| "Though we had been offering the K&R cover for the last three years, these were bought largely by multinationals whose employees travel to kidnap-prone countries. But since last three-four months, we have been receiving a lot of enquiries purely from Indian companies and high networth individuals (HNI) about the policy. The enquiries range from a sum insured of Rs four crore to Rs 20 crore," says Sushant Sarin, head-casualty, Tata-AIG General Insurance Co. |
| In response to the enquiries received by Tata-AIG, officials of the insurer recently made a presentation to Insurance Brokers Association of India (a body of 232 brokers) to popularise the cover in India. |
| Tata-AIG General offers the cover with the expertise of its foreign partner AIG, a global leader in offering K&R cover. |
| "Since corporates and potential clients reach us through brokers, we made a presentation to brokers briefing them about the product features of K& R cover," added Sarin. |
| "We are certainly witnessing an increase in curiosity level about this cover but it is too early to comment on how much of these enquiries translate into business," said Rakesh Jain, chief financial officer of ICICI Lombard General Insurance Co. |
| Under the kidnap, ransom and extortion cover, the risks covered may include ransom/ extortion payment, transportation and delivery of ransom including loss of ransom in transit, death or bodily injury, crisis management, negotiation services, emergency response helpline and related expenses, medical services and emergency, evacuation, psychiatric care, rest and rehabilitation expenses. |
| The coverage can also be extended to cover property damage, product contamination, extortion of trade secret etc. |
| The premium rate depends upon a host of factors such as threat perception, risk profile of the insured, locations and countries he travels to, occurrence of prior incidents etc. |
| So a person travelling to Venezuela will be paying a higher premium than a person travelling to Switzerland. The average premium is around $4,000 for an employee staying in India. |
| Indian insurers do not have the expertise to design and price a K&R policy and therefore seek expertise of an international reinsurer to offer quotations. In certain cases, the foreign partner of an insurance company has the expertise in offering the quotation such as Tata-AIG General. |
| K&R policy is issued in the form of codes with a lot of discretion. Only the top official of a company will know that a policy has been issued. |
| Insurers have a service arrangement with a specialist organisation (specialising in crisis management) whose job is to negotiate the ransom amount with kidnappers. |
| Before issuing the policy, experts study the clients risk exposure, suggest appropriate protection measures, and offer travel advisory. |
| "Impact of kidnapping can be enormous and needs to be handled in a sensitive way. Vulnerable companies are those that have employees based or travelling overseas or have high profile people handling cash, sensitive information and technology. We advise organisations to not overlook at these dangers," says Praveen Vashishta, CEO and managing director of Howden Insurance Brokers. |
| Questions that an insurance company will ask before finalising a proposal: |
| 1)Name of company with its subsidiaries. |
| 2) Limit of liability required for each incident. |
| 3) Aggregate death benefits per person and for each policy year. |
| 4) A part of the claim amount the insured is ready to bear also called as 'Deductible'. Higher the deductible lower is the premium. |
| 5) Business operation in various countries |
| 6) Total assettes |
| 7) Name of person/title/designation/networth of the person, residence, countries the person travels to and the average stay in these countries. |
| 8) Does the insured have security guards |
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