In Argentina in the early 1970s, leftist guerrillas started snatching executives of multinational companies and demanding ransoms. This culminated in the payment of $60 million to the Montoneros, a Peronist guerrilla group, for the release of the brothers Juan and Jorge Born, executives at the grain-exporting firm Bunge & Born and the sons of its president. The ransom seems noteworthy for its heft—at about $275 million in today’s money, it stands as the largest one paid in a conventional kidnapping case. (In 2017 Qatar reportedly paid $1 billion to an al-Qaeda affiliate and Iran to win the release of a royal hunting party.) But perhaps what makes the Born case more unusual in the history of the ransom trade is the fact that Jorge himself negotiated the price while captive. He had intimate knowledge of the company’s finances and thus had a precise sense of how much money could be raised—though not, crucially, how much ought to be paid. The deal he struck was delivered to Born père, who had refused the initial demand of $100 million, as a signed memorandum.

As Argentine ransoms soared, insurers at Lloyd’s of London were beginning to rake in premiums from a peculiar product. Kidnap-and-ransom (K&R) insurance had existed since 1932—it was developed in response to the abduction and killing of Charles Lindbergh’s twenty-month-old son—but it didn’t take off until the 1960s, following a series of kidnappings of businessmen and their families in Europe and Latin America. Companies started buying coverage for those employees most likely to be targeted, and the market boomed. Had Bunge & Born purchased coverage for the brothers, it would have been reimbursed for at least a portion of the payout.

But early K&R insurance had a notable flaw: insurers were not involved in the ransoming process. Families and employers were left to haggle with kidnappers, raise funds, and deliver payments; insurers simply paid them back. Of course, these distressed and inexperienced parties were “not in a position to strike the best deal,” writes Joel Simon in We Want to Negotiate: The Secret World of Kidnapping, Hostages, and Ransom, which includes a concise survey of the K&R industry. And parties who paid too much might be targeted again: in 1983 the wife of Teddy Wang, a Hong Kong property tycoon, paid $11 million for his return; in 1990 she paid $60 million—but that time he was not released, and his body was never found.

In the mid-1970s, Julian Radcliffe, a young insurance broker in London, helped fix this flaw. He came up with the idea for Control Risks, a security consultancy that, as part of the Lloyd’s K&R package, would advise policyholders on how to prevent…