Catastrophe management is sufficiently challenging when conducted at a safe remove from ground zero.However, when the Nisqually earthquake struck the Seattle area in February, SAFECO's (Seattle, $31.5 billion in assets) executives faced the challenge of managing a crisis that manifested itself literally right under their feet. The epicenter of the quakewhich measured 6.8 on the Richter scalewas beneath the Puget Sound, 35 miles southwest of Seattle and 33 miles underground.
In response to the event, SAFECO set up a catastrophe center in a pre-wired building in northern Seattle. "The critical issue is to get the infrastructure set up to help those in need as soon as possible," said Jim Schmidt, senior vice president, property and corporate claims. The carrier's goal was to have the catastrophe center up-and-running within 48 hours, but managed in this case to get it going in just over 24, Schmidt says. SAFECO, the largest homeowners insurer in the Northwest, registered over 700 claims following the earthquake.
SAFECO collects customer contact information through its call centers, prioritizes it by damage and then matches estimators and structural engineers, Schmidt says. Since the call center closest to potential claimantsin Bothell, WAcould itself have been affected by the quake, the carrier relied on call-switching technology to ensure continuous service. "We transferred all calls to the rest of the country and checked all the systems to make sure everything was operational before putting the Bothell center back on line," Schmidt says. Having prepared for an increase of 5,000-7,500 calls on the day following the quake, the carrier only received roughly 500 above a normal figure of about 10,000.
Chuck Stone, SAFE-CO's head of IT says that SAFECO systems helped to identify potential claimants in order to provide quicker service on the ground. Once the epicenter was identified, Stone says, "We used the technology and were able to say, 'OK, given this epicenter, let's go out 20 miles. How many policies do we have in that radius? Where are they? What kind of coverages do we have?' And then we have the ability not only to provide preliminary information about the extent of potential losses, but in fact to supply that information to folks who can contact customers and make sure they're fine."
Stone says that SAFECO has developed a continuity plan to handle an event that could threaten central operations. "In this particular event we had no problems," Stone says. "Our mainframe stayed up; we only had momentary blinks in communication lines."
SAFECO maintains a hot-site agreement in case of a more serious event. "We have plans to take our operations elsewhere and support the needs of the corporation," Stone says.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio