Specialty Insurance

Since Employers Reinsurance was acquired in 1984, it has generated nearly a 22% return on investment. Today, however, the property and casualty market suffers from a challenging pricing environment, escalating claims costs, soft contract terms, the September 11 attack and a toughened investment environment.

ERC recapitalized and maintained its AAA and A++ ratings following September 11, and it is meeting the coverage needs of its clients.

ERC's focus on its strategic customers and products has led to a significant restructuring, resulting in a concentration on profitable lines of business. In 2002, ERC's attention is focused on reinvigorating product leadership while strengthening its core competencies and enhancing strategic customer relationships. Six Sigma quality is the catalyst for the continued restructuring of our business and the principal tool through which ERC will deliver superior products and services.

GE Mortgage Insurance had an outstanding year, posting record earnings in helping over 300,000 families make their dreams of home ownership a reality. With a sharp focus on making our mortgage lender customers more profitable and productive, we created a comprehensive online platform that was named the industry's "Website of the Year." Customers are praising the site's instant access to unique products and tools that facilitate low-down-payment loans. This kind of digitization has helped us change the game in mortgage insurance, creating a significant competitive advantage that will drive growth both in the U.S. and globally.

Financial Guaranty Insurance Company provides bond insurance for securities issued to finance municipal infrastructure and essential services (schools, roads, bridges, water and sewer facilities) and for asset-backed securitizations. FGIC products enable customers to lower their borrowing costs. The new management team repositioned the business to produce 31% core earnings growth and a 43% increase in written premiums. Demand for FGIC products and services increases during economic cycles when need for credit quality is high, and FGIC is well positioned for sustained growth.

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