Some companies, especially multinationals in Nigeria, are obtaining insurance for their top executives in case they are taken hostage as kidnappings soar in the country.
A report by SBM Intelligence revealed that an average of 13 people were kidnapped in Nigeria every day in the first half of 2021.
Business Day reported that as of June 2021, a total of 2,371 people had been kidnapped in the country.
Last week, gunmen who were thought to be terrorists attacked a mining site in Niger State’s Shiroro Local Government Area. They killed more than 43 people, including 30 soldiers and 7 mobile police officers, and took several people, including Chinese, hostage.
Managing director/CEO of Prorisk Insurance Brokers Limited, Gbenga Olawoyin confirmed the availability of the kidnap policies in the market
According to him, some underwriters are offering the product but it is treated with the utmost confidentiality.
“If my company gets the cover for me, it becomes risky when you let other staff know that I have it because I have become a potential source of money for the kidnappers,” Olawoyin said.
On what the claims experience has been, he said: “No insurer will share their experience with you because it is a business of confidentiality, and it’s not celebrated.”
What an underwriter can do is simply to increase the premium if it is too volatile or drop the cover, he said.
Managing consultant at Premium Debate, Chika Onwunali said kidnapping insurance could be supported because it benefits a risk-averse company or those in politics, as long as it does not raise the prospect of making kidnapping a big business.
Director of policy and registration at the National Insurance Commission, Leonard Akah also confirmed the existence of a kidnap policy in the Nigerian insurance market, saying: “Yes, a few companies offer it.”
SBM Intelligence, Lagos-based research and consulting firm, said that between June 2011 and the end of March 2020, there were 767 reported incidents of kidnap for ransom in Nigeria.
It said ransom estimated to be around $18.34 million was equally paid, adding that notable among the cases are that of the students of Government Secondary School, Kagara, Niger State; Government Girls School, Jangebe, Zamfara State; Federal College of Forestry Mechanisation and Greenfield University, both in Kaduna State.
The SBM Intelligence report estimated that families and affiliates of victims pay ransoms ranging from $1,000 to $150,000.