Sandy: An Opportunity for Insurers to Prove Themselves

Duke Ellington is known more for his great music, such as Take the ‘A’ Train (alas, it’s flooded right now) than for his inspirational quotes, but in thinking about what has gone with the weather on over the last two days—and where the recovery is headed over the next few months—I thought his words were prophetic.

“A problem is a chance for you to do your best,” is a quote attributed to Ellington and boy, is the insurance industry facing some problems.

Disaster recovery is a challenge for any business, but when your business is helping others recover from their own disasters and your own business is located in the midst of that same disaster, well, that’s what you call a double-edged sword.

It’s too early to assess the damages that insurance carriers located along the Eastern seaboard are facing within their own four walls. With roads still flooded and mass transit at a standstill it could be a few days before IT workers are able to get back to the office and assess the damages.

When adversity strikes others, it is wise to look at your own circumstances and try to gauge what would happen if a phenomenon such as Sandy strikes your area. None of us are immune from these natural disasters. We’ve seen too much evidence of it in the last decade, whether it is a hurricane, a tornado, an earthquake, or even a blizzard.

There used to be plenty of examples of companies going out of business if they suffered a major data loss. Twenty years ago, business continuity plans were rare and when Hurricane Andrew struck Florida in 1992, 80 percent of companies that did not have such a plan went out of business, according to the Information Technology Association of America.

Most companies today are smart enough to have a plan. Their data resides either in multiple locations—hopefully not in the same or an adjoining ZIP Code—or, as we have seen more recently, in the cloud. Having data available is the only way for an insurer to get the business running quickly and insurers are always judged by policyholders on how quickly they react to their claims.

Of course, having a connection to your customers is vital. As Rob McIsaac, a principal with Novarica points out, disaster plans almost always focus on getting the back-end systems running, but too often ignore the front end. People want to communicate with their insurer. Having back-end systems running doesn’t mean much if the front end is closed.

Practicing for a disaster is helpful, but all the practice in the world can’t prepare businesses to react as well as they—and their customers—would like. For one thing, you can’t replicate the personal pressure employees are going through as they have to deal with their own disaster recovery plans.

The insurance world will be watching how companies react to one of the most expensive storms in history. There will be lessons for all of us to learn from Sandy.

 

About the Author
Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle is editor-in-chief of Tech Decisions magazine and technology channel editor for PropertyCasualty360.com. He has spent over three decades as a journalist for a variety of business and regional news publications including a stint with a weekly newspaper that he owned and operated. He has been with Tech Decisions since the magazine’s inception in 1999 and has written articles on virtually every issue and trend facing insurance IT professionals. Prior to joining Tech Decisions, he spent two years as editor of a sister publication, The Ohio Underwriter, where he covered insurance topics for the agency and carrier markets. He has spoken on insurance technology issues at various industry conferences such as IASA and ACORD LOMA and on a number of web seminars. He is a graduate of Xavier University in Cincinnati with a degree in Communication Arts. Hyle may be reached at rhyle@sbmedia.com

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Tech Digest eNewsletter

Technology related insights for insurance professionals including key developments, solution providers and news briefs from the carrier front – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.