Greetings from the Microsoft internet kiosk in the lobby of the insurance trade show (ACORD Technology Conference) at which I am exhibiting!
Check out this front page story in the #1 insurance trade publication, the National Underwriter ( nuco.com )
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Y2K Woes Could Drive Insurers Out Of Business
By Ara C. Trembly
With just over 18 months to go until Jan. 1, 2000, some insurance companies are facing the very real possibility that computing issues associated with that date could render them insolvent, a panel of experts warned.
According to John R. Rath, director of insurance risk management at the Milwaukee County Department of Administration, insurance companies have major concerns with Year 2000 problems that could eventually drain their policyholders surplus.
"They could become insolvent," said Mr. Rath during a recent satellite broadcast news conference sponsored by the Malvern, Pa.-based Chartered Property Casualty Underwriters Society. "Insurance companies could go out of business. It's very scary."
Lloyd's of London estimates that the Year 2000 problem-or "Millennium Bug," as it is sometimes called-will cost more than $1 trillion to fix worldwide, according to another panelist at the conference, Michael R. Cashman, a partner with the law firm Zelle & Larson, LLP in Minneapolis, Minn. This includes $100 billion in anticipated compensatory and punitive damage awards, he said.
Mr. Cashman, citing figures from the Stamford, Conn.-based Gartner Group, noted that a typical large corporation would spend about $100 million to find and implement a Y2K solution. Less than one-half of all companies will be ready when Jan. 1, 2000 arrives, and as many as 20 percent of companies will go out of business due to Y2K-related problems, he added.
Panelist L. John Goldberg, senior vice president at J&H Marsh & McLennan in Philadelphia, cited numerous specific areas of potential negative impact from Y2K problems.
These include, but are not limited to: computer networks, telephones, pagers, radios, elevators, street light switches, medical devices, global maritime positioning systems, airline flight operations, credit cards, ATM security systems, stock market trading, dated prescriptions, insurance policies, mortgages, manufacturing processes, delivery processes and accounting systems.
Mr. Cashman said society would seek to allocate responsibility for the economic consequences of the Millennium Bug. "Insurance policies will be a favorite target," he said, "since the insurance industry is often held responsible for the consequences of economic crises."
(For more on this story, see NU's May 18 edition, page 1.
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Coming soon, ACORD has their own Y2K site:
acordfyi.com
- Jeff
P.S. Anyone who thinks they can fly in from out of town for the shareholders meeting and get a room in Charlotte is in for a rude awakening. Turns out this is "race weekend" so that all hotels are booked solid. So, as of now, I can't find a room. Any locals know any good strategies? Maybe I should pitch a tent in the Charlotte Speedway parking lot? (gg) |
