Devoted to the common cause: Amerind CEO Kent Paul opens the property-casualty world to American-Indians. The question is not one of risk transfer so much as it is one of trust.

Sovereignty is the boon and the bane of all First Nations, but risk management brings those contradictions into focus. Kent Paul has won recognition from his constituents, as well as from the mainstream insurance sector, for finding resourceful and effective solutions.

Amerind Risk Management is a multitribal, multijurisdictional IRS, Section 17 federal corporation, owned by a vast majority of federally recognized tribes and based a few miles north of Albuquerque.

One initiative this year, initiated by CEO Paul, offers a good example of Amerind's unique challenges. The project assigns GPS coordinates to all of the structures that Amerind covers, which is important because with a hugely diverse and overwhelmingly rural base, few of the properties Amerind covers even have addresses.

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As every property-casualty underwriter knows, a physical address is the point of departure for P/C coverage in the nonnative world.

"We have a very diffuse base," Paul said. "We cover more than 55,000 structures worth more than $7.5 billion across 32 states, but most of that is so rural that they have Post Office boxes. Our risks include tornadoes and wildfires to hurricanes and floods. Hurricane Katrina and the wildfires in California had particularly traumatic impacts on Indian Country. We were among the first responders to get money to our policyholders in those eases."

The GPS initiative is "a massive undertaking," in the words of one insurance industry executive, noting that the project will take years to complete. Even so, the project's already yielded results. "The data that we got for this year's renewal was night-and-day different from the data we got when the policy was first issued," the executive said.

The enthusiastic response to the GPS program emboldened Paul to launch another program to help make tribal policyholders more visible: giving Amerind policyholders, many of whom are poor, live in rural areas and don't have checking accounts, access to debit cards. Paul is preparing to start a debit-card program later this year.

"People are issued the card when they get the policy," said Paul, "but it has no value at the time. If there is a claim, we can load it up easily. That is much better for getting money into people's hands than checks or wire transfers."

Those developments get Patti kudos from the community, but the major innovation that grabbed the interest of the mainstream insurance sector was the formation in January of an independent commission of national industry experts to advise and support the all-Indian board of directors at Amerind.

"We created our own regulations," said Paul. "We are unencumbered by many standard industry regulations, so we can be more responsive, but that also means that outside underwriters have not been comfortable doing business with us. We had also to be innovative to respond to the naysayers."

Once the advisory commission was in place and mainstream carriers and reinsurers took note, Paul helped create a captive reinsurance company and four segmented cells. "We needed something between the risk pool and people like Munich Re or Lloyd's," he said.

Mainstream insurers are most impressed by the fact that Paul lead the charge to create the first segregated-eell portfolio structure operating inside Indian Country, using the segregated-cell captive model. Each cell contains a homogenous group of similar type risks protecting tribes from a variety of exposures.

Prior to this time, the Indian tribes were primarily familiar with only the traditional insurance "risk transfer" model. By introducing this alternative risk financing mechanism, Paul is credited with expanding their knowledge of innovative risk management practices and providing them with an alternative risk solution.

Paul's other major accomplishment, as seen from outside Indian Country, was his ability to create a common cause among the proudly individualistic native community.

"For all of the history of the tribal nations, fortunately or unfortunately, they have found it tough to trust each other," said a earlier executive who has worked with Paul for several years. "Kent has been able to get 500 of the 560 or so federally recognized tribes to solve common problems and to enable each other to solve individual problems."

"Kent lives by his words and expectations," said one Amerind staff member. "He does not expect any more from us than he would from himself. He never wants the spotlight; instead, he shines the light on others, he makes us feel important and proud to be who we are. Kent shows sensitivity and respect to the native American Indian culture," while bringing to that culture the best practices in risk management.

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Now here's a challenge: develop a comprehensive risk management program for more than 500 independent Indian tribes spread over 32 states involving sophisticated alternative risk options for a variety of different risks along with the challenge of insuring more than 55,000 structures from a range of potential catastrophic losses. The solutions, though innovative and imaginative, were not the crux of the issues. It was the trust of the tribal communities in Kent Paul that made it all come together. For good reasons, over the decades, trust has been a tough issue to overcome when working with Native American tribes. Because of his understanding of the cultural background of his Indian clients, Paul has been able to bring risk management techniques to the fore. "He shines the light on others," said one of his colleagues. "He makes us feel important and proud to be who we are."