Katrina Aftermath: Pan-American Life Down but Not Out

Business Continuation

Katrina Aftermath: Pan-American Life Down but Not Out

For nearly a century, Pan-American Life Insurance has weathered the storms of the Gulf Coast from its home office in New Orleans, but as Hurricane Katrina ravaged the area in late August and flood waters filled a significant portion of the city, the company has been challenged as never before.

“Given the somewhat unprecedented nature of the storm, even the best business continuity plans have been tested,” says Patrick McGunagle, executive vice president of Pan-American. “Most companies might figure maybe a six-week kind of outage at most, but as you know, the whole infrastructure of New Orleans has been shot.”

The carrier was able to implement its disaster recovery initiatives. SunGard hosted hot sites in Pan-American's plan–Philadelphia for the data center and data processing, Dallas for the operations area. “Both of those [sites] executed,” says McGunagle. “We got 20-some people over to Dallas, and we got all our tapes out of New Orleans and up to Philadelphia before the storm hit.”

The rest of the operation came together in the days following the storm. “We had to come up [to Philadelphia] and rebuild our servers, and that's taken us the longest time to get up,” says McGunagle. The carrier had to post a static Web page to give employees some information in the days following the storm.

While the generosity of millions of American citizens and corporations has been well documented, McGunagle is particularly thankful to Computer Sciences Corporation. “We've had a relationship with CSC for some time, but it really stepped up to the plate,” he says. CSC offered Pan-American full use of its facilities for at least the next six months, not only to host Pan-American's data center but also to provide 150 fully wired workstations for Pan-American's production workers.

“We've been able to repoint the data over to CSC from SunGard's Philadelphia site and basically move our people from the [Dallas] hot site right over to CSC's headquarters [also in Dallas],” he says. “That has allowed us to get up to speed quickly.”

The biggest challenge for Pan-American has been dealing with the shattered lives of many of the carrier's 460 employees in New Orleans. “Most have reported ready for work,” says McGunagle. “It's heartening to see people are eager to come back to work, but certainly with any disruption like this, to ask people to live away from their homes for an extended period of time can put a strain on them. We're eager to get back to the prestorm conditions, but for many of our employees, there are several life choices they are going to have to make if their homes were destroyed.”

By mid-September, Pan-American had about 50 operations employees working in Dallas with the carrier's investment and finance areas reforming in Baton Rouge. “We've had terrific help from CSC's and our own human resources departments to line up about 250 hotel rooms, suites, and apartments in the Dallas area,” says McGunagle. “Over the next few days, all of our employees who are able to get back to work are going to be in Dallas for operations, systems, and project management. Baton Rouge is our center for finance and investment. We were able to obtain suites [in Baton Rouge] that have not only bedrooms in the back but Internet access and offices in the front. That, coupled with another building we've just obtained in Baton Rouge, will support our investment and finance groups.” Pan-American also is leasing some space on the north shore of Lake Ponchatrain for some of its sales people who already have returned to their homes.

McGunagle believes one irony of the story is Pan-American's headquarters in New Orleans is largely undamaged and has power. He returned to New Orleans on Sept. 11 and saw a couple of windows were blown out, but there was no flooding in the building. “The building–and this is somewhat surreal–looks terrific,” he says. “The issue for us and a lot of other businesses is there are a lot of conflicting reports about the readiness of the New Orleans infrastructure.”

Pan-American and all New Orleans businesses also have to deal with the loss of their employees' homes. “That is the real story there,” says McGunagle. “These are people who lost everything, yet they eagerly are working around the clock to get the company up and running.”

Pan-American is being challenged not just to exercise its business continuity plans but to deal with the issues involving its employees, as well. “We're trying to take care of them in providing not only the housing but also counseling services,” says McGunagle. “We've formed an employee fund to raise money for our employees who have been particularly stricken by the storm.”

When all is said and done, McGunagle says the storm and its aftermath amount to a human resources challenge. “The technology aspects of [the plan] held up,” he says. “The real challenge the first couple of days was to locate people and make sure they were all right, let alone mobilize. The good news is we are up and running. It took a few days to get all the applications back up, but given the extraordinary circumstances, we are pretty proud of our people.”