We know that our clients protection needs are often as complicated as their finance requirements. For example, ultra-high net worth individuals should certainly consider kidnap and ransom insurance. But there’s more to this cover than you might imagine, protecting you from a broad scope of insurable perils – we sat down with Lucy Higgins from JLT Specialty, one of the world’s leading specialist brokers of insurance, to find out more.
Kidnap and Ransom insurance for UHNW clients
JLT provides insurance broking, risk management and claims consulting services to large and international companies. Our success comes from focusing on sectors where we know we can make the greatest difference – using insight, intelligence and imagination to provide expert advice and robust – often unique – solutions. We build partner teams to work side-by-side with you, our network and the market to deliver responses which are carefully considered from all angles.
I work within JLT’s Credit, Political and Security Risks division where I focus on the ‘people’ security risks. With the security risks environment evolving so rapidly nowadays and with contemporary terrorism making a marked shift from property-focused terrorism to ‘people’ focused terrorism, it is essential to have a specialty broker that understands this diversification of risk and can ensure that our clients’ insurance coverage mitigates these changing risks.
What are the key services you offer to your clients?
We work with our clients from the outset to fully understand their security risk concerns whether in a personal capacity for their family or in a professional capacity for their most important assets – their people. With the support of our in-house security analysts, once we have identified these security concerns and potential exposures, we will find the best risk-transfer solutions in the insurance market.
Our services do not stop once cover is placed; instead we are committed to being at our client’s disposal to answer any questions regarding their risks, security training or their coverage. Should a claim arise, we are on hand to support the client through the whole process, explaining the insured coverage, collating claims data, negotiating with insurers on the client’s behalf and arranging settlement. This is also complemented by mid-term analytical reports and risk insights to ensure that our clients remain informed of market developments every step of the way.
Given that the market is changing so quickly with new insurable perils such as active shooter, hostage barricade and emergency evacuation, it is important to ensure that we partner our clients with the best insurers in the market who have a proven claims track record. As one of the key elements of this policy is in providing access to expert Response Consultants to support a client during a crisis, our role is further extended to ensure that we partner our clients with a suitable response team which has experience in the client’s countries of exposure. The ultimate goal is ensuring that our clients have peace of mind in knowing that should a crisis event happen, their policy will respond as anticipated.
With JLT’s extensive experience in this line of insurance as well as our significant market presence, we will leverage our position to deliver the best possible terms, coverage and claims response for our clients.
Who normally purchases this cover?
Interestingly, this is one of the few Insurance coverages which can be applicable for almost every individual, family or company.
Our clients consist of companies across all industry sectors worldwide as well as high net worth or high-profile individuals and families.
What are the most common misconceptions surrounding Kidnap and Ransom Insurance?
Unlike the name suggests, Kidnap & Ransom insurance actually covers a broad scope of insurable perils. The name for this insurance was born out of the Colombia-era FARC and ELN kidnappings in the seventies, however, with security risks globally having evolved significantly since this time and the scope of this insurance now goes far beyond simply kidnap-for-ransom and extortion insurance.
Currently, insurable perils include (but are not limited to): hostage barricade, active shooter, malicious detention (by legal government authorities or criminals), extortion (including product and cyber), hijack, child abduction, home invasion, political evacuation, natural catastrophe evacuation and pandemic/epidemic evacuation….
Cyber-attacks have been rife in the press of late and seem to be an increasing threat, what can JLT do to insure a client against a cyber threat?
As a specialist broker JLT has its own dedicated Cyber Insurance team who are monitoring this evolving risk and providing comprehensive and bespoke insurance solutions to our clients.
As the term ‘cyber’ is so broad and is rapidly evolving, it is important to highlight here that there are several insurance policies, outside of the specific cyber policy, which provide a small element of cyber cover. One such example is this Kidnap & Ransom policy which will provide an element of cyber extortion coverage in the event of a computer virus hack, malware or denial of access incident. So long as there is an accompanying ransom demand (for cash or in Bitcoin), the Kidnap and Ransom policy will trigger covering the ransom, relevant additional expenses, response consultants’ fees and expenses and Business Interruption.
Why use a broker? Why not go direct to the insurer and/or in lieu of insurance pay a retainer to a security firm for their services?
A broker works for the client, not the insurer. If a client goes direct, the client has to negotiate with the insurer themselves and the client might not have the market experience or relationships to know what coverage or good rates are available.
In the event of a complex claim, the broker can leverage their wider market relationship with the insurer alongside claims experience to negotiate a favourable claims outcome for the client. Without a broker’s backing, the client has less leverage to negotiate on a claim.
A broker has an overview of the wider market and can assess the changing rates, product availability and claims trends, thus allowing the client to make an informed decision on which insurer/ product is best-suited. Finally, a broker may have their own proprietary wording; this is drafted to the benefit of the Insured.
If you would like more information on JLT’s offering, or would like to speak to an expert about your circumstances, you can contact Lucy by visiting JLT’s website here.