Category: Blog

The kidnapping, ransom and extortion threat faced by businesses operating abroad today has become not only common but also costly. Sometimes known as KRE or K&R, in many parts of the world criminals have become organized and even specialize in certain activities related to the crime.

The insurance industry has specific policies written to cover the kidnap and ransom threat. KRE insurance coverage became more well-known to the general public with the rise of piracy off the coast of Somalia and elsewhere about a decade or more ago. Private shippers began losing money through kidnap and ransom demands for cargo and passenger return.

In Latin America, KRE has been a problem for many decades. Government security statistics have included kidnapping and extortion since the 1970s. Worse, organized gangs who specialize in kidnap and ransom crimes have sprung up and become extremely capable. These gangs have compartmentalized themselves. One criminal segment specializes in the kidnapping. Another group gets paid by the kidnap specialists to hold the hostage. A third group has expertise in negotiating with the enterprise or family of the hostage.

Insurance policies vary, but a K&R policy usually has two main parts. The first part of the policy provides for funds to activate a team of K&R security experts to assist the company in coordinating the appropriate response among all parties (police, government, company and family).

The second part of the policy involves the actual ransom payment. The underwriters often suggest contracting for a policy that has large limits. It is not unusual for policies to cover multi-million or tens of millions of dollars per kidnapping.
Once you become aware that the missing and that extortion is the reason for the kidnapping, most companies will immediately seek the assistance of KRE security personnel. These K&R experts must be pre-vetted and on the insurers approved list of vendors before a company can engage them under the terms of the policy.

A typical KRE case lasts, on average over two years. Many go on for up to five or more years. The victim is usually released unharmed but the perpetrators often remain at large. Many companies and families prefer to pay the ransom knowing that the odds are in their favor that their loved one will be returned unharmed.

The length of time these cases take is due to several factors. Negotiations often take an extended period of time. The professional kidnapping and extortion gangs go to great lengths to ensure that the victim is sequestered in a safe location before conducting any actual negotiations. The criminal negotiators want to ensure their own safety and hence the back and forth can be frustratingly slow.

Once the negotiators have concluded a bargain, the actual exchange of money for hostages can also take a long period of time to arrange. Often the kidnappers demand that a third party act as an intermediary. Choosing and approving this person takes time too.

KRE is part of the risk associated with doing business in foreign countries. Companies must ensure that they not only have included K&R in their emergency plans but that they also have sufficient insurance to cover the often very costly expenses associated with successfully concluding a kidnap and ransom incident.

Monday, November 19, 2016: A person did drive a truck into a Christmas market in Berlin, killing 12 and injuring at least 50 people.

The attack is the latest in a series of incidents in Germany in the past months and years.

Recent incidents in Germany in the past couple of months include:

24 July 2016, an explosion in Ansbach killed the attacker and injured 12 others.

22 July 2016, a lone gunman attacked the Olympia shopping center in Munich killing ten people, including himself, and injuring a number of others.

18 July 2016, a man armed with an axe and knife injured five people on a train travelling between the towns of Treuchtlingen and Wurzburg.

The German police continues to monitor a number of individuals suspected of involvement in terrorist-related activity and have disrupted a number of terror plots by arresting several terror suspects i.e. in the Northern towns of Ahrensburg, Grosshansdorf, Reinbek … among others in Germany.

Germany has increased its security in the light of recent and past terror attacks.

When media is reporting about possible terrorist attacks in Europe, Germany is (always) among the countries mentioned as a possible target for the terrorists. This certainly should not be a reason to avoid travelling to Germany, but there are a few simple tips that can help you avoid getting caught up in a risky situation.

Keep up to date with the news, and travel warnings when you plan a trip to Germany. The German government does an excellent job of keeping travelers, visitors and people informed about possible increased threats from terrorists or other third parties.

If possible and appropriate, hire a professional and local transportation service, where the driver is security trained and speaks English or your mother tongue. In addition, it might be advisable to hire also a local and experienced executive protection service in Germany, which can assist in identifying risky areas in German cities, in order to avoid an increased risk or threat in visiting sketchy areas such as red light districts or areas with increased criminal activities a.s.o..

Make yourself familiar with the principle of HIDE – RUN – (FIGHT) – TELL … which is very useful during an active shooter attack and can increase the chance of survival.

Pay attention to your direct and indirect environment. Many times, a threat can be identified in advance, before getting too close to somebody.

From a security perspective it is also advised to stay away from public events such as concerts, Christmas markets, new years’ eve celebration and so on … but isn´t that what a trip to Germany, especially during Christmas time and at the end of a year, is all about?!

The German authorities maintain increased security measures as a precaution around the country, including at public buildings and transportation hubs. The German law enforcement and intelligence services are one of the best world-wide, no doubt.

Nevertheless, there is no and there cannot be a guaranteed “100% Security”: It is not the question if we will see another terror attack in Germany … it is more the question when will we see the next attack?

A very difficult question has been asked many times before:

Should we change the way we live?

Nobody can answer this question for another person.

Just one last thing … we all might have to adapt to certain best practice security principles and security behaviors in our day-to-day activities and life, in order to mitigate certain risks and threats … whether if we like it or not.

For many years’ wealthy families have only used “risk management” for their investment portfolio’s success and their insurance risk. One of the biggest risk for a wealthy family is loss of money, however “money” is so vague that it can be used in nearly any argument and topic. A wealthy person realistically should be worried about the following risks:

Cash Flow – A loss of cash flow due to decreased income because of a failing business, health care expenses or even familial expenses can cause a dent in the coffers of any family. For wealthy families this is often worse as the expenses are higher, so a big dip in income for a wealthy family could mean serious issues.

Property – Real Estate prices can fluctuate, property can be damaged and tenants could refuse to pay rent or you could be wealthy enough to be a target for robbery. These are all reasons as to why real estate is a risk for the wealthy person. Just like, cars, jewellery and even something such as trademarks, all forms of property can be stolen and damaged.

Personal Security & Personal Liability – As a wealthy person odds are a few people in a few circles will most likely know your name. This provides a great risk to your personal security. Minimizing your liability from your board of directors actions is also a major factor you will have to consider as you could be held liable for your businesses actions if you are not careful with a lawyer.

It is imperative that wealthy families identify the risks, assess their level of exposure to those risks and evaluate the cost and effectiveness of various prevention methods and mitigation efforts, as well as insurances that are in place.
Not all risks can be transferred through insurance for example, and because of costs involved it makes some sense to take actions to reduce exposure to those risks and identify if there is any part of the risk that can be transferred via legal loopholes for example.

Once risks have been identified, assessed and mitigated all other risks should be reviewed through insurance. By design insurance is used for low likelihood, high cost events. In order to prevent the most amount of risk through insurance it’s vital that you produce an ironclad policy and an expert to assess if the true risks are properly covered.
Financial assets are getting harder to protect, the management of risks require a detailed and thorough approach which will most certainly call for several advisors, insurance agents and attorneys.

It is important that wealthy families do not underestimate the risks that they might face from criminals … such as small-time criminals and organized crime. Risks, where insurance coverage cannot really help, could include but are not limited to blackmailing, bribery, kidnapping, theft, fraud and burglary. It is important to have preventive security measures and risk mitigation procedures in place, in order to be able to respond to upcoming threats quickly and in the most effective way.

First you have to understand that personal security and executive protection is a professional service. Having this said, keep your expectations realistic and do not expect “big muscle bouncer type” executive protection agents with dark sunglasses and with a headset for the radio.

Individuals and professionals trained to handle corporate executives, politicians, wealthy persons, high net worth individuals fall under executive protection or EP in contrast with those trained to handle celebrities, actors, musicians, professional athletes and other high-profile, public individuals are commonly referred to as being bodyguards or talent security.

In general, all qualified professionals are driven to be visibly low profile and are capable of adapting to and remaining as unobtrusive to your lifestyle and environment as possible.

There are several titles a professional may use in order to explain his job: executive protection, protective services, personal protection or personal security. In contrast, security personnel that is providing security services for celebrities, musicians and that type of clientele will most likely call themselves personal bodyguard, security guard, tour security or sometimes also guardian angel,

Like the American Secret Service and the German Bundeskriminalamt as well as the German Landeskriminalamt among other official protection units, the best individuals are proactive, clean cut, intelligent, articulate, educated professionals that are trained to prevent a threat to the clients welfare. There is no place for a “rambo”, “cowboy” or “terminator” in a professional executive protection environment. Contrast these specialists with the stereotypical “big muscle bouncer types” working for musicians, artists a.s.o.. Those “bodyguards” are only able to react to a threat and are usually working as bouncers in the main job and “sidelining” as a bodyguard and generally lack the specialized training.

Just because someone has been in the military, law enforcement or has worked overseas on a PSD – Protective Services Detail with a PMC – Private Military Contractor does not automatically mean they have the right mind-set, training or skill-sets to perform personal security in a most professional way in the private or corporate business sector.

Clients should make sure and have every candidate sign a NDA – Non-Disclosure Agreement before discussing any needs or providing any personal confidential information.

Clients should also look for specific experience, and ask for examples of how the candidate has demonstrated proficiency in specific skills. Just because somebody knows a lot about weapons and has a black belt in karate or kick-boxing does not mean that he or she is a professional executive protection agent. There is so much more …

Ask the candidate about “big name” clients he or she has protected so far. If a candidate starts revealing personal information it is very possible that he or she is violating non-disclosure and confidentiality agreements. As a potential client you also have to ask yourself: If he or she is doing such a name dropping, would he or she also use your name as a reference and share confidential details with third parties, in order to get a new job or to impress somebody? A very good question, isn´t it?!

Bottom line and quick summary:

– Do not pick the cheapest EP provider / offer … the costs factor should not be the main decision making point.
– Sign a NDA with the EP company before sharing any confidential details.
– Avoid “big muscle bouncer types” bodyguards, unless you are in the show biz and you need this for show purposes.
– Armed EP is an implicitness, unless it is not allowed by law.
– The EP agency should provide the client with all important documents such as EP license, liability insurance, concealed weapon permit a.s.o.

Very few people will even be familiar with the term HNWI or UNHWI, the differences are negligible. And, even fewer yet, will have ever been in contact with one or even be one themselves. UNHWIs or Ultra High Networth Individuals, meaning, in simpler terms, very, very wealthy people, will generally not be found in a local Walmart or Tescos.

In many cases, UNHWIs will be more or less completely removed from ‘commoners’ lives, and that is a fairly vital part of their security. With greed and envy being the most human of emotions, those who have a lot need to be wary of others taking it. This means protection. Protecting one’s belongings has been a concern for humans since we stopped living in caves and it hasn’t become any easier since then.

Nowadays, people hardly protect their own anymore, they hire others to do it for them. This can take the shape of security firms, individual bodyguards, security systems and all kinds of alarms. Naturally, the wealthier someone is, the more they have to protect, the more they need UNHWI Security.

The approaches to this particular branch of security (as with HNWI Security) are varied. There are standards, like cameras, that will be found in almost all properties, and bodyguards during high-risk events or in larger crowds, however even those aren’t guaranteed to be around. No, it is simply up to the individual what kind of security they go for.

UNHWIs will, as a rule, know enough about their personal situation to be able to make somewhat informed decisions and those who don’t will hire professionals to do it for them. Security is no longer a one-man-job, instead various people, organisations, and technologies will work together to protect the Ultra High Networth Individual.

Yes, to a ‘normal’ person this can seem fairly costly, and, in absolute numbers it often is, however compared to the risk of being robbed, kidnapped or extorted, it is a comparably small price to pay. Protection of assets as well as people is what allows UHNWIs to lead normal lives without needing to hide away completely.

Especially for those who have a family and children, wealth can become as much of a hindrance as an advantage children may feel ostracised and hindered in their daily lives by their parents’ security measures, taken as they are to ensure their safety. From a protection standpoint, being an HNWI is certainly not easy.