Risk Scenario

Shattered

A company’s failure to communicate important information to survivors in the wake of a deadly shooting exacerbates a tragedy.
By: | October 6, 2015 • 12 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.

No One Here Gets Out Alive

All is not well in the home of Gretchen and Peter Mansfield. Gretchen, 41 is a sales manager for Durham, N.C.-based pharmaceutical manufacturer BioRealm. Her husband Peter, 44, lost his sales job in mid-2015 and insecurity has been eating away at him.

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A big part of Gretchen’s job is working with BioRealm’s SVP for sales, Brian Hatch, 35. Fit, good looking and very well compensated, Brian is Peter’s current nightmare.

Brian and Gretchen spend a lot of time traveling together, sometimes staying in the same hotel for days at a time. Peter, always the jealous sort, stole Gretchen’s work email password long ago and has been following her every move.

He’s read emails between Gretchen and Brian that left no doubt in Peter’s mind they were having an affair.

The last straw was when he picked up a voicemail from Brian that went direct to Gretchen’s email. Hearing Brian describe what he’d like to do with Gretchen the next time he saw her sent Peter over the edge.

At 11:10 am on September 15, 2015, Peter parked his family’s SUV in the parking lot of the Durham location of BioRealm.

From the open windows of the car, Metallica’s “For Whom the Bell Tolls” was blaring.

Peter wore a two-day beard, but there was nothing else in his appearance to warrant alarm.

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As he walked to the front door, carrying a large black gym bag and a vinyl grocery bag, he caught the eye of Sandy Brick, Gretchen’s friend and coworker, whom he’d known for years.

Sandy always liked Peter.

“Hey Sandy,” said Peter with a smile.

He was in sales for years. He can do this.

“Hey Peter, what brings you here?” said Sandy.

“Gretchen forgot her lunch bag and her gym bag,” said Peter affably, smiling and holding up the gym bag as he did so.

He did this just as Sandy reached the front door. Not giving her action a second thought, Sandy swiped her security card to open the front door and allowed Peter in ahead of her.

“You know where Gretchen’s office is, right?” Sandy said.

“Sure I do,” said Peter with a smile that faded a little too quickly.

But instead of heading toward Gretchen’s office, Peter made a beeline for Brian’s office, in the opposite direction.

Peter half-jogged to Brian’s office pulling a Glock 9 mm handgun with a 12-round magazine from the grocery bag and an AK-101 with a 30-round clip from the gym bag.

Approaching Brian’s office, he heard his voice, that same confident baritone that Peter last heard on Gretchen’s voicemail. Peter’s rage went from burning red to white hot.

Now running, Peter burst into Brian’s office and shot him three times in the head with the Glock. Peter bit completely through his lower lip as he shot Brian, so intense was his anger.

Not knowing exactly what they heard, BioRealm employees turned their heads to see Peter, with blood running from his mouth, leaving Brian’s office holding the handgun and the assault rifle and heading toward Gretchen’s office.

Now it’s clear what’s happening. Screams begin to rise from the cubicles.

“He’s going for Gretchen!” a woman shouted.

Two men rushed Peter and he shot them down with a burst from the AK-101.

Gretchen poked her head out of her office at the sound of the second round of shots. She saw Peter coming at her. But it wasn’t like it was him at all.

His face was a grey mask and his pupils were pinpoints.

Gretchen’s right hand went up reflexively as Peter fired a 9 mm bullet through her hand and into her temple. Peter fired again and again, some of the bullets hitting Gretchen’s falling body and some of them ricocheting off of office fixtures.

In a half-jog, wiping spasmodically at his bleeding mouth, Peter moved back to the front door.

People attempting to flee the building scattered as he approached. Peter fired with the AK-101 as he neared the front door, striking at least half a dozen people as those more fortunate fled in a different direction.

The exit door was streaked with blood. A woman with sandy hair was propped against the door, dead.

Peter grabbed her by the hair and tossed her aside to clear his exit. The door wouldn’t budge. So he shot the latch to pieces with the AK-101.

Peter walked out to the parking lot, placed the muzzle of the Glock in his mouth and pulled the trigger. Blood splattered on the BioRealm sign adjacent to the front door.

Peter Mansfield’s final visit to BioRealm lasted all of three minutes and 25 seconds.

Falling Short of Competence

BioRealm prided itself on having a state-of-the art emergency response and security system. In the wake of numerous office shootings throughout the country, the company installed swipe card security six months before Peter Mansfield’s shooting rampage.

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Within 10 minutes of the attack, a text alert was sent to all BioRealm employees and their preferred emergency contacts informing them of the incident.

The text informed BioRealm employees to punch in a code number to let the system know they were safe and sound.

The text lacked specific detail, however, only informing employees and next of kin that an incident had occurred at the Durham campus and that BioRealm was working with local authorities to resolve any issues.

The texting system also failed to take into account any employees that might have gone into hiding when Peter Mansfield first opened fire.

Peter shot Brian Hatch down at 11:12 am.

At 1:10 pm, Angela Brighton, an event planner who assisted the BioRealm sales team, was still hunkered down in a utility closet on the first floor of the Durham offices. When the shooting started, Angela fled for cover, not having time to take her cell phone with her.

In her haste to pull the closet door shut, Angela lacerated her shin against the edge of a mop bucket. Traumatized and now dehydrated, Angela finally burst out of the closet at 1:15 p.m., overcome by claustrophobia and pain and crying hysterically. The building by then had been evacuated.

Angela suffered the surreal experience of walking through the BioRealm offices, seemingly by herself. In her shock, she saw a smear of blood on a corridor wall, and traced it with her finger, as if to confirm for herself that it was real.

The first person she encountered was a County Police Lieutenant, who looked at her in shock when he saw her.

“Ma’am, have you been in here the whole time?” the Police Lieutenant asked her.

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“Nobody….nobody said anything,” Angela said, visibly distraught. “Nobody came looking for me. It’s like I don’t exist,” she said, clearly off-center.

Quickly, the Lieutenant got her a seat and ordered medical attention for her via walkie-talkie. No sooner did he have her seated when Gabe Crooks, an intern from Duke, walked up.

“I was in a second floor bathroom,” Crooks told the Lieutenant. Crooks was less visibly shaken than Brighton, but he was clearly upset.

“I’d like to go home now,” he told the Lieutenant.

In a nearby hotel conference room, BioRealm risk manager Nathalie Galbreath, company CEO Keith Ryerson and chief communications officer Roger Blinton were huddled over scratch pads, cell phones and laptops.

“How many are still unaccounted for?” Ryerson asked Galbreath.

“My latest information is five,” Galbreath said.

“That’s five employees that aren’t in the time and attendance system as being on business travel or vacation and who haven’t responded to the emergency text.”

“Dead and injured, again?” Ryerson asked Galbreath.

“Seven dead, four injured, one critically.”

“Text the families of the missing again,” Ryerson told Blinton. “Let them know that we’re still working with authorities to find their relatives.”

“Text them?” Blinton asked.

“Yep. Do it. It’s the fastest way to get to them,” Ryerson said.

Blinton gave Galbreath a look and then turned away to start texting.

The swirl of events continued.

Social media was alive with cell-phone footage of Peter Mansfield’s exit from the BioRealm offices, when he heartlessly yanked a dead woman’s body from the door and shot his way out.

A gutsy BioRealm intern somehow managed to follow him to the door, shooting video with her phone. She posted the video to Facebook within ten minutes of Peter’s death.

BioRealm’s attempts to comfort bereaved families and provide information to others continued to fall short.

Four hours after the incident, no BioRealm employee had reached out to families in person to tell them what was going on. Contrasting this failure was the excellent effort put out by local emergency responders, who placed personal calls to the homes of every dead or injured employee.

With frustration against BioRealm building to a peak, the grieving sister of a slain employee became outraged when BioRealm couldn’t give her a solid answer as to when she’d be able to enter the building to collect his belongings.

“What do you mean you can’t answer that?” she screamed at a BioRealm employee outside the Durham offices as television cameras recorded the moment.

“My brother is dead! Answer me!” she screamed as the employee, rattled, turned his back on her and headed back into the building, all the while on camera.

Television news producers edit the blood-spattered BioRealm sign into their coverage.

It took BioRealm executives until noon the following day to determine that their time and attendance system malfunctioned and that the five “missing” employees were actually in the building at the time the shooting occurred and had fled to their homes.

None of the five ever came back to work for BioRealm.

No Quarter Asked or Given

Executives at BioRealm were prepared for an active shooter scenario, or so they thought. There was the aforementioned addition of swipe card security. The company was also banking on its text messaging system to get crucial information out to friends and family in a timely manner.

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The company had created an evacuation plan and an emergency communications plan in case of an extreme weather event or some other catastrophe. The actual event, someone’s spouse entering the building and killing people, simply overwhelmed all preparations.

BioRealm’s risk management and emergency response management failures would prove costly in human and financial terms.

Keith Ryerson’s inability to realize the importance of speaking directly to employees and their families on the most notorious day in his company’s existence did not play well.

Coupled with the results of investigations that reported that BioRealm failed to adhere to its own crisis response policies, families that felt their loved ones were killed or injured due to corporate security laxity filed suit.

Also filing suit were 25 BioRealm employees who left the company after the shooting. They alleged that the company’s emergency management training and security measures were inadequate.

Included in that class of litigants were Angela Brighton and Gabe Brooks, the two employees who were left behind the day of the shooting.

“Let me get this straight. Nobody made any attempt other than a text message to reach you and no one came looking for you,” one of the attorneys handling the lawsuit asked Brighton and Brooks.

“No one,” Brighton said.

“No one, means no one,” said Brooks, whose usually sunny disposition was under a very dark cloud.

“Who allows a non-employee to enter a supposedly secure building carrying a heavy black bag?” another attorney representing the employees in the lawsuit said to one of his colleagues as they prepared their brief.

The reputational harm caused by social media sharing of the Peter Mansfield shooting video, plus the images of a BioRealm employee turning his back on a grieving family member also wouldn’t go away.

“We’re going to have to up investments in security,” Nathalie Galbreath told Keith Ryerson in a meeting two months after the shooting.

“I’m talking metal detectors on every door and armed security guards. I think it’s the only way we’re going to get any sense of stability in our workplace,” she added.

“Do you know what our legal bill is already from this?” Keith Ryerson said to her.

“Um, no, I don’t know what it is,” Nathalie said, not feeling very patient.

“How about $650,000 and we’re not even at trial with any one of five lawsuits?” Keith said.

Keith Ryerson put his head in his hands.

“Go ahead,” he said.

“Go ahead what?” Nathalie said, sharing his exhaustion and depression.

“Go ahead and order the metal detectors, order the guards,” Keith said weakly.

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Risk & Insurance® partnered with Black Swan Solutions to produce this scenario. Below are Black Swan Solutions’ recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance®.

1. Crisis Response and Business Continuity plans must coordinate with community police, fire and emergency medical agencies. In addition, pre-establish coordination with a local chapter of the Red Cross.  All organizations rely on community responders to assist in a crisis.  Yet most never proactively involve these same agencies in plan development and testing. If a crisis occurs, this can result in significant challenges related to cooperation and coordination.

2. Have a plan for testing, shelter in place and evacuation processes including a reliable means to account for every employee on premise at the time of the event. This information will also be invaluable for first responders involved in the search and rescue effort.

3. Have a secure centralized database for up to date information. This will allow for timely and accurate notifications to stakeholders.

4. Consider contracting with a specialized crisis call center to ensure you have a plan in place to accommodate mass inquires while providing a professional and compassionate response. Families will expect your organization to provide timely information and account for their loved ones who may have been affected by the crisis. The volume of inquiries and requests for information will often overwhelm your expectations and capabilities to respond.

5. Difficult news must be delivered personally. If the news is not good, make the effort to say it either in person or on the telephone – don’t text it.  Realizing you have to use the tools and contact information you have, do your best to connect on a personal level, no matter how challenging, when you must deliver bad news.

6. Prior to a crisis, identify and train organizational personnel who will interface with victims and families in a critical event. Understand the importance of self-care for those involved in responding to the incident and debrief them at the end of every shift.  Consider contracting with an organization to provide specialized training, as well as to provide guidance and support to those employees during the crisis.

7. Pre-consider strategies for establishing a family assistance center, typically at a hotel, where victim families can gather to obtain information and receive emotional support and psychological first aid. Families also have an opportunity to obtain information from responding authorities.




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

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]