1. Electronic Claims Its coming There will be pain to get the gain Who is your business sponsor? If you handle claims, the way you do your job will change ECF Key Messages

2. Electronic Claims Electronic Claim File Briefing Development and Implementation update 21 st March 2006 Follow up to last update and demonstration on 1 st November 2005

3. Market Reform Electronic Claims Page 3 Agenda Introduction and welcomeCarl Phillips Status reviewIan Mallery Brokers view Chris Reay Project funding and governanceMartin Dyer ECF & market reformAndy Brookes Questions and closeCarl Phillips

4. Market Reform Electronic Claims Page 4 Introduction and Welcome Carl Phillips Amlin

5. Market Reform Electronic Claims Page 5 Status Review Ian Mallery Marlborough & ECPG

6. Market Reform Electronic Claims Page 6 LMA ECF Objective To replicate todays file electronically –Not a Blue Sky Claims System development Based on existing products –Changes to CLASS out of scope (except look and feel) –Work with underlying software capabilities Provide a base product on day 1 –To be evolved once experience gained Post implementation of base product –Strategic review of on-going development –e.g. Third Party Access

7. Market Reform Electronic Claims Page 7 Status today Key Enhancements in 5 Phases Phase 1 - See all documents in one view Phase 2 - Leader control of file/improved searching Phase 3 - ACORD DRI (receipt of documents) Completed 2005 Phases 4/5 – Merged into a single phase CLASS @ Lloyds data through GUI, full DRI and Seamless link with documents in repository MAT starts 15 May 2006 (38 days to go!) Live – mid-September

8. Market Reform Electronic Claims Page 8

9. Market Reform Electronic Claims Page 9 Screen shot – Transaction Summary Screen Screens are currently under development and are subject to change

10. Market Reform Electronic Claims Page 10 Work Completed Since November 2005 Finalised initial change requests (Big Issue /DRI etc) Minimum System Standards – Sent to Compliance and IT Directors Convened Technical Implementation Group to advise on ACORD standards Review legal governance of electronic claims –Interchange Agreement –Initiated Legal Review of Electronic Responses

11. Market Reform Electronic Claims Page 11 Systems Processes & Procedures Systems Processes and Procedures –High-level guide –NOT a systems user manual or adjusting manual Workshops convened to review generic process and class of business variations –Confirmed generic process –Confirmed little variation by class of business –A key benefit was to identify the following operational issues:

12. Market Reform Electronic Claims Page 12 Systems Processes & Procedures (cont.) Identify the following operational Issues (Hotspots): –Big IssueResolved –BindersChange Request Raised –Bulks/BlocksAnalysis in Progress –Document RulesAnalysis in Progress –Delegation to XCSChange Request Raised –M.A. WorkflowChange Request Raised –Partial MarketsChange Request Raised –Non Broker TriggersAnalysis in Progress

13. Market Reform Electronic Claims Page 13 Binders & ECF Binder characteristics: –Losses within Delegated Authority –say £25k, reported via periodic bordereau –Losses above DA but below Market Reporting Threshold (£100,000) –require separate file but accounted via bordereau –Individual losses above DA & Market Threshold –require individual file & financials cross referenced with the bordereau

14. Market Reform Electronic Claims Page 14 The Repository + CLASS model

15. Market Reform Electronic Claims Page 15 The Repository + CLASS model

16. Market Reform Electronic Claims Page 16 Features Broker submits claim electronically –Enables parallel presentation to insurers –Reduces data transcription errors –Allow brokers to concentrate on complex claims Improved insurer access to information –Its the insurers file –Concurrent access to all subscribing insurers –24/7 access, worldwide

17. Market Reform Electronic Claims Page 17 Next Steps Phase 5 delivery to MAT mid-May 2006 Delivers first version –of an integrated electronic claims service for Lloyds –replicating existing file electronically –with improvements where possible –companies and syndicates can see the same claim Things change and we wont have thought of everything There will be more issues and enhancements –Legacy claims –Issues recorded

18. Market Reform Electronic Claims Page 18 A Brokers View Chris Reay Willis

19. Market Reform Electronic Claims Page 19 A Brokers View Mid-Sept launch date is not too far away now! 4 brokers publicly committed to supporting this initiative –Aon, Benfield, Marsh, JLT; –making up approx. 35% premium income* (Lloyds) 38 days to Market Acceptance testing –Benfield –Guy Carpenter –Marsh –Miller –Willis * Source: Lloyds Capital & Broker Relationships

20. Market Reform Electronic Claims Page 20 Highlights Valuable lessons continue to be learnt from early implementers 39 ECF partnerships created –6 brokers/17 managing agents, 2 companies – experience gathers pace Over 360 claims files Generating over 600 transactions electronically to date IUA Companies now actively participating in pilots – adding to the ground swell LMBC working closely with MRPO to ensure success of project Initial feedback from Lloyds Brokers has been positive – further follow ups / presentations planned for April / May

21. Market Reform Electronic Claims Page 21 Issues to consider Will there be sufficient number of market claims practitioners trained and ready to go live? Process issues arising from early implementations will restrict certain business classes / placing processes This is a significant cultural shift in how the London market will operate – are we really ready for it? The market continues to work together to resolve them This is the 1 st major step along a new path

22. Market Reform Electronic Claims Page 22 Looking to the future The infrastructure has been proven – weve got a good base Essential enhancements scoped and included in the continual development plan Electronic claims servicing is a realistic tool for the London market So lets do away with the luggage and stop walking paper around these streets!

23. Market Reform Electronic Claims Page 23 Project Funding & Governance Martin Dyer St. Paul Travelers & SDG

24. Market Reform Electronic Claims Page 24 The Role of the SDG SDG reports to LMA Market Processes Committee (MPC) Responsible for delivery of CLASS at Lloyds / ECF on behalf of Project fund providers (LMA Members) Tracks XIS performance against plans / budgets Manages changes to scope through Change Request Process Ensures Managing Agents are appropriately involved / informed Participates in Market Claims Infrastructure Project Board

25. Market Reform Electronic Claims Page 25 Time and Budget Summary On track for software delivery to process electronic claims across the Lloyds market No change to agreed USM & SCM surcharges Early implementation partnerships growing Substantial market testing and implementation tasks this year Will change working practices from paper to electronic for many claims practitioners Will not deliver everything on day one - need on-going maintenance and review of Change Request log

26. Market Reform Electronic Claims Page 26 Impact on Budget No changes to original funding arrangements 2006 surcharges: –34p USM & SCM for Repository running costs – reduction from 2005 –19p SCM for CLASS at Lloyds running costs –25p SCM from January 2006 for repository development –CLASS at Lloyds development (£597k) in three instalments Budget Position to the end of 2005 –Implementation, Infrastructure and Running costs£1,546,663 –Change Requests £ 365,000 –Total charges incurred£1,911,663 –Revenue from surcharges and other licence charges£2,786,259 –Surplus carried forward to 2006£ 874,596 –CLASS running costs waived for 2005 The project remains on budget

27. Market Reform Electronic Claims Page 27 Future Operational electronic claims by end 2006 for brokers, Lloyds & IUA Roll out for processing new claims will continue into 2007 –Increasing pressure on any non participants This is just the Base Camp - foundation to: –Migrate to ACORD business messages for claims –Eliminate CLASS differences across the multiple systems –Enable third party access e.g. loss adjusters –Move existing claims from paper to electronic –Offer client tracking of claims

28. Market Reform Electronic Claims Page 28 ECF & Market Reform Andy Brookes Market Reform Programme Office

29. Market Reform Page 29 ECF: Key part of the London process reform programme Overall aim: –A framework of standards for business processes that enables firms to deliver services efficiently to customers at a cost and level of risk comparable with other platforms Note: –Any costs inherent in a subscription market must be offset to deliver this comparability. –Any changes in business process must be managed in such a way as to avoid undermining the unique qualities/competitive advantages of the London Market.

30. Market Reform Page 30 ECF is not happening in isolation Claims beyond ECF –Change requests – no system stays put –Claims infrastructure to include IUA –Protocols (LMP2001); Lloyds Claims Scheme –Support Claims Strategy & Minimum Standards Integration with other reform workstreams –Accounting & Settlement –Contract Certainty

31. Market Reform Page 31 Integration with other workstreams Accounting and Settlement –Measurement checks; A&S repository; A&S strategy for P2P –Repository use –London market use of ACORD DRI Standards –P2P A&S: strategy questions for claims Contract Certainty –More certain contracts = fewer coverage disputes –Roles & responsibilities clearly defined –Repositories….again (e.g. model wordings)

32. Market Reform Page 32 Implementation approach Lead implementers Prepare to follow: –Commercial –Lloyds performance standards –Regulatory better MI pressure Sponsors; project managers

33. Market Reform Electronic Claims Page 33 Questions & Close Carl Phillips Amlin

34. Market Reform Electronic Claims Page 34 Access Can you access the internet from your desktop? Are you familiar with looking at messages, data and information? –On your Personal drives or My Documents? –On Shared or Network Drives? –On websites? The Insurers Market Repository is just another folder of documents –but market wide –24/7 access from anywhere –Home, overseas, or even in the office –controlled by CLASS security access

35. Market Reform Electronic Claims Page 35 What should YOU do now? Assess and plan for the impact on you –How many adjusters have you got? –How many will need access to this system? –Can you connect to these new services? –Who will be responsible for implementing in your agency? –How will you ensure they are trained in CLASS and the repository? –Are you as a leader prepared for the change of responsibility for controlling the file?

36. Market Reform Electronic Claims Page 36 Next Steps This is coming in September – are you ready? Deadline for nominating two people: –project leader, business sponsor Slides to go to compliance and head of claims 1 page letter to CEOs Contact:Market Reform Programme Office Ben Sayles Project Manager ben.sayles@lloyds.com

37. Market Reform Electronic Claims Page 37 ECF Key Messages Its coming There will be pain to get the gain Who is your business sponsor? If you handle claims, the way you do your job will change