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Dan Reynolds

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at

Insurance Industry

The Spirit of Giving

An insurance carrier partners with an international foundation to save lives and build community in Central Uganda.
By: | October 15, 2014 • 7 min read

By September of 2013, Aspen Insurance CEO Mario Vitale was a 37-year veteran of the insurance industry and a successful one at that.

All it took was one week visiting the village of Kiwoko, in Central Uganda for Vitale, back at home in New York, to wonder what he was doing with his life.


“I remember putting a tie on and looking at myself in the mirror and somehow everything I do every day, which I love — the insurance business — didn’t seem as important anymore,” Vitale recalled.

That September, Vitale had acted as the lead ambassador for a group of Aspen staff members who visited Uganda as part of Aspen’s work with the ISIS Foundation.

The Foundation originated in 1998 with the goal of bringing medical and educational support to poor villages in Uganda and Nepal.

Every year since 2007, Aspen Insurance has made contributions to the ISIS Foundation and a group of “Aspen Ambassadors,” numbering between seven and nine people, visits Kiwoko and spends time getting to know the village members Aspen’s contributions help to support.

Video: This video from the ISIS Foundation describes some of the work it has done in Nepal and Uganda.

To date, Aspen has contributed a substantial amount to the ISIS Foundation’s efforts in Uganda. Of which, $640,000 has come directly from Aspen employees in the UK and the United States.

“The Aspen-ISIS Foundation partnership is unique in the financial services sector, both in its depth of engagement with local communities and in the degree to which it has become embedded in Aspen’s corporate culture,” said Anubha Rawat, communications and partnerships director for the ISIS Foundation.

“It has shown us the exponential power of linking the business sector with those in need in the developing world,” he said.

It’s not easy for Westerners to visit Uganda and keep their emotions in check. Although discouraged, tears are commonplace as insurance sector employees used to living in relative comfort confront the harsh conditions Ugandans live in.

During his week-long September trip, Vitale visited the neonatal center and maternity ward that Aspen’s support has made possible. He played with the village children, participated in daily prayers and otherwise immersed himself in a culture that almost automatically becomes beloved to those Aspen staff members that visit there.

“Nothing prepared me for the fact that this was really Ground Zero for the worst and the best of everything.” — Mario Vitale, CEO, Aspen Insurance

All in all, he said, he came away a changed man.

“Nothing prepared me for the fact that this was really Ground Zero for the worst and the best of everything,” he said.

By the best of everything, Vitale meant the boundless hope that Ugandans bring to their daily lives.

“I’ve never seen so much hope. They call Uganda the Pearl of Africa, and I think some of it has to do with the spirit. The spirit of the people is one of hope,” he said.

By the worst of everything, he meant the poverty and health challenges Ugandans face.

Those include high infant mortality and the ravages of more than a million citizens infected with HIV.

Expanding Crucial Medical Services

The Kiwoko Hospital started as a clinic under a tree in 1986 by an Irish missionary, Ian Clark, in the aftermath of one of Uganda’s devastating civil wars, which killed and displaced hundreds of thousands of people.

The hospital is now a 25-acre compound employing more than 350 staff, with 270 patient beds and offering medical services to a region of 500,000 people.


Funding from Aspen led to a three-fold increase in the size of the hospital’s maternity ward and its neonatal center.

When Aspen first started working with the ISIS Foundation, fewer than one-third of the prematurely born babies in the Kiwoko Hospital survived. Now, the survival rate of premature babies is more than 80 percent.

“We saw the babies,” Vitale said. “We got a chance to hold them and interact with them. And we got to meet the doctors and the nurses and the skilled staff,” he said.

“I walked back a different person.”

Aspen Insurance CEO Mario Vitale with some friends in the  village of Kiwoko, in Central Uganda.

Aspen Insurance CEO Mario Vitale with some friends in the village of Kiwoko, in Central Uganda.

Vitale likes to go on safaris, and when he traveled to Uganda, he brought with him a new set of clothing, boots and equipment with the intent to use them recreationally.

Once there, though, he decided to give them all away to the Ugandans.

“I felt guilty to own it and so I left it there in a basket. Nobody wanted to accept them. They said, ‘You can’t do this.’ I said, ‘Yes I can,’ ” Vitale said.

“I know that somebody there needed it a lot more than I did and there was no possible way that I could keep that stuff and leave there with a good conscience,” he said.

Taking Further Action

When he returned from Uganda, the first thing Vitale did was take a long, hot shower.

But then he started thinking about how he could involve others in the insurance industry to become involved with the ISIS Foundation and make a difference in East Africa.

Last October, Vitale and Aspen organized a black-tie gala fundraiser for the ISIS Foundation at the St. Regis Hotel in New York.

“We invited my friends in the industry, the brokers, the reinsurers, even competitors, and asked them to give generously to the cause and it was overwhelmingly supportive,” Vitale said.

The event netted more than $163,000 for the foundation.

Consider that in poverty-stricken Uganda, $4 buys a food package so that a destitute mother can feed her children; $75 covers a child’s school fees for a year and $50 pays for caregiver assistance for a child orphaned by HIV.

Aspen Re employee Susan Cannarella, who took an initial trip to Uganda in 2008 as an Aspen ISIS Foundation Ambassador, is now the largest individual contributor to the ISIS Foundation’s work with the Kiwoko Hospital.

Inspired by the need and her drive to help, Cannarella founded Beads4Dreams. The nonprofit buys paper beads from the Women’s Craft Group at Kiwoko and turns them into necklaces, bracelets and other works of art, which are then sold at craft fairs, church bazaars and the like.

As of the end of 2013, Cannarella’s nonprofit returned 100 percent of those proceeds to the people of Uganda, more than $63,000.


“As I sit here on the plane on my way home from Uganda, I am flooded with emotions ranging from great joy to deep sadness,” Cannarella wrote in a recent blog post on the ISIS Foundation website about her most recent visit to Kiwoko.

“I am very happy to be heading home as I have missed my family and friends, but at the same time, I am also sad to leave my new friends and ‘family’ from Aspen and Kiwoko Hospital,” she wrote.

Making an Impact

From its founding in Bermuda 16 years ago by Audette Exel, Sharon Beesley and a small group of friends and supporters, the ISIS Foundation has gone on to make an important impact in Uganda and Nepal.

It is a common practice in Nepal for child traffickers to trick parents in remote rural villages into sending their children away to what they believe will be boarding schools.

In 2006, the ISIS Foundation located 136 children in a basement in Kathmandu who had been trafficked from their homes in the remote mountain district of Humla.

The foundation initially found safe housing and rehabilitation services for the traumatized children.

Through a painstaking process, the foundation treated the children and worked around political strife in Nepal to return the children to their families by 2009.

In addition to the contributions of Vitale and Aspen, the ISIS Foundation connects to the insurance industry in another substantial way.

Audette Exel is vice chairman of the board of the Steamship Mutual Underwriting Association Trustee. Steamship Mutual is one of the world’s largest P & I (Protection and Indemnity) clubs for the shipping industry.

Video: Audette Excel talks about why she started the ISIS Foundation.

Her history in financial services is illustrious. Before establishing the ISIS Foundation, Exel was managing director of Bermuda Commercial Bank and one of the youngest women in the world to run a publicly traded bank.

During 1995 and 1996, Exel was chair of the Bermuda Stock Exchange and served a six-year stint — 1999 to 2005 — on the board of the Bermuda Monetary Authority.

In 1995, Audette Exel was elected a “Global Leader for Tomorrow” by the World Economic Forum. She has certainly lived up to that billing.

For more information on the ISIS Foundation and its supporting company the ISIS Group, including ways to contribute, click here.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at
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Upcoming Webinar

Webinar – Data at Work: Putting the 2014 WC Benchmark Study Results Into Practice

On Oct. 30, learn more from a 2014 WC benchmark study's architects about the complex challenges facing industry.
By: | October 1, 2014 • 1 min read




Webinar Sponsor

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Webinar attendees will receive a complimentary copy of the 2014 Benchmarking Study, which will be released in the coming weeks. Space is limited, so register today! Webinar Date: Thursday, October 30th, 2014, 1:00pm ET Webinar_YesAttendWebinar_NoAttend

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at
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Risk Scenario

Caught Out

A typhoon exposes the inadequacies of a U.S. pharmacy company's local insurance policies and hinders its move to Asia.
By: | October 1, 2014 • 9 min read
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

Good Morning Shah Alam

From his perspective in the third row, John Treme could make out the colorful costumes and motions of the dancers below him.


Treme, the risk manager for Vitalex, a pharmaceutical manufacturer based in Pennsylvania, was attending a performance of Joget Lambak, a traditional dance of Malaysia. The occasion was the grand opening of a Vitalex factory in Shah Alam, one of Malaysia’s manufacturing cities.

Normally, Treme wouldn’t be at an event like this. But he’d been conducting some business with a local insurance partner and happened to be in country on the event date: In other words, the timing was right for him to get a ticket.

Treme might’ve been feeling kind of lucky — but he didn’t.

To a focused, open observer, the movements of the assembled dancers and the music of their accompanying musicians were mesmerizing. John Treme, however, was a man easily distracted by his vivid imagination, combined with a razor-sharp memory that wouldn’t leave him alone.

Scenario Partner

Scenario Partner

As Treme watched the dancers, a strong, steady breeze, laden with moisture, passed through the performance space.

“Breeze … storm … tropical storm … typhoon.” Treme’s overactive mind skipped through the severity escalations unbidden. It was just what his brain did.

His brain also harassed him with the memory of his instructions from treasury when he’d been sent to bind the property coverage for the factory in Shah Alam.

“Just get us some basic property coverage with a local partner, we’ll let the global master property program handle the overflow if there ever is any,” the company treasurer told Treme at the time.

That put Treme in a tough spot. It went against his nature to not do as he was bidden. Still, the idea of “basic” coverage in typhoon country gave him the willy-nillies.

“What if something happens?” he asked himself when he couldn’t sleep at night.

“What if we get hit?”

“What are we doing in Malaysia in the first place?” he asked himself in his weaker moments.

He very well knew what Vitalex was doing in Malaysia.

The company had the right specialty with its focus on products in oncological medicine.

Pharmaceutical products in that area were high-growth. But sales in the mature markets like the U.S. and Europe were flat. If Vitalex was going to succeed in the highly competitive world of global pharmacy sales, it needed to move aggressively into high-growth markets like Asia and Southeast Asia.

It also needed to keep costs down, hence the treasurers’ concerns about what he perceived as duplicative or redundant insurance coverages.

A colorful flourish by one of the dancers and a particularly loud sequence from the Malaysian drummers brought Treme back into the moment; somewhat. He reassured himself by counting the offshore layers of reinsurance that Vitalex had on its master global program.

“We’re going to be okay,” he said softly, but still out loud. One of his co-executives looked over at him with concern.

As it turned out, John Treme’s worries were justified. It was really just a matter of time.

Eighteen months after the Vitalex factory in Shah Alam began production, Typhoon Ahayan roared up the Straits of Johor, packing wind speeds of more than 100 miles per hour. The typhoon slammed directly into Shah Alam, causing substantial wind and water damage to Vitalex’s new factory.

“How bad is it?” John Treme asked the plant’s manager, when power was restored sufficiently for phone service, two days after the storm.

“You better get over here,” said Smitty Fields, the plant manager.

A Mortal Blow

Due to a nice run of luck, Vitalex thought of themselves as the chosen ones due to their long string of uninterrupted business with no major property losses.


In placing the coverage for the Shah Alam factory, John Treme engaged in some fairly tense discussions with Terra Firma Ltd., a U.S.-based carrier with an A + rating, which had been on Vitalex’s program for years, long before John Treme came to work for the company.

The Vitalex facility in Shah Alam cost $250 million to build. Against some rather stiff resistance from the underwriters with Terra Firma and Vitalex’s broker, Treme prevailed in placing a $5 million property policy to cover the facility.

The reasoning from the Vitalex C-suite was that the company’s layers of reinsurance on its master global program were robust enough to pick up any slack should the Shah Alam factory suffer a sizable loss. And there was that aforementioned shield of good fortune the company deluded themselves into thinking would last forever.

John Treme was two hours back in country and in his hotel, preparing to visit the typhoon-ravaged Shah Alam factory when he got a disturbing text message.

“Please get here ASAP, I have bureaucrats on my back.”

It was from Smitty Fields.

When Treme got to the factory, the damage the facility suffered was clearly visible. Siding was torn off three quarters of the manufacturing space and parts of the roof appeared to be missing. And that was just on a cursory glimpse. Happily, or perhaps unhappily, some of the office space appeared to be functional.

There were two matching black SUV’s parked conspicuously near the front entrance. When Treme got to Smitty Field’s office, the men who drove those SUV’s were waiting.

“The cavalry’s here,” Smitty said with something resembling a smile when John walked into the office.

John barely had time to shoot Smitty a questioning look before Mr. Yei spoke.

“You are Mr. Treme, correct?” Mr. Yei said.

“Yes, I am,” Treme said. “How can I help you gentlemen?”

Mr. Razak consulted a file briefly before speaking.

“We work for Bank Negara Malaysia, the insurance regulator in this country,” Mr. Razak said. “We have questions about your coverage of this factory.”

“Like what?” Treme said, again shooting Smitty a look, which Smitty ducked.

“Who is your local carrier?” Yei said.

“Ungku Assurance,” Treme said.

“And your carrier in the United States?” Mr. Yei said.

“Terra Firma Ltd.,” John Treme said.

“If I may, gentleman, may I ask what’s going on here? We’ve got a severely damaged factory here and I need to get to work on the assessment and claims process,” Treme said.

“Yes, we think that is highly advisable,” Mr Razak said.

“We only have one question of substance for you today,” Mr. Yei said. “Although I think we are going to have more later,” he said unsmilingly.

“And that is …” Treme began.

“And that is …” Mr. Razak continued for him, holding out a document.

“Why did you arrange for only $5 million in coverage for a $250 million operation, that is, if your valuations can be believed,” Mr. Razak said.

“Gentlemen, we are very well capitalized company with substantial reinsurance protection on our global program,” Treme said.

“I don’t think there’s going to be a problem drawing down from our reinsurers to get this plant back up, if that’s what your concern is,” Treme said.

“I hope that’s the case because it’s of great concern that you have a gap in the tens of millions in your local coverage in all probability,” Mr. Yei said.

Mr. Razak jerked his head in the direction of the factory.

“The good people and the government of Shah Alam trusted that your company came here with good intentions, to do business and create local jobs,” Mr. Razak said.

“Your company’s failure to place adequate local coverage brings that premise substantially into question,” he said.

Minutes later, Treme stood with Smitty Fields, watching the two black SUVs wheel out of the storm-damaged parking lot.

“What do you think all of this means?” Smitty said to Treme.

“I’m not sure, I’m not sure,” Treme said. “I don’t want to think it, but we might be a little bit screwed,” he said.


Six months later, John Treme was on a conference call with his broker, Fred Tallex, and a vice president with Terra Firma, Suzette Pines.


“Okay Fred, do you want to take us through this?” John said to start things off.

“Sure,” Fred said, sounding like he was already mentally finished with the topic.

“Bank Negara Malaysia informed us yesterday that we are free to draw down the $40 million from Vitalex’s reinsurers to complete the factory restoration,” Fred said. “That’s the good news.”

“You all saw the email this morning,” Fred continued.

“Yes,” said Suzette Pines, somewhat tersely.

John didn’t say anything, yet.

“No one got fined, but the local regulators have got our brokerage and Terra Firma in their cross-hairs now,” Fred said.

“Sure looks like it,” Suzette said.

There was a long, awkward pause, which John attempted to fill.

“Well, we’ve only got a month or two to firm up the coverage on the renovated plant,” Treme said. “Can we get going on that?”

“Who’s we?” Suzette Pines said.

“Well, you’re our carrier in Asia,” Treme said.

“John, not any more we’re not. We have lost our appetite for this risk. A regulator that’s going to be in our grill all day long now will do that.”

“So you’re not …” Treme began.

“Sorry John, sorry but no way,” Suzette said. “No way if I want to keep my job and I do want to keep my job, such as it is,” she said ruefully.

“Guys, I’ve got to go, I need to pick up another call,” Suzette said.

“ ‘Bye Suzette,” Fred said.

Treme was too nonplussed to say goodbye.

“Now what?” Treme said to Fred after Suzette hung up.

“I really don’t know,” Fred said. “This project has so much stink on it I don’t know who we’re going to find and that’s not even bringing up price.”

“Well, can you …” Treme began.

“Yep, I’ll get started today John. You know we got reprimanded too,” Fred said, barely veiling his impatience.

“I know Fred, I know,” John said.

The business restoration delays suffered by Vitalex in getting the reinsurance draw down amidst the ongoing distraction of the investigation by Malaysian insurance regulators had severe impacts on Vitalex’s ambitions in Asia.

Vitalex suffered 14 months of business interruption due to the storm damage and the time needed to jump through regulatory hoops while trying to get the plant rebuilt.

A Munich-based competitor, Mayer Corp., which has a nimble, efficient manufacturing facility in Vietnam, was successful in taking substantial portions of the Asian oncology drug market that Vitalex was counting on as a difference maker.

Other markets might pay out like Asia had the potential too, but it would be years before Vitalex would be in a position to take advantage of them.


Risk & Insurance® partnered with FM Global to produce this scenario. Below are FM Global’s recommendations on how to prevent the losses presented in the scenario. These “Lessons Learned” are not the editorial opinion of Risk & Insurance®.

Six Dimensions of a Successful Global Risk Management Program

1. Breadth and depth of a network: Risk managers want a consistent level of products and hands-on services delivered as well as the ability to offer broad, compliant, on-the-ground coverage. They need to settle claims locally and they want their carrier to offer consistent performance in terms of policy documentation and contract certainty.

2. State-of-the-art global master form combined with broad “standard” local underlyers: The ideal global program matches local coverage and master coverage as closely as possible. This maximizes coverage in the local territory and the local loss payment. Should a loss occur, it can be paid with certainty at the local level.

3. Balanced global and local service: Most risk managers value consistency when it comes to certain important aspects of their program, including capacity, coverage, claims and the level and quality of key services they choose. Yet keeping local constituencies and decision-makers engaged (and happy) can be an equally important element of a successful global program.

4. Consistent loss prevention engineering service, protocols and deliverables: As companies expand their footprints overseas, they often find the challenges they face in understanding hazards and managing risks grow disproportionately.

Companies often discover the prevailing standards of protection and construction differ significantly from what they may be used to at home. Local codes may be lax or non-existent, often in regions that may be more prone to natural hazards.

5. Claims control and settlement via in-house claims adjustment network: One way of ensuring prompt claims service anywhere in the world, is by insurers recruiting, training and retaining well-qualified claims professionals with on-the-spot authority, who are located around the globe.

6. Success in the global arena: A successful risk management plan depends on a concerted effort from numerous parties, including underwriters, engineers, brokers, contractors and countless others who are integral to its success. Taking that same simple plan “global” means that extended communication lines, cultural differences, language barriers and time zones must be added to the list of challenges.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at
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