Before NU NAPSLO Daily interviewed executives to hear their views on the lessons of 2008, Stanley Galanski, president and chief executive officer of The Navigators Group, delivered his own comprehensive list at an industry conference.

Speaking late last year at the 20th Annual Executive Conference for the Property-Casualty Industry--presented by The National Underwriter Company and sponsored by Ernst & Young and Dewey & LeBoeuf--Mr. Galanski gave his take on broad lessons learned from the travails of financial institutions outside the insurance industry.

#1: Underwriting matters.

"Whether it's the mortgage business or D&O insurance, the quality of your decision-makers, your discipline and the way you manage your corporate culture really matter," he said.

#2: Don't underwrite what you don't understand.

"There are a lot of boardrooms, I'm sure, where various quants came in to explain their models [and] nobody wanted to look like the dumbest guy in the room," he speculated, characterizing lesson #2 as a return to "basic country underwriting."

("Quant," by the way, is short for quantitative analyst--a financial professional who takes a mathematical approach to evaluate market conditions.)

#3: Don't put blind faith in quants and experts.

#4: Always understand your downside risk.

Skeptical that the financial product units of various financial institutions understood even one-quarter of their downside risk, he urged conference attendees to heed that lesson--and also to apply it to property underwriting, where insurers need to do their own assessments of the validity of the results of natural catastrophe models.

#5: A handful of people can really destroy a company and a culture that have taken years to create.

#6: Size doesn't equal strength.

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