I read with amusement your front page story on kidnapping insurance (“Kidnap cover sales double”, June 24). I liked the bit about cosmetic surgery also being covered — what sort of horrible twisted people are kidnappers?
The best part, though, was where the insurance company executive happily mentioned the claim ratio for kidnap insurance, which is “less than 10 per cent”. This apparently means that the company earns 10 times more in premiums than it pays out as ransom, reward and other costs. How safe — for the insurer. Bet they charge a fat premium.
Most such policies, the article said, apply in “dangerous” parts of India, especially the north-east and “Naxalite or terrorism-infested areas”. Some policies apply overseas, such as those taken by shipping companies who worry about Somali pirates.
But at a claim ratio of 10 per cent (and given a sum assured in the range of Rs 2-5 crore according to the article), it’s clear that not many of the insured company officials get kidnapped at all. And none of the insurance executives quoted in the article mention kidnap insurance for genuinely dangerous parts of the world where Indians now routinely go to do business — Afghanistan, Sudan, Nigeria, Burma, Australia, the USA....
Forget “Greed is good”, obviously “Fear is good” for business too.
G Niaz, Lucknow
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