
Kidnapping insurance keeps a lid on ransom inflation - thisisit
https://www.economist.com/finance-and-economics/2018/05/26/how-kidnapping-insurance-keeps-a-lid-on-ransom-inflation
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rdl
When I lived/worked in a high-risk kidnapping environment, I ever got K&R
insurance. What I wanted was "retribution insurance" \-- some plan which would
guarantee some people would investigate and kill everyone in any substantial
way affiliated with the kidnapping -- and to loudly communicate the existence
of this policy in advance. Being recovered would be great, but having
kidnappings deterred entirely would be even better.

US citizenship largely serves this purpose, at least if it's a high profile
kidnapping (which any kidnapping in Iraq/Afghanistan/etc. would have been.)

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jerguismi
I'm not sure if that would be an effective way to get kidnappings deterred.

There are varied policies on kidnappings, discussed here:
[https://www.npr.org/sections/money/2017/09/01/548032302/epis...](https://www.npr.org/sections/money/2017/09/01/548032302/episode-792-the-
ransom-problem)

Interestingly the "no ransoms" policy seems to be quite problematic.

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billpg
One thing I don't quite get...

Say I've kidnapped someone and the ransom has been paid. I could release the
hostage but then there would be someone with knowledge of my operation out
there walking about.

If I killed the hostage instead, I'll have eliminated that risk and I can keep
the ransom. It's not like anyone is going to sue me for not keeping my side of
the contract.

Maybe I'm going to get a reputation for killing hostages and people stop
paying ransoms, but then I'll just throw away that identity and give myself a
new name.

Any game-theorists wish to comment?

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verytrivial
Not a game theorist, but this is probably the same reason "ransomware"
actually does unlock your data if your provide the BTC -- if it didn't, people
would not pay. It's market forces at play and is what distinguishes organised
criminals from garden variety criminals.

(Sorry if that is stated in the article, but there is a pay-wall.)

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MaxBarraclough
But that assumes the kidnappers have a long-term game to play, and need to
worry about their reputation, no?

That will be the case at least some of the time, I suppose.

Also, some 'ransomware' never unlocks, even on payment. 'NotPetya' is the
famous one, perhaps there are others. A sufficiently spooked victim might
behave irrationally and fail to research the ransomware's track record before
paying up.

~~~
richjdsmith
It's not so much as worrying about their personal (gang, group, person)
reputation, but rather the reputation of kidnappers in general.

Kidnapping is a business. I would assume people who kidnap others do it more
than once. If you want your industry (kidnapping) to continue to exist/be
profitable, then would-be-payers must know that they are likely going to get
the person(s) back.

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MaxBarraclough
Then you have a prisoner's dilemma, no?

To the individual gang, wouldn't it be safer to 'defect'?

 _Edit_ or would it be more a tragedy-of-the-commons?

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jacobush
Don't you think that a big chunk, say a majority, of kidnappers would rather
not kill _anyone_ and also hold themselves in rather high regard, like "a man
of my word" and such things.

Maybe we could call "honor" a built-in game theory heuristic we humans have?
After all, we are hardwired to be social.

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MaxBarraclough
> kidnappers would rather not kill anyone and also hold themselves in rather
> high regard, like "a man of my word" and such

You're assuming a certain value-set here. If instead their highest value is to
appear ruthless to their peers (think prison, or for that matter the
Dothraki), then no.

~~~
verytrivial
Well, I think the only value-set they are disclosing here is their desire for
money. Assuming nothing "goes wrong", taking the money then reneging on the
deal will not get them any _more_ money, and may attract the interest of other
kidnappers who have a longer term view.

~~~
MaxBarraclough
> taking the money then reneging on the deal will not get them any more money

Unless they reason that killing hostages is safer than releasing them, on
account of 'no loose ends'.

> may attract the interest of other kidnappers who have a longer term view

Assuming a highly chaotic environment, this seems unlikely.

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21
Somewhat related:
[http://graphics.wsj.com/hostage/](http://graphics.wsj.com/hostage/)

~~~
girvo
They shot him a dozen times in the end. Man, when they’ve decided they want
you dead (which is what this guy wanted anyway, so no love lost here) they
really make sure don’t they!

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matte_black
Aw great, this is only going to cause MORE kidnappings since thieves will know
they can get insurance money.

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steve19
Before K&R insurers got together, firms and wealthy families were paying badly
negotiated sky high ransoms. Now professionals negotiators with ice running
through their veins negotiate much better "deals" and also reduce the risk of
death by two thirds.

Much lower ransoms should mean kidnapping is less profitable and so supply
should decrease (of kidnappings).

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ca98am79
if no one paid, there would be no more kidnappings for ransom

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girvo
The kidnappers can remain irrational longer than you can stay solvent.

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dbasedweeb
Maybe something like the Russian model makes more sense, if not legally. The
most deterrent response is to hunt the kidnapers down and exterminate them,
not pay them.

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jerguismi
Sounds like a great way to get the hostages killed at the same time.

Maybe it would work _after_ the kidnappers have been paid.

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baud147258
But if the hostage takers are dead and other potential hostage taker know
this, it would reduce the risk?

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vertex-four
Which is great and all, except now your family member is dead, which I’m sure
matters more to you than some game theory.

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DmenshunlAnlsis
The result of which is everyone is at more risk, including your family in the
future.

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Dowwie
What factors are considered in the risk models to price ransom insurance?

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Overtonwindow
Where there is kidnapping insurance, the kidnappers are going to know this in
advance, and everyone involved will be the same players over and over. It’s a
racket.

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eridius
Given that K&R insurance actually lowers the ransom amount, wouldn't
kidnappers be incentivized to go after people who _don 't_ have insurance
rather than people who do?

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bookmarkacc
Why go for an unknown amount of money when you can kidnap someone with a
guarnteed payout.

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chaostheory
Most places, where kidnappings happen often, have the same result: victims end
up dead regardless of a paid ransom and not notifying police. The only place
where most victims end up alive and unscathed once the victims' families pay
the ransoms is the Philippines. Not totally sure why. Maybe it's because most
of the kidnappers are professional soldiers instead of random gangs?

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robbiep
the article states the opposite: 9% of those who don't have K&R insurance come
to some form of grief vs. 2% of those with K&R insurance (worldwide stats,
assumably?)

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chaostheory
Maybe they also group this together with kidnappings by relatives for a
financial scam? That would explain better treatment in the stats. (imo this
should also be treated separately, though not sure when we don't have access
to the data.) On a related note, kidnappings in the West will also probably
skew the data since most of it is done by divorced parents who don't custody.
Rape also has a much larger stigma outside of the West. That aspect of the
kidnapping may be hidden due to culture.

I'm also very unfamiliar with kidnappings in India and the surrounding
regions.

I just know that the Philippines is special place when it comes to kidnapping;
victims were rarely harmed in any way as long as the ransom demands were met -
after negotiation of course. The exception happens when terrorists in the
southern most region are the kidnappers.

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sergiotapia
That website is TERRIBLE to read. Please fix your UX!

[https://streamable.com/q8xu0](https://streamable.com/q8xu0)

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hkchad
Just be happy you weren't on mobile trying to read that abomination of a
website.

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sergiotapia
I can't imagine haha - can you post a screenshot now I'm curious

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himom
Way back, I had an 18yo Colombian gf whom I considered visiting under the
assumption of buying reasonably-priced, short-term K&R insurance. At the time,
Colombia was the top kidnapping spot, more-so than anywhere in the Middle East
or Africa, because the FARC was funding their operations through drugs and
ransoms. Even though she lived in the safest and most protected area, there
was the risk of problems in transit in Bogota or Medellín, or merely visiting
anyone or traveling inland or at night. I strongly considered it given how hot
she was then, but then I met someone else whom I had more in common with and
no language barrier. Long-distance physical relationships might just be an
oxymoron. ;]

~~~
rdl
Seems like it would have been way cheaper to just buy her a plane ticket to
the US.

