Electronic Claim File Briefing Development and Implementation update 1 st November 2005

1. Electronic Claim File BriefingDevelopment and Implementation update1st November 2005 Follow up to last update and demonstration on 1st March 2005

2. Introduction and Welcome John O'Neill Status review Ian Mallery Market reform context Mike Smith Binders work in progress Rich Woodhams Brokers view Trevor Maddison LMA SDG Martin Dyer Next Steps Ian Mallery Questions and close John O’Neill Agenda

3. Status Review Ian Mallery ECPG & Marlborough

4. LMA ECF Objective • To replicate today’s 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

5. Status todayKey Enhancements in 5 Phases • Phase 1 See all documents in one viewCompleted February • Phase 2 Leader control of file/Improved searching CompletedApril • Phase 3 ACORD DRI Completed October • Phases 4/5 CLASS @ Lloyd’s data through GUI/Seamless link • Merged into single phase • Detailed specification completed • Re-planned, including key change requests completed • MAT expected to start Mid-May 2006

7. Design Sign Off – June 2005 • Sign off pack • ECF High Level Rules • ECF 13 Jan 2005 Business Process Description • ECF 17 Jan 2005 Full Requirements Definition • ECF Business Process Models (A and B) • ECF Phase 4/5 Full Business Design • ECF Screen Flow • ECF Screens – Search List & Summary • ECF Screens – Enquiry • ECF Screens – Actions • DRI Diagram

8. Business Operability Issues • Two way interoperability to ACORD DRI standards • Solution in hand • Big Issue - driven by the CLASS responses • Need to ensure Concurrent Access • Ensure timely reserving • Solutions available • Mapping of response to distinguish agreement from noting • Notification message to agreement parties – to ensure SCM • Also available to followers • Followers list added to CLASS • Needs a change in broker practice for settlements with changes in incurred • Provide incurred change separately from settlement request (currently under discussion with brokers)

9. 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 • It’s the insurers’ file • concurrent access to all subscribing insurers • always available

10. Market Reform Perspective Mike Smith Market Reform Programme Office

11. London Market Objectives To implement the electronic infrastructurefor the London market to negotiate, settle, and record claims quickly and efficientlyand to achieve a critical mass of live usage.

12. Electronic Claim Files • Enable parallel presentation to insurers • Reduce overall transaction time • Improve transparency of process • Underwriters can control their own work load • Allow brokers to concentrate on those claims where value is added • Claim file always available to insurers • Fundamental pre-cursor to the LMP objective of streamlined claims agreement

13. Governance 1 • Directed by MRG - Brokers, Companies, Lloyd’s • through Claims Infrastructure Project Board • Programme Office Owns • implementation timetable • issue definition and resolution • Market associations’ claims groups • to resolve market wide claims practice issues.

14. Governance 2 • LMA • Managing Agents manage contractual delivery to them from XIS • Claims practitioners define processes and functions • IUA • Formed a group to review function • Discussing charging mechanisms • LMBC • BEFIT – meets to review impact on brokers

15. Overall Scope • Delivers an interactive Insurers’ Market Repository to carriers • Interactive service available to brokers • At a price • Adopts ACORD standards for the transfer of electronic documents • To/From brokers’ repositories • At no charge to brokers • To/From carriers’ repositories

17. Systems Processes and Procedures Manual • Documenting how the market process works • NOT how to manage a claim • but where the systems fit and how to use them • Starting with Lloyd’s • working draft prepared by LMA ECPG • under review with ECPG and BEFIT • being extended to include IUA

19. Implementation • Broker-driven • with Lloyd’s and IUA carriers and XCS • by classes of business and risks • programme office monitoring progress • New claims and their subsequent transactions • Using today’s CLASS and repository • in parallel with the enhancements • early experience of electronic work • assess impact on procedures and processes

20. Take Up Volumes – 26th October 2005 429 Advices Of which 291 New Advices

21. Brokers Benfield Cooper Gay Guy Carpenter Marsh Millers Willis (in progress) Aon (waiting for DRI) Carriers Aegis Amlin Chaucer Faraday Hiscox Kiln Limit MAP St Paul Travelers Aspen Re Markel Take Up Participants Class of Business Marine Hull Aviation Direct Reinsurance PI Non Marine Property Binding Authorities

22. Ace Advent Atrium Brit Liberty AIG Allianz Beazley Global Aerospace Wellington Carriers Wanting to Participate

23. Brokers committed to deliver new claims to Lloyd’s electronically Aon Benfield JLT Marsh Managing Agents committed to deal electronically with new claims Amlin Brit Faraday Hiscox Limit Marlborough St Paul Travelers SVB Wellington Public Commitment to participate

24. Binding Authorities Richard Woodhams Faraday

25. Binders & ECF • Numerous advantages for handling binder claims via ECF • However some significant technical issues not applicable to open market claims • Solutions can be considered “work-arounds” pro tem, pending a tactical longer term solution • Aim of this series of slides is to introduce you to those issues

26. Binders & ECF • Binder characteristics: • Significant level of Lloyd’s premium income is due to binders • Bordereau of losses, reported monthly • Volume (if only the bordereau themselves) • Opportunities to manage workflow • Individual losses (above coverholder/ TPA’s handling authority) all of which may need to be cross referenced with the bordereau

27. Indiv. UCR Indiv. UCR Indiv. UCR Desktop access, plus linking claims Block UCR

28. Binders & ECF • Additional benefit (in some instances) to enable data entry to be pushed to nearer the source of origin • TPA • Coverholder • Interaction with experts own repository

29. Binders & ECF Broker C/Holder Leader Leader Insured CLASS TPA XCS XCS Repository

30. Binders & ECF • Additional benefit (in some instances) to enable data entry to be pushed to nearer the source of origin • TPA • Coverholder • Interaction with experts own repository • Enables timely CAF (plus Minimum Standards generally) on the sizeable volume of claims generated under binders • Enables tracking of the claim agreement process • Plus, reduces a significant volume of paper

31. Issues • Early implementers: • Millers, Hiscox & XCS • Marsh, St Paul Travelers & XCS • Binder Group (as a sub set of the ECPG) • Initially to identify the potential binder process(es) • Latterly, to understand and document the issues arising Set the scene

32. Key Issue 1 – “Duplication” Increased volumes of transactions, on above authority (but below £/$100k) claims Potential for duplication of reserves both on block UCR and within individual UCR’s

33. A valid CLASS entry “creates” one UCR page (and a UMR page, if first advice) on the repository, for the lodging of claims and coverage info, respectively UCR 1 The repository+CLASS model Key Issue 2. “Data Levels” UMR

34. UCR 2 UCR 1 UCR 3 UCR 2 The repository+CLASS model Policy UMR Claim TR4 TR2 TR3 TR1 Transaction

35. UCR 2 UCR 1 UCR 3 The binder on ECF model Key Issue 2. “Data Levels” Binder Slip held at UMR level UMR Certificate Certificate Certificate Policy coverage info, for each declaration will need to be stored also at claim (UCR) level

36. Key Issue 2. “Data Levels” • eg. CLASS holds only one “cover period”, yet for binders we have: • A binder period and • A certificate period • Plus certain “financial limit” fields • Finally, certain “name” fields

37. Key Issue 3. “Block Splits” • Regulatory Block Splits • XCS use a “multi block” facility within their system • automatically links constituent parts of a block collection over the various regulatory State splits • 1) Repository works at the UMR/ UCR level for each claim arising under a policy • 2) XCS system works at a UCR/ Claims Office Reference (and then, later, at TR) level • Which in turn, creates a need for further work-arounds, pro tem.

38. Discover and understand the issues Merit of early implementations Consider both: “Short term” workarounds to enable early implementation and increase volumes Work to develop and introduce longer term strategic solutions Contact Claire Bulman Lloyds Business Process Reform Lloyd’s Ext 6513 Claire.Bulman@lloyds.com Next Steps

39. Murray Edwards & Steve Spicer Miller, Charles Lee Cooper Gay Ian Mack, Graham Avery & John Clouston, Claytons Martin Chapman, Guest Krieger David Bartington, Marsh, Paul Spicer, Benfields Paul Bastien, XCS Paul Farrelly, Amlin Richard Foulger, Aegis Laura Bramble & James Side, Hiscox Heather O‘Sullivan, Ace James Roberts & Dave Southgate, Beazley Lucy Cooper & Neil Riddington, Atrium Rich Woodhams, Faraday Ray Tytler, St Paul Travelers Working Party Claire.Bulman@lloyds.com Lloyd’s Ext:6513

40. A Broker’s View Trevor Maddison BEFIT & Marsh

41. A Broker’s View • Target: • 9 months until e-claims becomes reality • Brokers committed to e-claims trading from 3rd Qtr ’06 • 4 brokers publicly declared their commitment

42. Highlights • Valuable lessons learnt from early implementers • 22 ECF partnerships created – 6 brokers/16 underwriters • 429 accumulative volumes transacted electronically to date • BEFIT and ECPG working closely with MRPO to ensure success of project • Broker questionnaire to be released to 169 brokers to understand broker readiness

43. Concerns • Process issues arising from early implementations • The ability of brokers and underwriters to adapt to change • Will there be sufficient number of brokers and underwriters trained and ready to go live • Big bang vs controlled introduction (new claims) • Handling legacy claims • IUA and Lloyd’s should work in partnership to realise electronic completeness for London market

44. Milestones • The infrastructure is being proved • Electronic claims is working! • Let’s stop walking paper around this market

45. Impact on Budget Martin Dyer LMA SDG & St Paul Travelers

46. Impact on Budget • SDG responsible for delivery of CLASS / 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

47. Impact on Budget • Funding provided via surcharges applied to SCM / USM messages • Revenue and Development costs (pre Phase 4/5 signoff) have been tracking to plan • Annual operational costs significantly under plan (est. £0.8m) • Q3 review with XIS of Phase 4/5 scope and Change Requests • Agreement now reached with XIS • Phase 5 scope finalised • Additional Change Requests included (some excluded!) • Budget fixed for this scope (surcharges to continue as planned with no changes) • Delivery to MAT in May 2006 • Minimum scope change and focus on delivery now is critical

48. Next Steps Ian Mallery ECPG & Marlborough

49. Next Steps • Phase 5 delivery to MAT mid-May 2006 • Delivers first version • of an integrated electronic claims service for Lloyd’s • replicating existing file electronically • with improvements where possible • companies and syndicates can see the same claim • Things change and we won’t have thought of everything • There will be more issues and enhancements

50. 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