"Insurance companies and intermediaries, whose stock-in-trade is to manage the risk exposure of their clients, face one of their toughest challenges yet: managing their own risk exposure arising from the Year 2000 (Y2K) date change." So says Gavin Douglas-Hamilton, Year 2000 Management Consultant for Abraxas Technologies (Pty) Ltd.
Abraxas Technologies has provided, or is currently providing, state-of-the-art Y2K products, services and consulting to several of the major players in the assurance/insurance industry, including Old Mutual and Sanlam.
Y2K, sometimes called the Millennium Bug, is a global problem arising from a design flaw that renders computer systems incapable of distinguishing between centuries. When such systems have to process or sort information with dates from both the 20th and 21st century dates at one time, errors could arise, causing the systems to crash and/or continue running but generate faulty data.
It has been estimated that as many as 75% of current versions of computer programs in organisations are likely to fail because they don't cater for 21st century dates. Such is the magnitude of the problem that, despite concerted global efforts to rectify non-Y2K compliant systems by the immovable cut-off date, 31 December 1999, some experts are predicting a mild world-wide recession immediately after the millennium resulting form large-scale business failures.
The Y2K problem, Douglas-Hamilton points out, is essentially a risk management issue that requires a comprehensive co-ordination framework to ensure that all relevant issues are timeously identified and addressed through appropriate strategies and management structures. This framework, sometimes referred to as a Risk Management Programme (RMP), should corner every stage of the Year 2000 project, from Discovery through to Impact Analysis, Planning, Rectification and Testing.
The RMP, in addition to addressing generic Y2K issues, should also address company-specific as well as industry-specific issues in a structured and comprehensive way. A prime example of an industry specific issue, as applied to the insurance broking fraternity, is the specialist software provided by the various assurance/insurance companies to assist their intermediaries.
These packages, in all likelihood, will have to be upgraded to Y2K versions in the next few months by the principals involved, as part of their RMP. No doubt brokers will be informed of the intended timeframe of the upgrade in good time. However, Douglas-Hamilton advises, brokers should be proactive in this regard and contact their principals to find out whether current computer platforms will support the new versions of the software.
"For example, current DOS-based versions of packages might be replaced by Windows 95,' he says. "This might necessitate an upgrade of all or some computers and/or networks within the broking organisation - a potentially costly and disruptive exercise. In such cases the old adage 'Forewarned is forearmed' most certainly applies."
A hardware upgrade might also prove to be necessary as a result of the so-called PC BIOS issue. The BIOS (Basic Input/Output System) controls the fundamental operations of the computer, such as keeping track of the date. If the BIOS installed in the broker's PCs cannot recognise 21st century dates, as in 99% of cases, the computers will have to be upgraded.
A further issue worth considering, Douglas-Hamilton believes, is whether or not the broking organisation will have to upgrade any software packages currently in use that were not supplied by the assurance/insurance companies i.e. accounting packages, prospecting systems, desktop software suites
"Intermediaries will have to check with the suppliers of all their packaged software to ensure they are using a version of the software that is Y2K compliant," Douglas-Hamilton comments. "In addition, brokers will need to check with their suppliers that their operating systems are a compliant version.
"Likewise, intermediaries will need to ensure that any software they have had specifically developed for their organisations, by either in-house staff or third parties, is Y2K compliant.
"It's important to be aware that not just 'official company software' but also all 'personal software' such as spreadsheets, personal databases, calendars and the like, must be converted so that all date fields cater for centuries. In other words, any YY formats must be converted to CCYY format. Failure to do so could result in unpleasant and costly 'irregularities'."
These are just some of the industry-specific issues that must be addressed systematically and timeously as part of an organisation's Y2K RMP. In this context Abraxas Technologies, drawing on its considerable experience, can assist assurance/insurance companies and their intermediaries by providing a wide variety of Y2K products, services and consulting. Together these make up a complete solution, supported by state-of-the-art automation tools and methods addressing every stage of the Y2K project.
Abraxas Technologies' solution is specifically designed to minimise an organisation's Y2K risk exposure. The efficiency of Abraxas Technologies' tools and processes, together with over ten years expertise, allow the company to offer effective Y2K solutions at a reasonable cost.
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