Market Reform Group Market Reform: Are we doing enough? Dane Douetil, CBE Chair, Market Reform Group 18 October 2007

Market Reform Page 2 Slip creation guidelines providing certain and consistent placing documentation MRC - complete Clear, unambiguous contracts agreed at formation Improving the speed of premium processing - delinked premiums IMR in use Delinking 57% (Aug) Contract Certainty - complete Early delivery of single insurance document to client Contract Certainty - complete PLACING & SETTLEMENT What have we achieved so far?

Market Reform Page 3 Contract Certainty Statistics 65% 74% 95% 91% 94% 90% 85% 95%

Market Reform Page 4 Contract Certainty Statistics 65% 77% 91% 86% 92% 84% 80%

Market Reform Page 5 Endorsements Claims IMR in use Electronic storing of documents allowing simultaneous access Pilot stage complete Project being implemented Improved speed of endorsement processing What have we achieved so far?

Market Reform Page 6 IMR Usage A&S OP only 36% 35% 28% 24% 21% 22% 19% 17% ECF 10% 30% 16% 21% 14% 11% 40% 45% 6% JanFebMarAprMayJunJulAugSep

Market Reform Page 7 Why do it? First class client service Early receipt of high quality contracts Rapid claims processing and communication with clients Rapid movement of premium and claim monies ‘Right first time’ processing Increased efficiency with lower operational cost Lower operational risk Flexibility to support bespoke business

Market Reform Page 8 Where are we going? MRG vision All risk submissions sent electronicallyAll claims processed and agreed electronicallyAll accounting and settlement of risks performed electronically – London to be the market of choice

Market Reform Page 9 What does the future hold? Further change is a given not an option –To maintain London’s competitiveness with other insurance centres –To maintain insurance industry’s competitiveness with increasingly sophisticated alternatives Embrace the new world which is and should be transparent and auditable –Don’t re-employ bad practice into electronic format Build on the successes of the last 3 years and learn the lessons of things that have not gone as well

Market Reform Page 10 Reform – lessons learned Collaboration works Decentralisation works Senior commitment vital - Need all constituents – brokers, companies & Lloyd’s - The era of large, expensive, centralised, single solutions is over - Standards and frameworks a better approach - Change must come from the top - MRG needs the key decision makers in the room

Market Reform Page 11 Reform – lessons learned Keep it simple Lead implementers Measure - Small is beautiful; one step at a time - G6 et al - Rigorously Targets - Demanding Communicate constantly at all levels

Market Reform Page 12 Measure & target Resource it Use standards don’t tweak Sponsor it Reform – What should it mean to you? Internal change programmes are the key to benefits realisation

Market Reform Page 13 Challenges ahead Current reform is only a stepping stone Insurance is a global business, reform needs to be seen in that context Need to preserve the advantages of the physical market place in an electronic world Insidious creep of complacency

Market Reform Page 14 Conclusions Measure and keep measuring Set targets Commun ication at all levels is key to success Clear framework Deliver in manag eble discree t phases MRG to keep leading

Market Reform Group Market Reform: Are we doing enough? Dane Douetil, CBE Chair, Market Reform Group 18 October 2007