Kidnap and ransom insurance, once perceived as a product for ultra high net worth clients is now something financial planners with middle to high net worth clients need to be aware of when discussing a financial and insurance plan.


The global market for K&R insurance is predicted to grow by nearly 50 per cent over the next few years according to Cognizant’s 2015 white paper, as companies, families and individuals who work and travel in high risk areas look for peace of mind in case the worst happens.

Matt Davies, product specialist at Ingle International says there is a growing interest in all types of special risk insurance, including kidnap, ransom and extortion.

“This is due in part to high profile terrorist attacks and government warnings regarding the threat of kidnapping in numerous countries around the world,” he says.

With the recent economic downturn in Alberta, Nona McCreedy, owner of Aurora Underwriting Services in Alberta says they’ve seen many oilfield support companies use K&R insurance as they turn to extreme risk areas in Africa and Latin America.

Sophie Strezos-Egnatis, vice president, business development at Hunter McCorquodale, says they’ve seen growth of 68 per cent in premiums and 90 per cent by the number of policies, compared to last year.

The product

A typical K&R policy involves covering ransom payments, access to a crisis management team, negotiator fees, reward for information money, medical and psychiatric care and legal liability coverage.

Some policies offer optional extras such as cover for cyber-attacks. Speaking at a Toronto K&R insurance presentation in June, Mark Harris, vice president, crisis response services of Olive Group, says a client in South America was a victim of a ransomware attack and ordered to pay in Bitcoin for the company to access their files again.

“The response team took the client through a number of potential response strategies to the extortion. In the meantime, having analyzed the attack, they were able to advise the client on technical aspects and future prevention,” he says.

His team worked with their back up files and the software provider to get the system running without paying the extortion demand.

Some companies who offer K&R insurance include Aon, AIG, Aurora, Chubb, Hunter McCorquodale, Ingle International, Lloyds and RSA.

How can an advisor sell a K&R policy?

Hunter McCorquodale has worked with financial planners since 2011 due to growing demand in the financial planning space. Strezos-Egnatis says advisors are paid on a level commission, similar to other special risk products.

She adds that the Financial Services Commission of Ontario (FSCO) confirms it is compliant to sell kidnap and ransom insurance with a Life License Qualification Program (LLQP). 

Ingle International works with affinity organisations and their network of downline agents, financial planners and through referral. Davies says they provide advisors assistance through contact centres, an online agent portal, and travel insurance microsites for high-volume partners.

“While this type of coverage is often arranged by employers on behalf of their employees, it’s also available on an individual basis, including for people who are self-employed or high net worth individual/families not travelling for work purposes,” says Davies.

As the owner of an MGA, McCreedy says, Aurora only works with licenced retail insurance advisors.

“The retail broker will submit a K&R application; we take it to the markets with whom we have contracts. Once we have all terms back from the underwriters, we present them all to the broker to decide,” says McCreedy.