The sad news last week of the kidnap-murder in Pakistan of Wall Street Journal reporter Daniel Pearl underscores the inherent risks facing journalists reporting from overseas. Many believe Pearl’s death will prompt many news organizations to follow the lead of multinational businesses that routinely purchase kidnap and ransom/extortion insurance as a hedge against similar tragedies.
Firms offering this specialized insurance include AIG, Chubb, Liberty Mutual, Lloyds of London, and Strategic Underwriters International. In return for a hefty premium, these companies pay out as much as $40 million if an insured party is kidnapped or extorted with the threat of injury, abduction, property damage, product contamination, a computer virus, or the revelation of company trade secrets.
If a client falls victim to kidnapping or a ransom demand, an insurance organization will often turn to on international consulting company skilled in responding to a crisis event. New Jersey-based Strategic Underwriters, for example, relies on Control Risks International, a Northern Virginia firm whose exploits inspired the film, “Proof of Life.”
Professionally, I’ve only had two occasions overseas when I feared for my life: The first, in West Africa, when the president of a military government refused to let me leave the country until I handed over a recording of our interview (he had second thoughts about some of the things he said); the second, in southern Algeria, when my driver got lost in a portion of the Sahara sowed with millions of uncharted landmines.
However, my greatest risk of losing life or limb — I learned belatedly — was in Russia.
In the summer of 1999, my newspaper assigned me the daunting task of trying to make sense of the country’s hopelessly broken economy. Shuttling between Moscow and St. Petersburg, my Russian interpreter and I interviewed dozens of business leaders, economists, accountants, lawyers, and politicians.
A month into my assignment, the president of a zinc smelting company asked me to his office for a meeting. The request was unusual in two respects: First, because we usually initiated interview requests (most of the Russian businesses we contacted turned us down) and, second, because I was instructed to “come alone.”
Curiously, my Russian interpreter offered to wait with me in the hotel lobby for the arrival of zinc company’s car and driver. After I returned safely (the company president, a former KGB officer, was looking for a biographer), I learned why my interpreter insisted on escorting me to the lobby: “You might have been kidnapped,” she explained. “So I wanted to write down the license number of the car.”
“Seventy percent of companies located in Russia have faced extortion demands in the last five years,” notes a recent report by Strategic Underwriters. “Kidnap demands of up to $100 million have been made in recent years in Mexico, Argentina and Costa Rica”. The Times of London reported 12,500 kidnappings worldwide in 1996.
Thirty-eight percent of those were expatriates. The number of kidnappings has doubled in the last five years, with only one out of ten kidnappings ever becoming public knowledge. “The Russian Mafia, which has gone so far as to use a submarine to try and kidnap a Swedish industrialist, is exporting organized crime on an unprecedented scale. Kidnapping is common in Colombia, Brazil, Mexico, Ecuador, Guatemala, and the Philippines.”
An insurance executive, speaking to Strategic Policy on condition of anonymity, sees the risk of kidnap or paying ransom as a regrettable price of conducting business in an increasingly globalized society. “Global trade means more and more business transactions are being made in countries which have distinctly different political and security situations,” says the executive. “As the Danny Pearl episode underscores, political unrest and other factors has caused the threat of extortion or kidnapping to be an extreme and unfortunate risk of doing business — whether its gathering facts for a media organization or making soft drinks.”
Mayer Nudell, a security consultant who once worked for the US Department of State, agrees.
“If (media organizations) haven’t been getting kidnap and ransom insurance all the long, they sure are doing it now. Risks like one that Pearl fell prey to are something that journalists have been exposed to for a long time, and will face increasingly in the future.”