Under new ownership, red24 continues to help expats and biz travellers in world’s ‘danger zones’
One of the realities of being an expatriate in 2017 is that the world is an increasingly dangerous place. Even once seemingly sleepy jurisdictions are increasingly fraught with tribal conflicts, the rise of religious fundamentalism, political instability, and a widening gap between the wealthiest and poorest citizens.
Terrorists meanwhile have begun carrying out attacks in cities that once might have seemed unlikely targets, such as Manchester, England, where 23 people including children and teenagers were killed while attending a pop concert earlier this year. Less publicised, but still taking place thousands of times every year around the world according to experts, are crimes such as kidnapping for ransom.
Here, Charlotte Beugge looks at how the little-reported acquisition last year of one of the best-known of a handful of companies that help to look after expats and business travellers in the world’s danger zones – red24 – has, if at all, affected the business and its range of services, some of which are offered by insurers including April International, Aetna and Allianz Worldwide Care to their own international clients, as part of their coverage.
For multi-national companies, non-governmental organisations and other organisations that routinely send staff into some of the most troubled corners of the globe, the threat of kidnapping for ransom or extortion has become a reality that has to be planned for, as it has now become such an established industry.
For such companies, the possibility that one’s employee might be kidnapped is, however awful even to think about, increasingly a potential threat to be insured against and the employee warned to prepare for, just as one might obtain critical illness insurance, or even ordinary health insurance.
Whether for economic reasons – ransom payments have become a source of income for some criminal gangs and terrorists – or for political or religious reasons, an estimated 20,000 to 35,000 kidnappings for ransom take place every year around the globe, of which about 5% involve expats, according to red24, the crisis management firm.
As reported here last year, red24 has estimated that more than 70% of kidnappings worldwide are never reported to the authorities.
Almost as little-reported as many of those kidnappings was the acquisition of red24 itself last December by an American company, iJET, for around £13.1m in cash. (At the time of the acquisition, red24 had been a London Stock Exchange-listed company, having posted a profit of £1m in the year to the end of March 2016, on revenue of a little more than £6.6m.)
A privately-held company itself, iJET is currently owned mainly by two private equity businesses, LLR Partners and Egis Capital Partners. It was founded in 1999 and, at the time its bid to acquire iJET became known towards the end of last year, had already become one of the States’ top providers of risk management packages for multi-national corporations.
Bedded in (and still acquiring)
Today, a little more than a year after iJET’s interest in acquiring red24 became officially known (on 1 August 2016) and not quite a year since the acquisition was formally agreed a few months later, the Annapolis, Maryland-based iJET seems to have largely completed the full incorporation of the red24 operations into its own, while retaining the red24 branding.
Both the red24 website and the iJET website make reference to the other entity while continuing to speak in their own voices, and the change also appears to have been taken on board by those red24 client companies that offer red24 services to their policyholders (and thus typically mention red24 on their own websites).
Indeed, iJET has even made another acquisition since its red24 purchase, that of the “Prescient Traveler technology and intelligence” operations of Prescient, a Chicago, Illinois-based compliance and risk mitigation company, in August. This acquisition of the Prescient technology package, iJET said, would enable it to “extend its integrated risk management platform by offering customers real-time incident reports and analysis, along with global, highly granular location-based risk data”.
Like this acquisition, iJET’s purchase of the red24 business was explained by the company as being driven by the advantage of being able to create a larger company that would be better able to reach and serve new as well as exiting markets, through the sharing of resources and intelligence.
Red24’s 100-odd staff, for example, pushed the total number of iJET employees to around 320, of which around 150 are based in that company’s Annapolis head offices.
Combined, the two businesses have an estimated 800 direct clients, plus “thousands” who access the iJET/red24 services through their insurance policies with other entities (as explained above), according to an iJET spokesperson.
Red24 has, the spokesperson added, already made its mark as “a great addition to iJET”.
One way it’s done this is by expanding the US-based iJET’s reach beyond its main areas of focus in the Americas.
At the time the iJET acquisition was announced last year, London-based red24 had operations in Singapore, South Africa and Hong Kong, which iJET management would have seen as a compelling argument for a tie-up. (The red24 offices in Singapore and London are being combined with iJET’s own outposts in those locations.)
Indeed, around the time iJET was reported to be buying red24, iJET president Bruce McIndoe was quoted by the Baltimore Sun newspaper as explaining that this geographic expansion was a key driver behind the deal.
“Our centre of the universe has been the Americas,” he explained.
“We’re building more depth, more breadth.”
Of particular importance to iJET, it would seem, would be red24’s South African operations, given that continent’s well-earned reputation for being dangerous, coupled with the sheer number of workers being sent there each year by multi-national corporations and aid organisations.
That said, as McIndoe was also quoted as noting, in an article published in Business Travel News in December, it’s not just Africa, but the world itself that is becoming increasingly perilous.
“The frequency and severity of incidents have been increasing year over year,” he said.
“It is the most dangerous time, and next year will be even more dangerous.”
At the moment, these are the places in the world where red24 says the risk of kidnap is highest:
Syria: Threat of kidnap ‘extremely high’. The ongoing efforts to contain the so-called Islamic state in this country is seen as meaning that foreign nationals – particularly aid workers and journalists – will begin returning to the country in greater numbers than are there now, which in turn could potentially lead to an increase in kidnappings
Afghanistan: An “extremely high” risk of kidnapping is seen here from criminal, militant and Islamic extremist groups. Aid workers, business, media and military personnel are the main targets
Pakistan: High threat of kidnapping is seen for foreign nationals, from criminal and Islamist/anti-western groups, particularly in the country’s northwest border regions. There’s also a kidnap risk seen in certain urban areas, including Karachi and Peshawar, for “high value” westerners
Yemen: Aid workers, diplomats and business people remain high risk targets for kidnappers
Eastern Malaysia and southern Philippines: Land and maritime kidnapping threat in the southern Mindanao region of Philippines, and the coastal regions of the Malaysian state of Sabah by the Islamic extremist group Abu-Sayyaf
Somalia: Aid workers and tourists at particular risk on the Somali-Kenyan border. Groups such as al-Shabaab can reort to kidnapping as a way of fundraising
Mozambique: A regular kidnap threat is seen in the capital Maputo and other urban settings. Much of the kidnapping threat here is seen as being for economic reasons; wealthy locals, South Africans and Portuguese expats are the main targets
Democratic Republic of Congo: Most kidnapping attempts here involve locals, but expats working for aid organisations and mining companies can be targeted
Venezuela: Political instability, corruption and criminal kidnapping syndicates are seen as heightening the risk here, particularly of short-term kidnapping in urban areas, where they are said to occur on an “almost daily basis”
Colombia: Kidnap for ransom and extortion by criminal gangs remain high – particularly for locals – although overall kidnapping rate has declined, thanks to a recent peace deal with the FARC leftist rebel group