Political Risks / Kidnap & Ransom

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• REASONS FOR COVERAGE AND SOURCES
• KIDNAP & RANSOM
• INSURANCE DEFINITIONS
• INSURANCE SOURCES
• OTHER RESOURCES / COUNTRY RISK ANALYSIS

Reasons for coverage and sources

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A firm may be exposed to loss from three broad categories of political risk: seizure of assets, currency inconvertibility, and interference with contractual performance. Through programs of political risk insurance underwritten by specialty companies, confiscation, expropriation, nationalization, deprivation and, in some cases, terrorists and war risk coverages may be written.

Companies that export can protect themselves against a range of political risks that may prevent or delay payment.  This arises when payment is not received as a direct result of a war in the buyer’s country, cancellation of a contract by the government of the buyer’s country, or when a government implements regulations which either prevent the export or import of the goods or prevent or restrict the transfer of hard currency from the buyer’s country.

Organization can also buy coverage for loss arising from confiscation or expropriation of property by a foreign government and loss due to a devaluation of currency.

Joint venture political risk insurance is available to protect a corporation participating in a joint venture in a foreign country against political risks.

Political risk insurance can be provided by private insurers or governmental agencies.

Kidnap & Ransom

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There are no standard policies. Every insurer offers different terms, with options, to meet a client's individual needs. And, as with other insurance, policy terms, definitions and exclusions differ widely. Programs can provide coverage to include:

1. Ransom Following Kidnap
2. Ransom Following Threat to Kill, Injure or Abduct (Extortion)
3. Ransom Following Property Damage Extortion
4. Loss of Ransom in Transit
5. Cost of Hostage Recovery
6. Fees for Medical and Psychiatric
7. Reward (Payment to Informants)
8. Accidental Death and Dismemberment

Insurance Definitions

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For definitions of various forms of insurance refer to Insurance Marketplace (Rough Notes)

• Products Extortion Protection

Insurance Sources

(General - Not necessarily accessible by TCIM)

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• Export Credits Guarantee Department  - U.K.
• Export Development Corporation - Canadian Government Agency.
• Export-Import Bank of The United States
• Indemnis
• Insurative
• Multilateral Investment Guarantee Agency - Investment guarantees against the risks of currency transfer, expropriation, and war and civil disturbance (political risks).
• Overseas Private Investment Corporation - Provides political risk insurance to U.S. investors, contractors, exporters and financial institutions involved in international transactions.
• Seitlin & Company Insurance - K&R specialists.
• Sovereign Risk Insurance Ltd. - One of the world's leading providers of long-term political risk insurance and reinsurance.
• Trans Canada Insurance Marketing Inc.
• William J. Sutton & Co. Ltd.

Other Resources / Country Risk Analysis

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• Africa Risk
• Asia Risk
• Axco - Global insurance market information.
• Control Risks Group
• Credit Insurance News
• International Intelligence Limited - Was founded with the aim of providing up to date intelligence by both technical and operational means worldwide.  International Intelligence Limited provide close protection and risk analysis services worldwide.  All of our staff are former British Intelligence or former SAS.  We have offices in both The UK and USA.
• Kroll
• Owens On-line - International credit reporting agency.
• Political and Economic Risk Consultancy, Ltd.
• Trade Risk Group
• Terrorism Research Center