According to the newspaper, 75 percent of Fortune 500 companies have such insurance for vulnerable employees. Two insurers, Hiscox in the UK and AIG in the US, currently set the standard in the industry, she said. But numerous security companies have also specialized in kidnapping cases.

According to The Guardian, hostage negotiation has already become something of an industry, including conferences, conventions and joint strategies, as well as lobbying for government regulations. The most important thing is confidentiality. This should make the ransom as low as possible and the business for criminals as unprofitable as possible, as the Washington Post writes. According to the newspaper, Nigeria, Mexico, Iraq, Mali and Colombia are considered “hot spots” for kidnappings.

Good chances of survival

According to the newspaper, the success of the industry is impressive. 97 percent of kidnappings involving professional negotiators are successfully resolved by paying a ransom. A small percentage of the victims manage to escape, only a few have to be rescued from the hands of their kidnappers in expensive and high-risk operations.

Less than 1 percent of victims die, according to The Guardian, citing industry figures. People without insurance would cost hostage negotiators up to $2,000 a day, according to the New York Review of Books. The magazine estimates sales in the industry at around 250 to 300 million per year.

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