Boston is all but buried in snow. Parts of New York and New Jersey have yet to recover from 2012’s Superstorm Sandy. The paper files of many Mississippi and Louisiana insurance agents became fish food years ago, when Hurricane Katrina washed away entire buildings. Hard drives didn’t fare well, either.
Multiple studies suggest the tornado season is peaking earlier, with more wild, unpredictable swings from year to year. And don’t forget earthquakes.
Have we grabbed your attention?
Key disaster plan components
If you and your office do not have a disaster plan that gets you back online serving clients within 24 to 48 hours, now is a good time to make one.
Although the scope of your plan will vary by the size of the operation, any plan needs three main pieces:
- Remote working capabilities
- Offsite data backup
- Customer support
Cloud-based computing, mobile devices and social media channels make these tasks easier than they were a generation ago, but you cannot simply assume “we’ll work from home in the cloud” without a more formal plan.
Do You Practice What You Preach? Are You Prepared?
During an extended, widespread power outage can you relocate staff if needed?
If you plan to communicate with clients through social media and/or your website, who within the office takes the lead?
Do you have written guidelines for these public interactions?
If cell towers are out or overloaded, do you and your team have access to landlines?
Uneven disaster planning among insurance agents
In a 2014 survey of more than 100 independent insurance agencies, Applied Systems, an industry software provider, found 55 percent have a formal disaster preparedness plan, though the plans themselves varied greatly.
That means 45 percent did not. And among the 55 percent, it may be that one agency’s “formal” plan is another’s to-do list penciled on a napkin.
Among the 87 insurance agencies that responded, 34 percent planned to communicate with clients via phone, 13 percent via text and 51 percent via emergency website posts. About one-fourth of respondents had multiple plans in place; 17 percent had no plan for client communication.
Depending on the product lines your agency offers and your license, a formal disaster plan, or Business Continuity Plan in industry terms, isn’t simply a good idea.
Have You Tested Your BCP This Year?
The Financial Industry Regulatory Authority (FINRA) ’s Rule 4370* requires securities firms to create and maintain Business Continuity Plan documents and provide the Authority with emergency contact information. The Securities and Exchange Commission has its own standards under the books and records requirement of the Investment Advisers Act. Regulators uniformly recommend annual testing of a BCP or disaster plan.
Two questions to answer:
1. Do you even have a disaster plan to test?
2. How would you grade yourself?