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Anthony O'Donnell, Insurance & Technology
Anthony O'Donnell, Insurance & Technology
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DESPITE HEAVY LOSSES, INSURERS’ DISASTER RECOVERY BEGINS IMMEDIATELY

After the World Trade Center attack insurers deal with shock and grief, while emergency disaster plans kick in and IT operations are restored.

The insurance industry exists to indemnify those who suffer losses, but on Tuesday, September 11, the insurance industry also suffered grievous losses, along with the world as a whole.

The insurance industry has long been well-represented in lower Manhattan and a number of insurers had offices in the World Trade Center (WTC) and the buildings immediately surrounding ground zero. At press time, many employees of these firms are still missing and several are still hospitalized. Even those companies not in the immediate vicinity of the attack were affected by suffocating dust, debris, security concerns and power outages that continued long after the attack.

But despite the terrible injury, shock and hardship caused by the attack, companies--and most importantly employees--showed great preparedness and energy, activating contingency plans, relocating personnel and getting operations up and running in an amazingly short time.

Aon Corp., Chicago, whose service offerings include risk management, insurance brokerage and reinsurance and human capital consulting services, occupied floors 92 and 98 through 105 of Two World Trade Center, the second tower hit and first to fall. At press time, of the 1,350 Aon employees potentially at risk during the attack, 200 remain missing.

In addition to the human dimension of the event, Empire Blue Cross Blue Shield--which at press time reported nine employees missing and three still hospitalized--had to cope with the destruction of its headquarters located in One World Trade Center, on ten floors between floors 17 to 31. As the majority of the firm's customer service and claims processing operations were located in upstate New York, much business was able to continue uninterrupted, according to CEO Michael A. Stocker. The headquarters principally housed executive, administrative and human resources operations, according to a company spokesperson.

Another insurer, AIG has a large presence in downtown Manhattan, including its headquarters at 70 Pine Street and a large facility at 160 Water Street--both offices just blocks from ground zero. Kevin Murray, CIO, AIG Claim Services, was attending a meeting at the latter address when the first plane struck the North Tower at 8:45 a.m. Having heard a loud noise, he and others moved to the side of the building which had an unobstructed view to the World Trade Center. "We saw a huge hole with fire and smoke pouring out of it, and thought the pilot must have had a heart attack or something," Murray said.

The noise of the second jet closing in at full throttle then attracted the onlookers' attention in time to see it crash into the South Tower. "The worst thing was when the Towers collapsed," Murray relates. "I thought maybe there was a nuclear bomb in one of the planes."

As the North Tower--One World Trade Center--collapsed at 10:29 a.m., AIG's Aviation Brokerage, located on the 53rd floor came down with it. AIG has not released any information on how its employees fared, but Murray believes that approximately 10 are still missing, some of whom were aboard planes involved in the day's events.

Employees of Peoria, Ill.-based RLI Insurance Corp.'s surety and executive products offices were towards the south side of the 80th floor of the North Tower when the first plane struck the north side, immediately destroying an area from about the 96th to the 103rd floors. "Three of RLI's five World Trade Center employees were in the office at the time and all escaped safely," according to Gary Wright, RLI spokesman.

Contingency Plans

According to June Drewry, vice president and chief information officer, Aon Corp., the company's operation at Two World Trade was not a major IT center. It was, however, a major hub for the company's New York, New Jersey and Connecticut businesses. Besides the devastating human loss incurred by the company, the equipment of 1,200 employees within the building was lost.

"Disaster recovery kicked in immediately," said Drewry. "All non-essential project work was put on hold and all resources were shipped to disaster recovery." Drewry and members of her team were in London at the time of the attack. A command center was set up there and in the U.S. "Since everyone was working 21 hours a day, the time difference didn't make any difference," said Drewry.

Empire BCBC has opened a temporary headquarters in Melville, N.Y., but is committed to reopening headquarters in New York City, according to a spokesperson who said, "We're looking at a couple of sites, one of which is in Brooklyn." She added that "our current priority is to provide counseling," and said the carrier has begun "a slow process of bringing people back in stages."

Because of security restrictions, AIG's downtown locations remained closed until Monday, September 17, according to Murray. Immediately following the disaster, however, he adds, the firm moved thousands of employees to its offices in Tarrytown and Jericho in New York state, and Parsippany and Livingston in New Jersey. "We had two people to a cubicle and we were moving people out," to get higher-priority employees back to work, Murray said. "By noon the next day we were pretty much business as usual from a systems, e-mail and networking standpoint--it was a good exercise to go through all of that."

RLI's Wright said that "Within an hour of the North Tower's collapse, we had a disaster recovery center established at the Peoria home office, where all our New York documents are backed up."

Editor's Note: Greg MacSweeney and Julie Gallagher of Insurance & Technology also contributed to this article.

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