Kidnap & Ransom
Healthy appetite in the London Market
There is good appetite in the London Market for Kidnap & Ransom (K&R) risks, with ten main markets writing lines of USD 20-50m. We are seeing some appetite restrictions for Haiti, Ukraine, and Russia but there are still opportunities in the market for these territories albeit with potential sub-limits imposed.
Changes in policy terms and conditions
In the Crisis Response Consultancy product space, we have seen markets adapting their offerings to clients, with revised extension wordings tailored to industry specific issues.
Notable claims
Threat and extortions remain a significant claims area under Special Crime policies, alongside the traditional kidnap claims. We are also seeing a continuing claims trend around emergency evacuations. This is an area we will have to continue monitoring closely, not least because of the evolving conflict in the Middle East that resulted in the FCDO issuing a recommendation on 4th of August to leave Lebanon.
Geographic/sector differences
We are seeing reduced appetite amongst some markets for risks in Haiti given the current security situation in the country. Likewise, underwriters are still imposing coverage restrictions/sub-limits for risks related to Russia and Ukraine. Nevertheless, there is still underwriting capacity available for these territories.
We recommend clients to look at their security risks from a holistic perspective.
Outlook
Expected range in rate changes for the next 6 months for claims-free portfolios
Rates will depend on the type of risk exposure and industry sector. Because there is capacity available in the market we are not seeing this uplift on all accounts.
Expected capacity change in the next 6 months for claims-free portfolios
The K&R market remains relatively soft and we expect that capacity and appetite will remain stable. Geographically it depends on how the security/political situation evolves in different countries as sudden changes can trigger coverage restrictions in a similar way as seen in Haiti, Russia and the Middle East.
Expected coverage change in the next 6 months for claims-free portfolios
The political and security situation in a territory can deteriorate quickly. This usually results in underwriters introducing sub-limits or exclusions, but the amplitude will depend on the nature of the change and market appetites vary. The K&R market is used to sudden changes in the security environment, so markets tend to remain resilient.
There is good appetite in the London Market for Kidnap & Ransom (K&R) risks, with ten main markets writing lines of USD 20-50m.
Emerging risks
Because of volatile geopolitical situations in some territories, we are seeing rising interest from clients in utilising response providers from the policy for a wider range of security related perils. Crisis response consultancy products/extensions are therefore becoming increasingly popular. Meanwhile, active assailant types of risks are no longer restricted to the US but are spreading in many jurisdictions with stabbings in Southport in the UK and Westfield Bondi Junction in Australia just two recent examples. This is driving clients to increasingly look at the insurance solutions available for such incidents.
Renewal recommendations
We recommend clients to look at their security risks from a holistic perspective. If you have concerns over areas/scenarios which may not be covered under existing programmes we can help to facilitate solutions across the crisis management product lines.
For further information, please visit the Lockton Specialty page, or contact:
Helen Sandford
Head of Special Crime
E: helen.sandford@lockton.com