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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Special contingency risks: kidnap and ransom

Credit, Political Risk and Terrorism|Financial, Executive and Professional Risks (FINEX)

April 21, 2021

The special risks insurance markets continue to reduce their exposure to cyber extortion events.
Rate predictions
  Trend Range
Special contingency risks – kidnap and ransom: Increase (Purple triangle pointing up) -5% to +5%

Key takeaway

The special risks insurance markets are finalizing the removal of cyber extortion coverage from their policy forms.

The pandemic has so far not had a direct impact on this insurance sector, but it is changing the nature of the risk.

  • As restrictions and lockdowns have eased, the incidence of kidnap activity has returned to pre-COVID-19 levels in several countries. While the decline in international travel has led to a perceived reduction in risk, our data shows an increase in the numbers of local nationals kidnapped.
  • Moreover, criminals have continued to invest in schemes, such as virtual kidnaps (victims are tricked into believing a kidnap has occurred and pay a quick ransom), to exploit the current environment and maintain a cashflow to fund further illicit operations.
  • Cyber extortion has also continued unabated, as many technology-related crimes are not impacted by lockdowns or reductions in social and business interaction. Indeed, the steep rise in people working from home has presented cyber criminals a wider range of softer targets.
  • Many believe that the economic downturn and financial impact of COVID-19 could lead to increased security threats and higher rates of criminality globally as groups/individuals become more desperate.

Insurers are tightening policy language pertaining to cyber events that could be considered part of a ransom scenario.

  • Most insurers have now introduced blanket exclusions for cyber extortion, applying the exclusion on virtually all new and renewal business.
  • Those still offering coverage for cyber extortion are being very selective. Underwriters have strict guidelines for industries deemed more susceptible to cyber extortion threats. Coverage restrictions include:
    • Sublimiting coverage to reimbursement of extortion/ransom payment, adding annual or policy aggregate limits and sublimiting crisis consultancy fees and expenses
    • Excluding legal liability (i.e., judgement, settlement and defense costs)
    • Limiting or excluding reimbursement of expenses (i.e., forensic analysts, public relations consultants and legal advice)
    • Amending the “other insurance” clauses to clarify that coverage applies in excess of any other valid and collectible insurance
  • For those few programs that do not have a cyber extortion exclusion, very small limits/sublimits may apply to cyber extortion business interruption.

Interest in active assailant coverage is growing.

  • In addition to the traditional K&R policies, the special risks market continues to develop and promote policies that respond to a broader range of security-related perils.
  • We have seen special risks insurers, as well as other specialty insurers, show greater interest in active assailant coverage and offer increasingly customized solutions (either via endorsement or stand-alone policies) with a focus on post-incident crisis management support, legal liability, business interruption (as a result of both physical and non-physical damage) and indemnification of a variety of incident-related expenses.
  • These solutions go beyond traditional terrorism and/or political violence coverage and are increasingly being used to complement traditional policies.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


Philipp Seel
Special Contingency Risks, Inc.

Nicholas Barry
Special Contingency Risks, Inc.

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