US shift on families paying foreign ransom seen sparking interest in K&R cover

With US hostage policy expected to change to allow American families to pay ransoms to foreign kidnappers, interest in Kidnap & Ransom coverage looks set to increase.

Chris Arehart, global product manager for crime insurance at Chubb Group, said the government may hold firm on its stance not to pay ransom for hostages overseas out of fear of aiding terrorist groups, but it appears to be backing away from reportedly pressuring those who are trying to free family members from kidnappers.

“The most recent cases have highlighted this issue and the inconsistencies of the policy,” Arehart told Advisen from the RIMS Annual Convention in New Orleans. “No family should have to deal with bureaucracy at a time of personal crisis.”

Following the beheading of journalist James Foley by ISIS, the Obama administration last year ordered a study on its policy by the National Counterterrorism Center.

With public declarations in recent days from US officials that families will face no chance of prosecution for attempting to free loved ones from captors overseas, it allows these families—and businesses with workers in harm’s way—to seek K&R insurance solutions in order to get “qualified individuals to handle the case.”

“The focus on Westerners will continue to be an issue because they are valuable targets,” explained Arehart. The risk to kidnappers is low—rarely do they face prosecution of any kind—and the reward is high.

“A policy of this kind will give you access to experts and guidance to navigate the situation on their behalf,” Arehart said.

Businesses are likely to have an attorney on retainer to call for advice when a situation arises, Arehart said, and they should also have “precious access” to services when kidnappers threaten the lives of workers.