SOLUTION PROVIDERS FORUM 25 October 2006

© Lloyd’s2 Solution Providers Forum Agenda Introduction-Paul Tuvey Reform Updates-Steve Hulm Contract Certainty-Status -Required data for monthly return -Good practice for recording data ECF and A&S Repository-Status-Adam Stafford -Implementation roll out -Preferred delivery method A&S-Status-Brian Austin -Publication of design -Measurement update ACORD -Roy Laker Future Approach to Communication -PT and RL Open Discussion -All

Market Reform Page 3 Contract Certainty Market performance still ahead of target Work remaining in three areas: –Quality and robustness of data –Exception reduction –Legacy Letter to all industry CEOs just gone 2007 plan in development Legacy numbers show decline in priority 2 and 3 legacy Priority 1 still increasing, change request to UPR still to be agreed

Market Reform Page 4 Time line to conclusion of FSA challenge

Market Reform Page 5 Contract Documentation Pilot Contract documentation pilot still running Broad support for the concept Limited volumes to date (10-20 contracts) Slip templates an issue plus general lack of awareness Work underway to raise awareness & resolve blockers

Electronic Claims Presentation name 00 July 2005 Insurer’s Market Repository Update Solution Provider Forum 25 October 2006 Adam Stafford Lloyd’s Business Process & Change Mgt

Market Reform Electronic Claims Page 7 Agenda ECF is Live Why do we need an ECF? Contractual Framework, Training and Governance ECF not happening in Isolation What are the Future Plans? A&S Latest – Direct Load and live/ DRI in MAT Next steps

Market Reform Electronic Claims Page 8 ECF is Live

Market Reform Electronic Claims Page 9 Implementation –ECF went live over the weekend of 9 th / 10 th September –111 Partnerships operational (across Lloyds and IUA) –Volumes (over 2000 total transactions processed) –+ IUA pilot started includes Global Aerospace, Liberty, Markel, Munich Re, Swiss Re, XL, Zurich, Score, Faraday (till Dec 2006) Project Approach –Big bang hasn’t worked in the past –Partnerships decide to sign up when ready –Early implementers – lessons learnt –BEFIT and ECPG working closely with BP&CM to ensure project success ECF is Live

Market Reform Electronic Claims Page 10 ECF Live Project Scope Partnerships –Firms decide partnerships by class of business / trading relationships –With Lloyd’s and IUA carriers and XCS –MRPO is monitoring progress New claims and their subsequent transactions –Existing paper based claims (legacy) to be tackled later System Processes and Procedures (SP&P) –Some areas are currently excluded from scope –February CR’s will address some of these e.g. Binders; Direct Reporting –See SP&P for full list of areas in scope Base camp –Remember Phase 5 was always meant to be ‘base camp’ –Further improvements will be made

Market Reform Electronic Claims Page 11 Public Commitment to 100% Target on ECF Live Brokers Committed to deliver new claims to Lloyd’s electronically Aon Benfield Marsh Guy Carpenter Cooper Gay Active support from: GlencairnARB JLT Gallagher MillerClaytons Willis Managing Agents Committed to deal electronically with new claims AmlinBrit FaradayHiscox LimitMarlborough St Paul Traveler’sAdvent SVBWellington BeazleyAscot ChaucerHeritage BeaufortCathedral Hardy

Market Reform Electronic Claims Page 12 Current High Priority Issue Contractual Framework –Needs to be signed up by all participants (ECF and A&S) who wish to use the Repository from day one (brokers and managing agents). –Framework made up of Repository Rules and Xchanging side letter to sign. It is legally binding. –Repository Rules cover important topics, such as:- –License to use and access documents –Unintentional disclosure –Authentication of users –Governance –Law and Jurisdiction –Pack to be sent out later once all details are finalised - real drive to get all committed parties to sign up to side letter and rules………

Market Reform Electronic Claims Page 13 Other Immediate Next Steps Repository Rules to be agreed and distributed to firms November Release to fix faults (minor) found in Phase 5 MAT. Continue to ramp up on and support new Live partnerships Expected delivery of signed-off Phase 6 Business Design into MAT early Q Current live implementations aimed for end Feb – beginning March Things change and we won’t have thought of everything There will be more issues and enhancements

Market Reform Electronic Claims Page 14 What will the claims infrastructure in the London Market look like in 5 years? –ECIS Group formed included representation from Brokers; LMA & IUA –Met between March and June 2006 and drafted the ‘Green Paper’ –Green Paper provides a high level end vision (3-5 yrs) for the claims infrastructure in the London Market –Peer to Peer ACORD messaging will be the norm ECIS Subgroup formed to discuss the end vision in more detail (July to October) This subgroup drafted A&S Claims Process Flows document (Peer to Peer claims messages) Describes when the different types of ACORD claim messages will be sent /received Highlights the implementation issues to be addressed e.g Transition/Legacy More detailed work will be required by the early implementers of the end vision Claims Infrastructure Strategy

Market Reform Electronic Claims Page 15 Update on A&S Repository

Market Reform Electronic Claims Page 16 Context - Restatement of overall A&S Objectives Rationalise and streamline business processes, specifically: –Speed up premium and claims payment –Remove reliance on paper –Reduce errors and reconciliation by capturing richer data once –Enable back office rationalisation –Introduce flexibility - process the way the business requires rather than the business being driven by constraints Implement international standards for the communication and processing of accounting & settlement data (the ACORD XML RLC standards) Provide a firm base for the future

Market Reform Electronic Claims Page 17 Repository Broker loads slip, LPANs and supporting documentation to repository thereby removing paper (and vans) –Three methods: –Direct Load – –DRI Message Carriers can gain access and view and download documents DRI enabled repository that also enables direct loading and enquiries to: –deliver documents to Xchanging Ins-Sure Services for checking –deliver documents directly between brokers and carriers i.e. in support of non-bureau or P2P processes

Market Reform Electronic Claims Page 18 Repository Benefits and Implications Faster turnaround times for documentation since “van time” is eliminated. No “van time” and speedier query resolution means signed lines available quicker Speedier resolution of queries will reduce the volume of rejections DRI functionality consistent with ECF. Brokers have options on how to connect, DRI Push, DRI Pull or Direct load (or additionally for delivery to Xchanging for checking) Gives insurers access to a copy of the slip and other premium submission documentation in the repository Carriers can be notified as a slip is loaded on the repository thereby allowing signed lines to be communicated sooner, thus allowing speedier exposure management Utility function of the repository, without XIS processing, allows broker to distribute documents in a controlled manner to specified parties

Market Reform Electronic Claims Page 19 Direct Load

Market Reform Electronic Claims Page 20 Direct Load

Market Reform Electronic Claims Page 21 Repository Timescales Project documentation signed off – on target by end of April 2006 Build time - this is being delivered in three releases Release 1 – Direct Load and Upload –NOW LIVE –Around 2,300 transactions processed since the ‘go-live’ weekend of the 9/10 th September. Release 2 – DRI Functionality –MAT Date – Ongoing at present –Go live Date – November 2006 Release 3 – Utility Repository –1 st Quarter 2007

Market Reform Electronic Claims Page 22 Questions?

A&S – Publication of Design and Measurement Update Brian Austin / 25 th October 2006

Market Reform Page 24 Publication of A&S Strategy Design MRG approval to publish now received Business Design and supporting Technical Information with covering letter Context is three work streams: –Measurement –Insurers’ Market Repository –End Vision

Market Reform Page 25 Documentation Key Points Concentrates on End Vision – full implementation of electronic processing using ACORD messaging Deliberately bold Few caveats why difficult or slow to be realised Not prescriptive on implementation paths Optional implementation paths for trading partners to select Will influence Reform agenda for 2007, including e:placing and e:claims

Market Reform Page 26 Key Issues Use or otherwise of “post placement” message – use of such a message will be optional for implementers of P2P framework Claims processing – documentation illustrates how approach to A&S and claims processing can be consistent with hubs and existing claims schemes Statistical and regulatory data – Lloyd’s is working with managing agents in this area

Market Reform Page 27 Use of the Documentation Highlights process flows and message types Not a formal technical design – it is for each firm to produce their own Set against the context of the other Reforms, eg IMR LPAN, firms should: –Assess impact on current process and evolve new ones –Investigate message transport mechanisms –Consider document repository interoperability and its implications –Familiarise with referenced ACORD documentation –Develop a clear strategy for business units and systems to improve A&S processes

Market Reform Page 28 A&S Measurement Regime Sponsored by A&S Project Board Aim to create transparency of today’s paper process Publish XIS checks as applied today Capture data from XIS and analyse Market performance eg –de-linking take up, –quality of broker submission, –timeliness, eg unwelcome trends (eg submit close to SDD) Identify quick wins and educate to improve performance as a prelude to: –A&S implementation proper –Use of ACORD messages –Validation at source in broker systems

Market Reform Page 29 Checks/Procedures Publication Status All Lloyd’s checks published except for detailed overseas checks Lloyd’s Tax rules published IUA checks readied and awaiting sign off IUA Tax “mat” ready for publication LPAN completion guide published Work on education material for accounting splits being prepared

Market Reform Page 30 Reports Status First graphs and tabular data received from XIS and to be published on MRPO web site Regular monthly updates will be added Dialogue between IUA and XIS for company market reports begun Graphs will include: –XIS query and rejection percentages –source of files eg Repository, E:LPAN2 etc –Common areas of failure

 ACORD ACORD Presentation to Solutions Providers October 2006

SLIDE 32 ACORD View of London Roadmap

SLIDE 33 ACORD View of London Roadmap GOALS  Introduce greater efficiency to London market processes  Straight-through-processing  Improved data quality  Increased data quantity / availability  Improve the service experience for clients  Increased certainty and transparency  Faster turnaround of assets and payments  Grow local and international business opportunities  Develop a scalable infrastructure capable of supporting next tier of business benefit  “Start small and grow” rather than a “Big Bang” change

SLIDE 34 ACORD View of London Roadmap TRENDS  Increased regulatory pressures nationally (FSA, Lloyd’s franchise standards) and internationally (Sarbanes- Oxley, Spitzer)  Downwards pressure on costs, leading to outsourcing, off-shoring and consolidation  An acceptance that technology can support the business process(es)  Emergence of e-business initiatives – Placing, Accounting & Settlement and Claims  London-based firms establishing a presence in Bermuda  Increased overview and measurement of market participants’ performance in key areas of client care and efficiency

SLIDE 35 ACORD View of London Roadmap ENABLERS  A consistent international business process  Reduce “Londonisms”  International data standards for common business messages  A robust, standards-based, messaging infrastructure (AMS, DRI), scalable for future needs (AWSP, Web Services, SOA etc.)  Continuous assessment of market performance measurements

SLIDE 36 ACORD View of London Roadmap ISSUES  Achieving standardisation of processes  Achieving market consensus  Managing transition from pure bureaux-based processing to a mixture of bureaux and direct processing  Nervousness in capital investment for centralised technology  Legacy systems / lack of systems  Alignment of implementation priorities

SLIDE 37 ACORD View of London Roadmap SUMMARY  Improve client service  Make London easy to do business with – seamless, simple, fast & compliant  Make London more cost-effective  Ensure infrastructure is scalable  Automate processes  Ensure regulatory compliance and best-practice are designed in from the outset  Highly standardised processes and technologies  Flexible to allow for “bespoke” nature of business

SLIDE 38 ACORD View of London Roadmap

SLIDE 39 ACORD’s Key Projects for London  Document Repository Interoperability  Placing Implementation Guide  Global Placing Document

SLIDE 40 Key Challenges

SLIDE 41 Change Agents / Focal points of Change

SLIDE 42 Approach

SLIDE 43 Technology

SLIDE 44 Projects Phasing: Placing

SLIDE 45 Projects Phasing: Accounting & Settlement

SLIDE 46 Projects Phasing: Claims

SLIDE 47 London office: LUC - Suite 1/3 3 Minster Court Mincing Lane London EC3R 7DD UK World Headquarters: Two Blue Hill Plaza 3rd Floor Pearl River, NY USA

Presentation name 00 July FUTURE APPROACH TO COMMUNICATION