Excellence in all we do Mitsui Sumitomo at Lloyd’s Endorsements – A Carriers View Colin Smith/Mark Brock 30 th November 2011

Let’s start with a thought………. "All great masters are chiefly distinguished by the power of adding a second, a third, and perhaps a fourth step in a continuous line. Many a man has taken the first step. With every additional step you enhance immensely the value of your first." Ralph Waldo Emerson

The MSIUL Strategy “Establish a cost effective “Market Position” and bring about cultural change through a step change model” Invest when benefits are clearly defined and proven Invest when take-up is consistently at an optimum volume Consider data integration later Work with existing service providers to optimise economies of scale Solution: Stand alone “hosted” solution until volumes derive benefit Minimise set-up costs and maintenance costs Optimise existing functionality with “light” integration

The MSIUL Experience – Volumes Marine Hull and Cargo

The MSIUL Experience – Volumes Specie

The MSIUL Experience – Volumes Professional Risks (PI)

The MSIUL Experience – Volumes Property

Do the benefits currently justify the cost? Forecast for 2011: £14.83 per endorsement received via The Exchange Take-up will reduce unit cost but …………….actual volume must increase soon for this to remain viable. Annual Licence for the Message Management Tool The Exchange licence beyond Year 3 Messaging Costs from other Service Providers

The MSIUL Experience – Benefits Have you seen previously un-seen endorsements? “Yes, in particular Follow Market Notifications eg Hull listings, Survey Fees, TRIA Declinatures and Bordereaux are good” What in particular is easier: “the agreement of fees, its a 10 second job to agree and we get a copy” “Quicker on simple endorsements especially bordereaux” Enhanced control and automated routing saves time and effort Reduced risk of documents being misplaced. Timeliness of processing onto Underwriting systems has reduced by over 24 hours.

The MSIUL Experience – Challenges Has e Endorsements changed the way you operate? “Too early, its not currently business as usual” and “we need to see the volume” “Volume appears to be dropping” With a stated target of < 24 hour turnaround times, is this realistic? “We’ll check electronic endorsements 3 times per day” “Box hours do limit immediacy of response” Do you think there has been a change in process? “Brokers just want to get it done” and “they were coming to the box anyway” Would you turn a broker away and ask for it to presented electronically? “Not at present, our service is to the broker and client” Do queries you raise get a timely answer? “can take days to go backward and forward if the query is for example a change in Exposure” “Need to mimic immediacy when adding AP/RP” What would improve the process? “brokers not always providing useful accompanying narrative”

The future – Can e Endorsements truly deliver Long Term Benefit and ultimately a streamlined placement Process? Mark Brock – Head of PI Underwriting The last 25 years – have we changed? A 2 way deal Brokers have to invest the time, energy & hope to send underwriters information Underwriters must maintain the deal momentum by providing an appropriate level of service Change is not easy - Keeping London Competitive The future of our market may very well rely on change

In Summary……….. As a business, we are committed to the appropriate use of electronic support for placing and endorsements: We need to achieve critical mass NOW from ALL Brokers to further embed and reduce response times We still need to change culture “at the coal face” We should accept that face to face negotiation and agreement is preferred/acceptable in some cases We will agree all endorsements based on the method of broker presentation There needs to be a commitment to reduce transactional costs across the market