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Comment by Overtonwindow | Hacker News Reader

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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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?

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

Except the insurance policy on a person is cancelled if word gets out that they have it.

Wouldn't certain class of people have a greater propensity of buying this type of insurance. Probably some decent overlap with the kinds of people kidnappers target in the first place?

That differential can be accounted for in the premium, either on an individually underwritten basis or averaged across the risk pool.

That's probably why some of the insurance policies require things like curfews and private security.

The war zone policies often mandated inherently unsafe things (movement only in high-profile armored vehicles, with light security, concentration of protected persons in specific places) when those things were actually by that time less safe than alternatives (low profile vehicles, dispersion).

Presumably these companies would be at a competitive disadvantage to insurance companies that are better at mitigating risk. How are they able to stay in business while requiring unsafe behavior?

Unsafe practice is probably cheaper and clients do not know any better - to them show of security is better than actual security.

That said, some unsafe practices as mentioned become the only choice - when you're high profile enough, obscurity will not work.

The insurance company is paying for the outcomes, not the security. The security is a condition of their coverage. They don't benefit from the cost savings, but they are hurt by the lack of safety.

Yes, the way the insurers do things was essentially due to "principal-agent" issues, difficulties enforcing standards, and some (related) regulatory issues. Still, it led to less safety.

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