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Providing Protections While Breaking New Ground in the Foreign Service: Saying Yes When Challenged

In the decades following the end of World War II, the United States went through tremendous restructuring when it came to the Foreign Service. The Foreign Service Act of 1946 created a sizable expansion in the Foreign Service by increasing the number of Foreign Service officer positions and improving the overall organization of the diplomatic service itself.

Clements Worldwide Offices | Clements Website
Clements Worldwide Offices | Clements Website

With this boom in the Foreign Service, many new officers went abroad, almost always bringing along their own vehicles and personal household effects. This was especially the case for those who were overseas for extended periods of time. The question soon became: To whom do I go if my car is damaged? What do I do if my personal belongings are stolen while I’m on duty?

Enter Robert Clements and his wife M. Juanita Guess. In 1947, the duo founded their own insurance firm to provide a new type of insurance service to diplomats, both rookie and veteran. This sort of service was brand new to the Foreign Service and the domestic insurance industry. Clements & Company rolled out their first insurance packages with a primary focus on automobile and household effects protections. But above all else, they strove toward one goal: coverage for all U.S. Foreign Service Officers, regardless of where they were posted or what their role was.

In this “moment” in U.S. diplomatic history, ADST draws on an interview with Jon Clements—the son of Robert Clements and M. Juanita Guess, and now Chairman of Clements Worldwide—who shares the story of Clements & Company’s founding, how it broke new ground in the Foreign Service industry, and his experience working through the uncharted territory of international insurance for diplomats.

Jon Clements was interviewed by Charles Stuart Kennedy on June 7, 2018.

Read Jon Clements’ Full Oral History HERE.
Drafted by Randy Schmidt

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Excerpts:

“…it’s the idea of shedding the stereotypical side of the insurance industry, and starting to think independently about what’s really going on here? What’s the security here? What’s the lifestyle?”

           
Jon Clements presenting the M. Juanita Guess Award to Suzanne Lundin-Ross (1996)
Jon Clements presenting the M. Juanita Guess Award to Suzanne Lundin-Ross (1996)

Rethinking Risk:
… Interesting thing about the foreign service is that there is a perceived notion that there are high risk and low risk countries. As some of that is true, we find that the playing field is more level than you think. This leveling of risk is highly due to each country setting protocol and security measures to even things out…

. . . I think it was shedding the stereotypical thinking that was important. As I teach and educate over at the Foreign Service Institute, I ask the question, “What’s a riskier car to own in West Africa? Is it a red Corvette or a green Ford Explorer?” Everybody and their brother would pick the Corvette if they were here in Bethesda, Maryland, but the Ford Explorer is far more risky to have there, because the Corvette is never going to be driven. It’s never going to be stolen, because there’s no place for it in West Africa, so the Ford Explorer becomes much more risky a proposition for an insurance company, and that’s very different thinking. So it’s the idea of shedding the stereotypical side of the insurance industry, and starting to think independently about what’s really going on here? What’s the security here? What’s the lifestyle? Rather than just thinking, “It’s going to Nigeria? It’s a disaster, we’re out.”

“. . . I could see my father’s face, and our philosophy is, and his was, that we don’t say no. We say yes, and then we figure out how to do things.”

Saying Yes When Challenged:
Q: From your parents did you get any stories about early on, starting up? Because that’s always the most difficult part.

CLEMENTS: There are a lot of stories. The company started basically in 1947, I arrived in 1981, so that’s 35 years later. There were a lot of things done in that 35-year period. I was informed about some of it, but there was not a lot of history provided, other than getting a long story on how the program started, which we’ve talked about—and the Claims Act, and building these products, and all of those things. I wish I could be better on a few more stories other than that. I can tell you philosophically a fun story, which actually was the philosophy of the company when it started and through its early years. I call it the airplane story, which is, when I was first starting with the company—very early on, I had been trained—and I got a call from an FSO going to Central America, and he wanted to take an airplane. We didn’t have anything for airplanes. Nothing. But I could see my father’s face, and our philosophy is, and his was, that we don’t say no. We say yes, and then we figure out how to do things. So I said, “I’ll call you back,” to the FSO. And I go into my father’s office, and I’m young, I’m shaking my head a little bit and I said, “You can’t believe it Dad, there’s an FSO, he’s taking an airplane, and first of all we have no policies for airplanes, no pricing for airplanes, we don’t know anything about airplanes. What do I do?”

And he said, “Eh, write it. Take the auto policy, literally take a pen out, wherever it says ‘automobile,’ write ‘airplane,’ and charge the guy a surcharge because we have no idea what we’re doing.” And it was written. That’s an absolute true story. Our one and only airplane. But that was the idea—there was a cavalierness in wanting to do that, and not be drawn into the staunch, rule-burdened environment of the insurance industry.

“. . . we take care of that community. We take care of you guys. We go to DEA, DOD, agriculture—all the ancillary entities which make up the profile of an embassy.”

           
Clements Worldwide leadership team (From the left: Jon Clements, Smita Bhargava, Tarun Chopra)
Clements Worldwide leadership team (From the left: Jon Clements, Smita Bhargava, Tarun Chopra)

A Solution for the Foreign Service:
When I started in 1981, 95 percent of the company was the American Foreign Service. And now it remains a very important part of the business. It is working with organizations with people and operations anywhere in the world such as Peace Corps, United Nations, USAID, working with relief organizations, working with the American and international school community. Our company is the largest insurer of international schools worldwide. So we do health insurance for the teachers in the schools, and we have a proprietary product that we built for it. So we take care of that community. We take care of you guys. We go to DEA, DOD, agriculture—all the ancillary entities which make up the profile of an embassy. But we also insure corporate expatriates. So if Exxon is sending people to Madagascar, they’re our customer, and we have a little bit different product for them. You have some unique parts, the American Foreign Service has some unique components in your coverage. But same premise, same idea of insuring cars and personal items overseas.

. . .the Foreign Service doesn’t go to a few countries. They go to all of them. So, if you’re going to offer a program for household goods for the Foreign Service, it needs to be eligible for all the countries. You need to be able to do business in all the countries. So our business model is, whatever we’re doing, we’re typically doing everywhere. Let’s say the international school business that we are in, that’s a very similar business model. As with the foreign service, our focus is to provide insurance solutions to the international schools community on a worldwide basis. Even today, we continue to provide solutions in over 170 countries.