Planning for the worst

In focus As well as taking out a comprehensive insurance policy, intrepid travellers should arm themselves with as much information as possible.

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Being kidnapped is every traveller's worst nightmare and recent high-profile cases, including the murder of Edwin Dyer in June, will have discouraged many tourists from visiting such remote destinations as Mali in western Africa, where Dyer was captured by Islamist militants. The British national was returning from the Festival in the Desert when he was kidnapped along with five other tourists near the border between Niger and Mali in January.

"From the point of view of travel and tourism, especially tourists who want to go off the beaten track, you need to keep your eyes open," says Mark Harris, the global team leader of ASI Global, a firm that specialises in emergency response services. He points to a rise in hostage taking for financial gain and an increase in kidnapping by insurgent groups for both financial and political reasons. Research by Control Risks, a risk consultancy that analyses trends in kidnapping for ransom and provides information to insurance brokers, found that incidents of abduction have increased around the world. Africa and the Middle East accounted for 18 per cent of kidnapping cases worldwide last year, up from three per cent in 2003. Another recent development is the hijacking and ransom of mainly commercial ships off the coast of Somalia. However, despite the many headlines about piracy, political instability in Pakistan means that it leads the world in kidnapping-for-ransom countries (see table below). Six years ago, kidnappings in Asia and the Pacific accounted for 19 per cent of cases; last year, the figure rose to 34 per cent. The majority of all kidnappings, however, still occur in South America, where criminal gangs in Mexico, Brazil, Colombia, Ecuador and Guatemala abduct wealthy local people for ransom.

Given the statistics, it is not surprising that business in kidnap and ransom insurance is booming, according to Guillaume Bonnissent, a kidnap and ransom underwriter for Hiscox, a specialist insurance firm. Other insurers who specialise in this field include Chubb, AIG and Travelers. Kidnap and ransom insurance, or K&R as it is known, is commonly bought by corporations operating in politically unstable regions; for example, oil companies such as Shell, which operates in Nigeria, or international media organisations which send correspondents to volatile locations such as Iraq.

Bonnissent says it is still rare for travellers to buy K&R policies because most holidaymakers avoid places where there is a high risk of kidnapping. The murder of Dyer was "really surprising - it was a unique case," he says. Anthony Kaye, the managing director of the insurance broker Campbell Irvine, says the firm's kidnap and ransom insurance is bought almost exclusively by companies. "Lots of tourists are asking for it," he says. "But the trouble is, when the price is quoted it does not tend to be a viable option. It's a prohibitive cost - it would cost a lot more than the holiday."

Tom Ellis, a partner at THB Clowes, a specialist firm, says that although the cost of K&R insurance is a "broad spectrum" depending on the broker, the location, and the individual insured, coverage can be bought for US$500 for a short trip in a reasonably low risk area. This would give an individual insurance cover worth up to $250,000. At the other end of the scale, K&R insurance can cost tens of thousands of dollars for cover in high risk areas worth up to $5 million, for example. Ellis points out that because the sum insured is the ransom amount, which must be paid upfront by the individual or corporate policy holder, it cannot be greater than the policy holder's income or assets.

Although $500 may seem a relatively low cost, Ellis says tourists do not generally ask for K&R insurance. "It's not their top priority," he says. "They'd rather put the $500 towards the cost of the holiday." Seventy per cent of kidnappings are resolved through payment of a ransom according to Lloyd's of London, the UK insurance market. Kidnap and ransom insurance operates as a reimbursement policy - if a ransom is demanded, the insurance company does not pay the money upfront; rather, it will reimburse the sum or if it is lost in transit. The policy also covers a whole host of costs, such as medical expenses, counselling and any loss of earnings, if required by the victim. Above all, however, what policy holders pay for is expertise.

Hiscox works with Control Risks, which employs consultants who are usually deployed to the scene of a kidnapping within 24 hours. They help negotiate with kidnappers and liaise with the relevant authorities - even the media. "The ransom is a small part of it. The additional [expertise] represents quite high costs," Bonnissent says. ASI Global has nine consultants drawn from a broad background, including the military, government and law enforcement. What they all have in common is experience in crisis management, local knowledge and interpersonal skills - the art of calm persuasion is a key skill of a hostage negotiator, Harris says.

Travellers can stay safe without a team of specialists at the end of a telephone if they travel with a reputable tour company. Tour operators can be "an invaluable resource when things go wrong", Kaye says, adding that they can help ensure that a trip goes right thanks to the fixers they employ who have local knowledge. "If you've got the right person with you, you're far less likely to run into trouble."

Tim Best, the managing director of Tim Best Travel, organises tours to the Festival in the Desert in Mali, among other out-of-the-way destinations. Although he has been organising tours in the region for five years, he still relies on the UK Foreign and Commonwealth Office (FCO) advice. "If the Foreign Office says don't go, we don't go," he says. In January, Best received news of a kidnap threat in Mali, just as a tour group arrived in Timbuktu. "We stopped the group there and we produced an alternative itinerary," he says.

Reputable tour operators do advise clients to take out travel insurance. "Clients are responsible for obtaining their own insurance and we insist [that they] travel with it and provide us with the details. We help them with talking to the agents and suggest good brokers," says Sally Walters, the general manager of Steppes Travel, a tour operator. It is here that your own research can help to ensure your safety. You should also look for evidence of local knowledge from your insurance provider: ask who organises medical treatment, for example, and check if the organisation has expertise in dealing with emergencies. Find out whether they know where the local hospitals are. In some countries such as Thailand, hospitals will only deal with the local agent of an insurer, who must often pay upfront for any medical care received.

Wherever you are travelling, it is possible to obtain insurance cover that will ensure you have the widest possible safety net. Even in parts of the world deemed dangerous, such as Afghanistan, it is still possible to get cover for some types of incident. So, for example, if you break your leg while getting out of bed in Kabul, you will be covered. If you travel to a border area, however, and are assaulted or kidnapped, you will not be covered under a UK insurance policy as the FCO has warned travellers about the likelihood of such scenarios.

"[The policy cost] is not necessarily prohibitive," says Kaye, who cites destinations including Yemen and the north-west frontier of Pakistan as being at the "lower end of the risk spectrum", as opposed to remote areas of Colombia, for example, where kidnapping is rife. "There would be a very competitive premium charged when compared to regular travel insurance," he says. "The moral is, you get what you pay for."

For obvious reasons, war reporters and aid workers working in volatile locations have more extensive insurance - an option for the most adventurous - but finding such cover can be difficult. "It's rare and harder to get, but a decent broker will be able to arrange it for you," says Kaye, who cites Lloyd's of London as experts in this area. For both types of coverage, you will be asked by your insurer to provide a full itinerary and you should make sure you read the small print to understand where and what you are not covered for.

As well as taking out a comprehensive insurance policy, intrepid travellers should arm themselves with as much information as possible. The FCO website is a good source of advice, as are reputable news sources, such as the BBC and CNN, says Harris. Companies such as Control Risks and ASI Group regularly produce reports and advice on kidnap and ransom that are free to download (see below). There is some good news: abductions are rare. ASI Global estimates that 15,000 people (not just tourists) are kidnapped around the world each year, compared to the 924 million tourists that travelled last year alone.

Ninety to 94 per cent of kidnapping cases are resolved successfully, according to Harris who has personal experience to draw on. In 1992, he was serving in the British Army in Cambodia, working for the UN, attempting to engage the Khmer Rogue in the peace process. He was taken hostage along with three other people. "We were going to be executed," he says. "But we remained calm and engaged the kidnappers in dialogue." After eight hours, the group was freed. "I wasn't frightened. It was a situation that had to be dealt with."

Don't be fooled into complacency, though, for as Harris points out, even the most comprehensive insurance "does not make you fireproof". Far better, he says, to remain alert. [e-mail]