PLUS: Is the World a Risker Place?

While former British Prime Minister Tony Blair may have been the most prominent speaker at the 24th Annual Professional Liability Underwriting Society International Conference in San Diego earlier this month, it was the panelists at various sessions who had some of the most interesting, and in some cases worrying, things to say.

Did you know that 86 percent of corporate travelers believe their company is obliged to support them in the event of any trouble while abroad, and 50 percent of them would consider legal action if an emergency while traveling abroad were mishandled by their firm?

That’s according to Ricardo J. Cata, the regional managing partner and co-chair of the Latin American Practice Group. Cata was on a panel titled “Border Tensions: Executive Liability in an Age of Political Unrest,” which focused on kidnap and ransom insurance.

Cata’s figures become less mundane when you realize worries about trouble abroad are entirely justifiable.

Among the heightened risks of employees being kidnaped and ransomed are continued unrest in the Middle East following the “Arab Spring,” and piracy, which was up 28 percent in the first half of 2011 compared with last year, according to Daniel Wahlig, senior consultant of global services for Los Angles, Calif,-based Control Risks.

But it’s not just political upheaval and opportunists on the high seas that have made it a risker world to live in. Employees traveling abroad can expect increased threats in places Latin America, Southern Africa and areas of Asia, according to panelists. Even neighboring Mexico is seeing more of these types of threats with what’s known as express kidnapping, in which abductors hold victims several days, but instead of ransom demands, they take the victim to automated teller machines and have them withdraw their max daily amount.

Such activity has driven insurers to examine risks more broadly, said Jeremy Lang, vice president and manager of U.S. kidnap and ransom for Bermuda-based Hiscox. “What we’re seeing is a complete evolution in what a K&R policy is,” he said.

It begs the question: “Is the world becoming a riskier place?,” which was posed by Insurance Information Institute President and Chief Economist Robert Hartwig during his talk at the annual conference (read the full story on Hartwig’s speech on page 18).

“The world is nowhere near as risky as it has been,” he said, pointing to the 1300s as bleak example of a riskier time in human history, when life expectancies dropped to as low as age 24 for males, due lagely to the “Black Death” pandemic.

Thank you, Dr. Hartwig, for always looking on the bright side of life.