Plowing ahead

Rough Notes, Jan 1999 by Jenkins, Bill

Insurers work to help their agents solve the Y2K problem

From the rural farmlands of Pennsylvania to a board room overlooking downtown Seattle, January 1, 2000, is a date that no one can postpone.

While each independent agency must ultimately develop its own solution to the Y2K puzzle, getting help can only make things easier. In this article we hope to make it easier for Rough Notes readers by looking at some steps already taken as well as plans underway in a variety of agencies.

The agencies we talked to for this article represent carriers that have taken the lead in assisting their agents. One carrier is Goodville Mutual, a $23 million A-rated P&C company with its office in rural New Holland, Pennsylvania. GMCC writes personal, light commercial, church and farm accounts through independent agents in nine states. The other carrier is the recently merged Safeco/American States operation. Based in Seattle, Washington, Safeco is a $4 billion, A rated P&C company.

Agent concerns about the Y2K problem come in all shapes and sizes, from large multi-million dollar revenue agencies with multiple agency automation systems and sophisticated users with a variety of needs to small agencies with a single PC.

The agents we spoke with for this article expressed four areas of concern with respect to the ability of their own agency computer systems to meet the Y2K challenge:

1. Their agency automation systems (and other software)

2. Their computer hardware

3. Other computerized systems in use in their agency

4. That those they exchange data with are Y2K-compliant

There has been a considerable amount of activity at the industry level in dealing with this problem. Insurance companies, agency automation system vendors and consultants have all been working to help put this problem in better perspective for independent insurance agents. In fact, the IIAA has launched a massive effort called Countdown 2000. It has pulled together more than 30 independent agency system companies-providing individual Countdown 2000 kits to more than 35,000 agencies. In addition, consultants have been crisscrossing the country-and companies have been working with their agents, often providing seminars to help them gain a better understanding of the Y2K issue.

Goodville Mutual contracted with consulting firm Arthur Andersen to conduct Y2K seminars for Goodville agents. Goodville CEO Herman Bontrager explained why the company has given leadership to this area: "We are a small company. We enjoy a special relationship with the 100 independent agencies that represent us. Out of our close working contacts, especially in strategic planning, we heard a clear message from agents, `We need help.' With Y2K, the biggest hurdle is obtaining clear and accurate information. In 1997 we began sending Y2K information. We contacted the IIAA to obtain their excellent Countdown 2000 materials to send to our agencies. Early in 1998 we initiated these seminars. More recently we have made available the PIA's Year 2000 Survival Manual. To assure momentum in readiness planning, Y2K is now part of our regular discussions with agency principals about our agencycompany agreement."

Do agents really need all of this information to deal with the problem? We asked several to find out.

When asked about the value of the Goodville Mutual seminar she attended, Renee Fjelsted, president of Gordy Insurance Agency, Inc., an agency in Milton, Delaware said: "The seminar was excellent. We had professionals who knew what they were talking about. They covered everything you could think about in terms of problem areas and how to deal with them. It gave me the ability to go back to the office and knowthis is where I'm going to start and this is what I need to do. We put together a plan, got everything prepared and we're ready to go. This includes sending letters out to the vendors that we deal with."

While it is clearly possible to achieve success in dealing with Y2K, for many, the road to compliance has taken some unexpected twists and turns. When it comes to looking at an agency's computer hardware, Goodville agent Ralph Clemmer, CPCU, president of Evans, Hauseman & Richard, Inc., an agency in Pottstown, Pennsylvania, said: "I would recommend to agents that they check every single piece of hardware. For example, all of our workstations have been upgraded-but we have a comm. server, fax server and our email. When we set those up, we took the oldest computers we had and used them. Now we realize that while it's nice to use an old computer, we may not be able to keep them because they're not Y2K compliant."

Equipment concerns don't end with agency automation. Dennis Zubler, CIC, principal of the Hornafius Insurance Agency, Inc., an agency in Elizabethtown, Pennsylvania, made the point about checking other computerized equipment in the agency: "We were fairly fortunate in that we had replaced and upgraded a number of computers not long ago. But Goodville Mutual's seminar helped me think about other equipment I needed to check outsuch as the fax, the copier and the phone system. The meeting stressed the fact that you need to take a look around your agency and see what you're overlooking that may eventually be a problem. Most of our equipment checked out, but we did have the unexpected expense of installing a new phone system."