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At a time when the insurance industry is taking a round of hits from every possible angle--whether it's an emerging risk like an infectious disease, a zealous attorney general in New York City or a powerful hurricane sweeping over Florida--GE Insurance Solutions is using good old-fashioned customer service and strong underwriting standards to keep financially sound.

Even in the face of a softening market, this insurance arm of the General Electric conglomerate isn't wavering from its commitment to put customers first as it maintains a solid book of business and stands firm on pricing.

And at the core of GE Insurance Solutions' strategy to stay financially sound is a system of checks and balances devised by Pressman's chief risk officer, Samira Barakat. Since she assumed her post five years ago, Barakat has created an intricate system of controls to make sure this giant insurer's portfolio isn't veering off track into dangerous territory.

One system of controls zeroes in on the delegation of authority throughout the company. In the claims arena, for example, the company has a clear-cut approval process for the payment of claims. A $10,000 claims payment would need one level of clearance; a $50,000 claims payment would require a higher level of clearance; and so on up the ladder.

Another vital control system focuses on the monitoring of the insurer's various portfolios of business. As part of this system, a network of underwriting guidelines and parameters are used as a portfolio management tool by the firm's underwriters. When specific limits are reached--say, for example, the company has written $100 million of business of professional liability for attorneys--an automatic trigger would go off and create a discussion among the appropriate GE insurance executives to decide if the limit should be expanded.

"We want to go into business with our eyes wide open," says Pressman. "Our underwriting portfolios are in good shape. But we realize we can't grow all our portfolios in a soft market."

Pressman lauds Barakat as the brains behind this intricate network of checks and balances. "Samira has great risk management and great analytical skills.

"She's done a stellar job of executing this plan," he adds.

And of the fact that Barakat's office is right down the hall from his at the company'sKansas City, Mo., headquarters: "The proximity is there for a reason," Pressman says. "It shows the importance of the risk management function to our company.

"We want to look forward and see the risks coming over the horizon. To be ahead of them ... not only to see how it affects our profits. But to look at them for new products."

September 15, 2005

Copyright 2005© LRP Publications