"Americans have a lot of enemies that are just now raising their heads," says Tom Clayton, senior consultant at Kroll Associates, a New York-based security consulting firm. "The carnage between Israel and Palestine rises by the day, and many Muslims blame Americans. There is no question that the risk of abduction and death is greater."

Borden says the kidnapping of executives for political purposes is statistically low when compared to overall executive kidnappings, which are spiking in Latin America and Asia. "About one out of every 50 kidnappings in the past 10 years has been for political detention," she notes. "But since our job here is to look out the windshield at what may be coming, a high-profile case like Daniel Pearl indicates some groups don't want money–they want to influence a government."

Often the demands made in such situations are so extreme or impossible–Pearl's kidnappers demanded the release of Pakistani prisoners held in Cuba–that the outcome is inevitable. "The motive here was to make a political statement by murdering a high-profile American journalist," says Peter Dobbs, an Aon managing director in London. "With America playing the role of global policeman, to overtly work for an American-branded company in a volatile region where there is evidence of anti-American sentiment certainly increases the risk of abduction and violence."

Targeting Symbols of America

Barry Mansour, the crime insurance underwriting manager at Chubb Specialty Insurance, a Simsbury, Conn.-based kidnap-and-ransom insurer, agrees: "If you are American, you are a symbol of America, and you are now a target."

Not that any of this comes as a complete revelation, as anyone can tell you who remembers the seizure of the U.S. Embassy in Tehran. Kidnapping for economic and political reasons has been a fact of life for a while. In the first 10 months of 2001, there were 521 kidnappings worldwide, according to Control Risks Group, a London-based security consultancy. Overall, between 1993 and Nov. 1, 2001, there have been 10,521 kidnappings worldwide. Keep in mind that these are just reported incidents of kidnappings–many companies prefer to keep such information proprietary.

By and large, these incidents end with the victim released relatively unharmed. Roughly 7% to 10% of captives die while in captivity, simply because the demands, typically a monetary ransom, have not been met. Often, the payment is furnished by a kidnap-and-ransom insurer, such as AIU, Chubb or Lloyd's of London, the original underwriter of the insurance and still the largest supplier. It is likely that The Wall Street Journal had such an insurance policy in effect when Pearl was kidnapped. Like most companies, Dow Jones, the newspaper's parent company, will not divulge whether it has the insurance, since that knowledge serve as an inducement to criminals.

Nonetheless, the Pearl kidnapping and similar abductions rooted in politics are more difficult to resolve than economically driven ones. "Most of the security professionals in this area will tell you they'd rather deal with a kidnap where a [monetary] ransom is demanded," says Sean Dunphy, vice president of political risk at Aon Trade Credit, a Chicago-based insurance broker. "At least then, there's a definable way to get the person back. When the motive is political or the demands are huge, like asking for $500 million, how do you meet them?"

The good news: Most kidnappings can be avoided. "Pearl was foolish to go off on his own like that," says Richard G. McCormick, vice president of Pinkerton Business Risks International, an Arlington, Va.-based security consultant. "As terrible as it turned out, he should have known better. But journalists think they can walk on water and are bulletproof."

Dobbs agrees the news media takes risks other industries would not. "Journalists place themselves in extremely dangerous positions, more so than the average corporate executive," he says. "It is very difficult for an American news organization to prevent their journalists from being abducted, since the precautions they advise may not be followed. They're warned of the danger, but they knowingly take the risk."

Nevertheless, there have been political detentions of American employees outside the news media, including indigenous workers, ex-pats and traveling executives. Mike Ackerman, a former CIA agent for 25 years and currently a managing director at security consultant The Ackerman Group Inc., recalls a series of political kidnappings in Lebanon in the early 1980s. "Some were killed, but many came back alive in the weapons-for-hostages deal worked out during the Reagan administration," Ackerman says. "These seem to come in cycles."

The 'Pentagon Gang'

So, are we entering one of those cycles? "Conceivably, the Pearl situation could propel another kidnapping, given all the publicity," he replies. "But you don't need to kidnap somebody to accomplish this. You generate the same buzz just as easily by gunning somebody down and issuing a proclamation."

"It's too early to tell," says Dunphy. "The regions to watch out for are Pakistan and the Philippines, particularly the Mindanao region." In January, two members of the so-called "Pentagon gang," a Muslim criminal organization that specializes in kidnapping foreigners in the southern Philippines, were killed when they tried to storm the house of Christopher H. Hubbard, Asia director for agriculture at multinational fruits giant Dole Food Co.

But Clayton from Kroll Associates warns that efforts by the U.S. State Department to make the foreign abduction of a U.S. citizen a federal crime may encourage additional political detentions of American executives. "The State Department wants the United States government to take a more active role whenever an American is kidnapped overseas," he says. "I can tell you if that happens, then any extremist group that wants the attention of the U.S. government need only go after an American executive. That concerns me. It could backfire and simply increase the risk of abduction abroad." At present, the executive's employer typically is in charge of negotiations with the captors, he notes.

Not that all purportedly political kidnappings are indeed for the cause. Many are cloaked in the rhetoric of politics, but are perpetrated for pure economic reasons. "Often, insurgent groups like FALC and the National Liberation Army in Colombia will tell an American company it has kidnapped its executives to make a political statement," says Dobbs, "when in reality it is all about money. These groups used to receive a lot of money from Cuba and the Soviets before the Iron Curtain fell, and now that that money has dried up they get it elsewhere– from the drug trade or kidnap-and-ransom schemes." And the business is a lucrative one and relatively safe since few kidnappers are ever ultimately apprehended.

"In Mexico, the kidnap industry is actually segmented–there's one group that does the kidnapping, another that holds the hostage and another that does the negotiating," says Chubbs' Mansour. Borden from AIU says her company has seen a "tremendous spike in kidnappings in Mexico City. We now require all corporate insureds that do business there or have employees traveling there to attend a personal briefing by our security consulting partner (Kroll Associates)."

The briefing is designed to help executives determine if they're being targeted. "We've resolved many kidnappings in Mexico over the years, so we know how these kidnappers work," says Clayton. "We know who they target and how, so we can train clients to spot what this surveillance will look like and how to react in a way that will obviate a kidnapping."

Employees can significantly reduce the possibility of abduction by constant vigilance. "You have to learn how to be inconspicuous," says Ackerman. "We train clients how to walk through an airport so as not to attract attention. We tell them if there is a commotion to head the other way and not, as is our natural instinct, toward it. When going to business meetings we tell them to dress down and not wear a beautifully tailored suit or display the corporate logo on their clothing, briefcase or overnight bag. They should refrain from using the company name, even at a hotel."

In most cases, victims "are doing something they shouldn't be doing or are in a place they shouldn't be in," says McCormick. "I've handled 113 kidnappings over the last eight years, and I can't tell you how many times people deliberately put themselves in dangerous positions, like an oil worker in Ecuador drinking in a bar he should have avoided at all costs."

Executives living in a risky foreign country should vary their routines. "Most kidnappings require surveillance–there is no such thing, for the most part, as express kidnaps," McCormick says. "The kidnappers have to know the best time to take you and where. If you change your route frequently, you throw them off, and they'll look elsewhere."

Borden counsels executives "not to flash money and to try to blend in. Learn about the culture you're entering." However, hiring locals as employees doesn't necessarily curb the incidence of kidnapping, "since in Mexico, for example, it is perceived to be less of a risk to kidnap an indigenous employee of an American company than a U.S. citizen," says Mansour. "They don't want to possibly bring American law enforcement into play. In Colombia, on the other hand, everyone is fair game."

Ackerman says prudence beforehand may be the best way to reduce risk. "I would tell companies operating in Pakistan or sending executives there to simply curtail it," he says. "Why send people into a place that is extremely dangerous?"

Following Directions

If kidnapped, an employee is advised to stay calm and follow instructions. "Pretty much do whatever the captors ask," Ackerman says. "Try to develop a human relationship with them. Do not assert your prerogatives, because frankly you don't have many. This seems easy, but executives are used to being in control. They tend to resist others' commands."

As for the 7% to 10% of captives who do not come back alive, most are not killed directly by their captors. "Typically, a pre-existing medical condition like heart disease or diabetes or a minor injury sustained during the abduction turns out to be fatal," says Dobbs.

The best guarantee of surviving is the payment of a ransom, though consultants say it is crucial to dicker over the sum to give the impression to kidnappers that they are dealing with professionals. As for the possibility of a Russell Crowe-type coming to your rescue, as in the film Proof of Life, forget it. Says Ackerman, "In the more than 100 kidnappings I've negotiated, only a few ended happily with an escape. That only works in Hollywood."

SURPRISE! K&R RATES INSURANCE CLIMBING

Interest in kidnap-and-ransom insurance is burgeoning in the wake of Sept. 11′s terrorist attacks. "We're seeing a dramatic increase in the purchase of this kind of insurance because of the fear factor alone," says Diane Borden, vice president of AIU Crisis Management, a New York-based kidnap & ransom insurer. "Inquiries have doubled and we're binding about a third of them as new clients."

Kidnap-and-ransom (K&R) insurance is not a new product. It was initially offered in 1932 by Lloyd's of London shortly after the kidnapping of Charles and Anne Lindbergh's baby by Bruno Hauptmann. At the time, the insurance was purchased primarily by wealthy families and by companies doing business overseas in dangerous locales. The globalization of industry in the 1990s fueled a corresponding increase in the number of K&R policies purchased.

The insurance is broad, covering hostage negotiating fees, lost employee wages, death and dismemberment, medical costs, rest and rehabilitation, family counseling, some legal costs and crisis management expenses, and, of course, the ransom, subject to the limits of the policy. The major underwriters are Lloyd's, AIU and Chubb Specialty Insurance. Premiums depend on the perceived risk: A company's geographic location, loss history (e.g., a previous kidnapping), number of employees in a particular area and the volume and duration of employees traveling, are all factors in the cost.

The limits of financial protection average $25 million, though some companies can put together $100 million of coverage and more by stacking the wares of different insurance providers. As for the cost of the policies, rates have gone up about 30% since Sept. 11, but no more so than premium hikes in other insurance lines. Says Borden, "The world is simply a more dangerous place."