This unusual and interesting article is a review of two books on kidnapping. These books are ‘We Want to Negotiate: The Secret World of Kidnapping, Hostages, and Ransom’ by Joel Simon and ‘Kidnap: Inside the Ransom Business’ by Anja Shortland. The article explains that not only is kidnapping a well organised, professionally managed business but the insurers who provide ‘Kidnap & Ransom’ insurance across the world also work as a tight knit group. Whilst the article does not talk about India, what we know about the big ticket kidnapping business in India tallies nicely with thrust of this article. Here a couple of the most interesting examples cited in this piece:
“In Argentina in the early 1970s, leftist guerrillas started snatching executives of multinational companies and demanding ransoms. This culminated in the payment of $60 million to the Montoneros, a Peronist guerrilla group, for the release of the brothers Juan and Jorge Born, executives at the grain-exporting firm Bunge & Born and the sons of its president. The ransom seems noteworthy for its heft—at about $275 million in today’s money, it stands as the largest one paid in a conventional kidnapping case. (In 2017 Qatar reportedly paid $1 billion to an al-Qaeda affiliate and Iran to win the release of a royal hunting party.) But perhaps what makes the Born case more unusual in the history of the ransom trade is the fact that Jorge himself negotiated the price while captive. He had intimate knowledge of the company’s finances and thus had a precise sense of how much money could be raised—though not, crucially, how much ought to be paid. The deal he struck was delivered to Born père, who had refused the initial demand of $100 million, as a signed memorandum.
As Argentine ransoms soared, insurers at Lloyd’s of London were beginning to rake in premiums from a peculiar product. Kidnap-and-ransom (K&R) insurance had existed since 1932—it was developed in response to the abduction and killing of Charles Lindbergh’s twenty-month-old son—but it didn’t take off until the 1960s, following a series of kidnappings of businessmen and their families in Europe and Latin America. Companies started buying coverage for those employees most likely to be targeted, and the market boomed. Had Bunge & Born purchased coverage for the brothers, it would have been reimbursed for at least a portion of the payout….
Around 90 percent of all kidnappings are successfully resolved, meaning the hostages return alive, usually through ransom—an “astonishing success rate,” remarks Anja Shortland in Kidnap: Inside the Ransom Business. And the odds are considerably better if specialists are involved: more than 97 percent of cases handled by professional negotiators are resolved successfully, almost always through ransom. (A small percentage of hostages escape and an even smaller number are rescued.) In almost all of these cases, the negotiators are provided as part of an insurance package, but if a victim is uninsured, they can be hired directly (the good ones for over $2,000 a day).”
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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.
