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From Resource, December 2005
Copyright by LOMA
Faced with
Disaster,
Pan American
Bounces Back
As Hurricane Katrina headed for the Gulf
Coast, Pan-American Life began putting its disaster recovery plan into action. See
how it worked.
By Tammy J. McInturff
In today’s
business world, having
a good disaster recovery plan is essential for any company. Fires, earthquakes,
hurricanes, theft and terrorism are just a few of the threats to business
continuity. New Orleans-based Pan-American Life experienced just how quickly a
major disaster can occur.
After
making its first landfall in
Florida
on Thursday, August 25th, 2005 as a Category 1 hurricane, Katrina gathered
strength and headed for the
Gulf
Coast
. By Sunday, August 28th Katrina had strengthened to a Category 5 hurricane. On
Monday, Katrina came ashore along the Louisiana-Mississippi state line, after
being downgraded from a Category 5 to a Category 4 storm. By Tuesday, August
30th, 80 percent of
New Orleans
was underwater.
Before
the Storm
Even
before Katrina, Pan-American Life took serious the threat of natural disaster.
Well in advance of the storm, the company’s senior management team worked
closely with systems and telecommunications professionals to fully back up all
systems and establish redundant operations from a remote location in
Dallas
.
In the days before Katrina hit, Pan-American began
making additional business preparations. “We initiated our disaster recovery
plan three days prior to the storm’s landfall as detailed in the plan,” said
Pat McGunagle, executive vice president, operations, Pan-American Life.
According to McGunagle, this included activating the following steps in the plan
as dictated by the projected path of the storm:
--Activating the emergency communication plan for
both internal and external entities;
--Activating the shipping of critical data to the
company’s offsite recovery site;
--Activating deployment of key personnel to the
company’s multiple recovery sites;
--Activating pre-arranged travel and
accommodations for key personnel required in phase Iand phase II of deployment;
--Working with the company’s disaster recovery
partners to prepare and stage for therecovery efforts.
The company also made sure that its key personnel had
a copy of the business continuity plan. “Disaster recovery technical binders
were deployed to key information technology personnel and CDs were burned with
key documents for business area representatives deployed outside the city,”
said McGunagle.
Pan-American’s
Disaster Recovery Plan
Implementing
a disaster recovery plan is not just a matter of moving data offsite and setting
up temporary phone lines. It is much more involved than that. Pan-American
realized before Katrina hit that the company was going to have to conduct
business from another location. “It was apparent almost immediately that
Katrina was a storm that was going to do tremendous damage to the
New Orleans
area,” said McGunagle. “While we had begun our pre-disaster preparation
well before the storm, we actually declared a disaster Saturday [August 27th,
2005] and began relocating our operations and people to multiple sites.”
According to McGunagle, Pan-American’s disaster
recovery plan includes a very detailed technical plan on the restoration of all
of its technical platforms and business systems. It also includes a business
continuity plan which details key personnel, items needed at the recovery site,
communications plans and critical process documentation.
Pan-American had its phone lines directed to an
offsite location prior to the storm and deployed key personnel to this offsite
location to answer the phones. “We have a very detailed technical plan that
outlines each step necessary to recover each of our major technical platforms as
well as the restoration of each business system needed to sustain the
operations,” said McGunagle. “In addition, the plan documents key business
processes to prepare for the fact that we may not have all of our critical
personnel available to do these processes. Once all of the systems have been
restored and the business area has verified the system restoration, normal
production operations were resumed at the offsite location. This includes data
center operations, job scheduling, print distribution, production support from
the programming staff, back office business operations including processing of
normal life insurance transactions and commission payments. Our seven Latin
American countries were also operating in a normal business mode within days of
the disaster.”
Because the company took the threat of disaster
seriously and had a well planned business continuity plan, it was able to
maintain the integrity and security of all critical data, including policyholder
files and corporate financial records.
Business
As Usual
Within
48 hours after Katrina’s impact, Pan-American Life reestablished communi-cations supporting its operations in seven
countries of Central and
South America
. Later that same week, the company reactivated administrative services for its
domestic U.S. Individual Insurance, Worksite and International Dollar
operations.
In less than three weeks after all employees were
forced to evacuate
New Orleans
by Hurricane Katrina and flooding, Pan-American Life had achieved “mostly
normal” operations by implementing its comprehensive recovery plan from a
series of remote locations.
The company was able to respond quickly in part
because it regularly tests its disaster recovery plan. “We conduct disaster
recovery testing three times a year, once for each major platform supported,”
said McGunagle.
“Although many of our employees have endured great
personal hardships, our company is healthy and is maintaining progress toward
all important strategic objectives,” Jose Suquet, president and CEO of
Pan-American Life, said in a statement released on September 15th, 2005. He
added that, the company’s business continuity plan
was working and its ability to process business was increasing each day after
the disaster.
Operating
from
Texas
Pan-American
Life chose a company in
Dallas
,
TX
, as the site for its operational hotsite, and in
Philadelphia
,
PA
, for its remote systems back-up and redundancy. However, given the magnitude of
the storm, it became apparent that this arrangement, with 30 operational seats
for six weeks, would be insufficient to run Pan-American Life’s business.
Fortunately, Computer Sciences Corporation (CSC) was also located nearby in
Dallas
. CSC offered to provide Pan-American Life up to 225 fully wired workstations
and data processing support for up to six months.
“We have been partners with CSC for over 15 years as
a customer of their life administration system, LIFE-COMM,” McGunagle said.
“They have worked closely with Pan-American to solve many of our business
needs. Most recently, they have not only proven to be a valued business partner,
but, have truly extended their hand to Pan-American and their employees as they
welcomed us into their corporate offices in
Dallas
. Their employees shared their work space with us and provided welcoming baskets
for each employee as they arrived in Dallas as well as a support group to assist
our employees in their temporary relocation there. Their generosity and kindness
have gone a long way in making a tragic situation bearable.”
In a short period of time, Pan-American had all of its
mission critical production systems restored. “We are able to conduct all of
our daily business processes for all lines of business, including our operations
in seven Latin American countries,” said McGunagle.
In less than three weeks after the hurricane, the
company announced a number of positive developments. These included:
--The regular toll-free customer service number
(877-939-4550) had been re-routed and was fully staffed for purposes of meeting
customers’ service requests and processing all claims.
--Most
of the company’s employees had been located and all were currently being paid,
primarily through direct deposit. Remaining employees were urged to call the
toll-free service number above.
--The
company had a fully operating underwriting unit working in temporary office
space
in
Dallas
, along with other administrative services for its Individual
Insurance,International Dollar, and Worksite units. This enabled new life
insurance businessprocessing to resume within days after the disaster.
--Pan-American Life employees were also working
in remote locations in
Baton Rouge
and
Mandeville
,
LA
, to maintain
financial operations, sales support, marketing and productmanagement. The investment management staff was
fully operational from an office in
Houston
. The firm’s
securities broker-dealer units were working from existing offices in
Valley Forge
,
PA
, and
West Palm Beach
,
FL.
--E-mail communications had been re-established
among all units of the company and its multi-country sales network, in both
English and Spanish languages.
--The company was conducting regular
communications with e-mail and teleconferencing with its network of general
agencies and agents, working in the
U.S.
and abroad, andcommission payments to agents were being processed on the normal
schedule.
Being
Prepared
The damage
from Hurricane Katrina was catastrophic; it has been called one of the worst
natural disasters to ever hit the
United States
. Given the fact that most companies have never seen devastation on this scale
it would be difficult to be totally prepared for a disaster of this magnitude.
Faced with this disaster, Pan-American was able to get its operations up and
running in just a matter of days. “There are always unknown obstacles that you
have to be ready to address,” said McGunagle. “However, Pan-American has a
strong disaster recovery plan which has been in place for many years and is
tested routinely. We were prepared as best we could be for the known issues that
would need to be addressed. A strong management team and the dedication of the
people is what gets the business through those unknowns and allows the company
to continue operating. We had both in place and have successfully survived the
storm as well as the recovery process.”
Overcoming
Obstacles
Overall,
Pan-American’s disaster recovery plan worked well but there were a few
unexpected obstacles that the company had to overcome. “We did have some
surprises along the way,” said McGunagle. “The first very big problem that
we had was the fact that cell phones were completely unavailable. Communication
was a nightmare. Some key personnel had been deployed prior to the storm and
contact was maintained with these individuals. However, contacting the second
wave of personnel for deployment proved more problematic than planned. We also
encountered some problems during our restoration process which caused some delay
in accessing data. In addition, some minor issues were encountered.”
Advice
McGunagle
offered some advice to other insurance companies that may be evaluating their
disaster recovery and business continuity plans. “Companies need to understand
the people implications of any disaster,” he said. “It is key to have
redundancy for critical personnel or to have very good documentation. You do not
know who will be available immediately after a disaster. Also, companies should
plan for some means of communication other than cell phones. We had explored
satellite phones but had not implemented them in our plan yet. Also, we plan to
deploy more of our key personnel to a common location prior to the disaster so
that we will have more people available in the same area should the disaster
become reality. We were spread out all over the
United States
and travel arrangements were strained immediately following the disaster.”
It is important for companies to realize that a
business continuity and disaster recovery plan is more than just a technology
issue. “One of the biggest issues that we faced was the people impact,” said
McGunagle. “Hurricane Katrina impacted every single employee and their
families. Some lost everything they owned. At the same time, we have a fiduciary
responsibility to our customers to assure that our business continues to
operate. CSC assisted greatly in this area as we were able to draw on their
personnel’s in depth insurance based knowledge to assist us during this
critical time while allowing Pan-American to also focus on our people during
this disaster.”
Returning
Home
Although
Pan-American was able to operate effectively in
Dallas
, the company was eager to return to
New Orleans
and help the city rebuild. Once city, state and federal officials gave the
green light, the company began putting its migration plan into place. McGunagle
said the company had a migration plan to phase its people back in an orderly
fashion.
On October 18th 2005, Pan-American Life announced the
re-opening of the Pan-American Life Center at
601 Poydras Street
in
New Orleans
. The official re-opening of the 28-story building occurred on October 10 with
re-occupation by several tenants.
“We believe the Pan-American Life Center is among
the first major office buildings in
New Orleans
’ Central Business District (CBD) to re-open, if not the very first,”said
Suquet. “We were able to achieve a goal of re-opening in less than six weeks
mainly because wind damage to the building was not extensive, and our repair
crews went to work quickly and did their jobs well.”
The repair work to the Pan-American Life Center
involved fixing the roof and replacing some broken exterior glass. In addition,
equipment was installed to sanitize and purify the water supply before it enters
the building, and the entire facility was professionally cleaned.
The Pan-American Life Center is considered one of the
finest Class A commercial locations in the heart of
New Orleans
. In addition to more than 675,000 square feet of prime office space, the
complex includes a full service cafeteria, the Pan-American Life Conference and
Media
Center
, the Intercontinental Hotel and a 795 vehicle public parking garage. Prior to
Hurricane Katrina, Pan-American Life’s 465
U.S.
employees worked at this location.
Pan-American
Life Employee Katrina Fund
McGunagle
said that most employees did choose to evacuate the city prior to the storm.
“There were a few who did choose to stay in their homes and did have to deal
with obstacles of evacuating after the storm,” he said. “The vast majority
of our employees have been accounted for and have survived the devastation of
Katrina. However, many have suffered great personal loss and struggle with the
knowledge that they will need to rebuild. Pan-American has established an
employee relief fund for the purpose of providing assistance to those employees
most impacted by this tragedy.”
The Pan-American Life Employee Katrina Fund is a
non-profit charitable organization. Contributions are tax-deductible and 100
percent will be used to help company employees who have suffered severe
hardships. Donations by check, payable to the Pan-American Life Employee Relief
Fund, may be sent to c/o Todd Schexnayder,
601
Poydras Street
,
New Orleans
,
LA
70130
.
Pan-American has posted a
Katrina
Information
Center
section on its Web site with specific information for its employees, producers
and customers. For more information, insurance policyholders and agents may call
the company’s fully-staffed hotline Monday through Friday from 8:00 am to 5:00
pm CST at 877-939-4550.
About
Pan-American
Pan-American
Life has been a leading international insurance company for more than 90 years.
Founded in 1911, the company employs more than 1,500 worldwide, providing its
top-rated life and disability insurance, worksite benefits and financial
planning services in 42 states and the District of Columbia (DC), as well as
Puerto Rico and the
Virgin Islands
. Its international operations, offering life and group health insurance
throughout Latin America, includes affiliates in Panama, Guatemala and Colombia,
and branch offices in Ecuador, El Salvador and Honduras.
NOTE: Pat McGunagle will represent Pan-American on the program for
LOMA’s 2006 Customer Service Conference, February 22-24, 2006 at the Disney
Contemporary Resort, in
Orlando
,
FL.
His session will be titled, “Business Continuity: A Real Life Success
Story.” For more information on the conference, visit http://www.loma.org/customer.asp
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