GE PLANS SALE OF INSURANCE UNITS:
General Electric Co. likely will sell all of its remaining insurance operations, which include Kansas City-based GE Insurance Solutions, according to comments made by the head of GE Insurance Solutions.
Ron Pressman, head of GE Insurance Solutions, said GE probably will “sell down to no involvement in the insurance sector” over time. He said insurance businesses such as the medical malpractice insurer GE recently sold are better positioned if they aren’t “trapped” inside GE and “starved for capital.”
GE has been selling insurance properties including a subsidiary of its Kansas City-based GE Insurance Solutions in July. Berkshire Hathaway Inc. paid $825 million for Medical Protective Corp. of Fort Wayne, Ind., which provides professional liability insurance to doctors and dentists. GE Insurance Solutions, formerly called Employers Reinsurance, employs 850 in the Kansas City area.
“Two to three years from now it probably will be a more robust (mergers and acquisitions) market,” Pressman said. “We’re patient. If something comes at us soon, great. If it takes a couple of years, so be it.”
Pressman said interest in insurance companies likely will increase as recent regulatory scrutiny subsides.
Meanwhile, Richard Smith, chief operating officer of GE Insurance Solutions, left the company to join consumer credit rating company Equifax Inc. Smith will become chairman and chief executive officer of Equifax, succeeding Thomas F. Chapman, who will retire at the end of the year.
Smith worked at General Electric Co. for 22 years and most recently led all business units for GE Insurance, including property and casualty reinsurance, commercial lines insurance, and life and health reinsurance.
The company won’t name a successor to Smith, a GE Insurance spokesman said, and company CEO Ron Pressman will take over Smith’s duties.
GE Insurance posted net income of $36 million in 2004. On July 1, the company sold its Medical Protective Corp. unit to Berkshire Hathaway Inc. for $825 million.