Kidnap insurers eye sales as euro crisis bites

Thu Jan 17, 2013 7:45am EST
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By Myles Neligan and Jonathan Saul

LONDON (Reuters) - Insurers see opportunity to sell protection against kidnap risk in southern Europe, predicting that recession and social unrest triggered by the euro crisis will drive more abductions.

There is no evidence yet of an increase in kidnapping in crisis-struck Greece, Italy and Spain, but insurers are betting on an upturn which they think will increase sales of kidnap insurance, which reimburses ransom payments.

Their reckoning is that as economic upheaval widens the gap between rich and poor it will encourage crime as well as fuel a resurgence political radicals willing to take hostages.

In Italy, where kidnappings by the Mafia and radical groups marked the 1970s, the abduction near Genoa of construction boss Andrea Calevo, freed last month by police, stirred fears of new attempts - not just by organized networks, but by the kind of small-time opportunists who stand accused in the Calevo case.

"Certainly the high net-worth individual must be more of a target now in the current economic climate. We are going to look to market our products to those sorts of individuals," said Michael Sharp, an underwriter at Lloyd's insurer Beazley in London.

"In any place where there are financial problems we are seeing more disruption."

Greece, Italy and Spain have been suffering years of economic stagnation and rising unemployment that have led to protest in the streets and growing support for radical politics.

"It would be fair to say there is increased demand in southern Europe," said Will Miller of Special Contingency Risks, a unit of insurance broker Willis which specializes in kidnap cover.   Continued...

A parachute dropped by a small aircraft is observed by the U.S. Navy as it drops over the MV Sirius Star during an apparent payment via a parachuted container to pirates holding the Sirius Star off the coast of Somalia, January 9, 2009. REUTERS/David B. Hudson/U.S. Navy photo/Handout (SOMALIA).