LONDON -- Insurers in Britain, both those doing U.K. business and those involved in insuring international risks, were encouraged last week to take advantage of two data resources set up to help assess Year 2000-related risks.

The London Insurance & Reinsurance Market Assn. went live last week with its LY2K Index, which is intended to be used as a benchmark for assessing exposures related to the date change at the end of the year 1999 (BI, Aug. 31). The date change is expected to result in significant problems for many computer systems that read only the last two digits of the year, and so may confuse the year 2000 for the year 1900.

Meanwhile, the Assn. of British Insurers has strongly urged all intermediaries who have not already done so to join its Year 2000 database. The database, on the ABI's World Wide Web site located at http: www.abi.org.uk, contains information on the Year 2000 readiness of nearly 2,000 intermediaries and 133 insurers.

LIRMA's LY2K Index, available on CD-ROM, is intended to provide underwriters with relative risk factors based on industry sector and geographic location. Researchers have analyzed countries and regions according to a variety of criteria, such as dependency on microchips, government and central bank action to deal with the problem, and public awareness through the national media. By indicating how a particular industry and a particular country are moving toward compliance on a scale ranging from 1 to 10, the index should help underwriters better understand particular exposures in comparison with similar exposures elsewhere, according to David Watson, head of the LIRMA subcommittee working on the Year 2000 issue.

So far, 24 parties have signed up for the index. They include insurers, reinsurers, Lloyd's managing agents, the Lloyd's Year 2000 committee and an Australian bank.

Mr. Watson has stressed that the index is intended to be used to supplement underwriters' own individual assessments of particular risks by providing standards for exposures on industrywide and countrywide bases.

Marie-Louise Rossi, LIRMA chief executive, said: "Assessing Y2K liability is down to the individual judgment of underwriters. We believe, however, that this model is a unique tool, which will provide an idea of the relative levels of risk being taken on. In some cases, it will set alarm bells ringing."

Max Robinson, a member of the Y2K committee and an underwriter at Zurich Re (London), added, "Although there are gaps in content analysis, the model already offers some valuable indicators as to the relative Y2K risk of given industry sectors in given countries."

The LY2K Index was developed with Gartner Group, a Stamford, Conn.-based information technology consulting firm. LIRMA and Gartner have been updating the index quarterly over the past year while it was in preparation, building up a picture as to how certain industry sectors in certain countries are moving toward Year 2000 compliance. Continued quarterly updates are planned throughout the year 2000 and possibly beyond. By November, the index will be updated again in time for the next renewal season, but it will also be modified to "fill in gaps in content analysis," according to a LIRMA spokesman.

Mr. Robinson said the fact that the index is updated quarterly is one of its real strengths, "enabling underwriters to view changes in Y2K preparedness as they occur in the run-up to the millennium."

David Watson, director and chief underwriter of London-based NAC Reinsurance International Ltd., heads LIRMA's Y2000 subcommittee, which has been responsible for work on the index. He has emphasized that LIRMA had specifically wanted to provide guidance for underwriters rather than introduce exclusions for Y2K risks, as sample exclusion clauses were already available from the ABI.

The ABI is writing to all intermediaries who have not already returned its questionnaire on the state of their readiness for Y2K. The database it is compiling from the returned information is intended to greatly reduce the workload for both intermediaries and insurers by helping them identify potential problems.

The ABI intends to extend the database to include other industry trading partners, such as loss adjusters, vehicle repairers and lawyers.

John Kemble, the ABI's electronic commerce manager, said, "All the indications are that the industry still has some way to go before it can claim to be totally Year 2000-compliant, which is why maximum participation in the database is so important. It is the only way to avoid the massive duplication in effort involved where companies check compliance of trading partners individually. It also highlights to our policyholders and the government how seriously the industry is treating the issue."