ECF Binding Authorities John Ticehurst 8 May 2009

1 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Introduction Work conducted at request of ECF User Group and in conjunction with them Project initiation reviewed by AAC, MRG and ECF user group Group of binder brokers and carriers involved in fact finding AAC, MRG and ECF user group reviewed findings and now with you to review Background to co-lead problem General binders ECF usability Summary of findings Outline solution proposal Dependencies Prototype approach Outline timetable

2 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Background to Co-Lead Problem Binders represent approximately 20% of Lloyds claim volumes Could be 60-80% of binder contracts impacted by co-lead A Claim on a certificate bound off more than one binder Each binder has a different leader Claim may have more than one carrier with lead role Results in requirement to identify & co-ordinate responses Currently results in such claims not being supported by ECF Can be same London broker or different London brokers on same claim

3 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. General Binders Usability Amounts cannot be held on individual entries Bordereau and individual claims cannot be viewed together Cash losses require transaction on bordereau and individual entries Cash losses require agreement to both transactions at the same time Limited flexibility for differing agreement roles (e.g. exclude XCS or lead) Relationship between individual and bordereau not established Loss funds difficult to manage Net accounting is not currently supported

4 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Summary of Findings This is predominantly a Lloyds issue Small volume of London Market company participations – not handled via central systems (verify at each stage) Co-leads through different brokers – seems no reason to exclude Through same broker – need to associate claim file to multiple covers and record agreement rules Viable solutions dependent upon resolving general ECF binder handling To resolve via CLASS would be costly and time consuming Options to avoid significant CLASS development (aim to be cross market) Strategic option exists for binders as a whole Need to prototype binders to prove design

5 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Proposal A solution for all binders, not just co-lead binders and not just Lloyds Prototype –Initially develop using storyboards –Develop working application –Process extensive variety of binder cases via prototype –Review outcome of prototyping Prototyping has no dependency on other development plans for 2009 If prototype successful implement ECF binders Final solution does have some dependency on other elements being delivered Full set of binder modules (premium and claim) envisaged in future – in recognition of market demand (not included in prototyping) ECF binders functions will be complementary to full binder modules Prototyping will not begin until documentation and firm proposal for prototyping to ECF User Group and MRG – end May

6 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Establish the contract & rules for handling Differentiate the following; –Claims –Bordereaux –Cash Losses –Loss Funds Identify and coordinate co-lead claims Present bordereaux alongside corresponding claims Agreement to cash losses in one place Hold financials against individual claims – without duplicating reserve on bordereaux We will assess appetite and approach for net accounting (this will not be included in initial prototyping) Description of Outline Process

7 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. ECF Binders Dependencies Critical dependencies (must be delivered prior to or as part of binders solution) –Broker claim entry – new user interface –Claims workflow triggers (CWT) &/or new carrier user interface including writeback –Claims database – available as full operational datastore –Access control database – supporting inputs from sources other than CLASS –New version of LIMCLM for binder brokers only (minor change & not mandatory) Non critical dependencies – preferably implemented but not essential –Document file viewer (although significant impact on usability if not included) –ACORD broker input and response –Translation from LIMCLM to ACORD There may be other potential dependencies which emerge during prototype stage

8 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Indicative Timeline Tentative Dates

9 © Xchanging 2008, no part of this document may be circulated, quoted or reproduced without prior written approval of Xchanging. Conclusions What we need you to do; Provide feedback to the presentation Support the concept Participate in prototyping and research We will provide regular updates Contact Details; Laura Bramble Direct Tel: +44 (0)