LMG Forum23 June 2010

2

Confidence in Lloyd’s 2002-2010

10%

2%

46%

14%

44%

84%

2002

2010

Not very positive Quite positive Very positive

Base: All respondents (n=301)

Source: Q17 How positive do you feel about using Lloyd’s as a market in which to do business in the next three years, very positive, quite positive, not very positive or not at all positive?

3

Lloyd’s process performance v other markets 2004-2010

Base: All respondents (n=301)

Source: Q18b Compared with other insurance markets, how do you think Lloyd’s performs on each of the following aspects of business processing?

Net %age saying Lloyd’s ‘better’

Net %age saying Lloyd’s ‘better’

Oct 2001LMP slip

Dec 2004John Tiner Contract Certainty challenge

Jan 2006Contract

Certainty 65%

June 2006Market Reform

Slip

June 2007Contract

Certainty Code of Practice

Dec 2008FSA agree

legacy success

June 2007Market Reform

Contract

Dec 2007FSA agree Contract Certainty success

Nov 2009Exchange live

June 2010Endorsements

pilot

Dec 2007Market Reform

Contract Endorsement

EMRCE

Placing – modernisation timeline

5

RI3K

In 2009

1364 Individual users

203 Underwriting comparison

16974 Links bound in 8 different countries

4491 Endorsements

18402 ACORD Data messages

6

Legacy Policies

Legacy Policies

– With FSA agreement market wide measurement ended in December 2008

– Continuous improvement through

• Arrow visits & Underwriting Minimum Standards reviews

– Approx 239,000 legacy policies reduced to approx 29,000

Legacy policy reduction

-

100,000.00

200,000.00

300,000.00

2006 2007 2008

Date

Leg

acy

po

licie

s

Sept 2006IMR live

Nov 2006ECF live

Usability releases

Oct 2008IMR Agreement

signed

July 2009IMR upgrade

– robust infrastructure

in place

Dec 2009IMR security model

live – expands scope of A&S &

ECF

March 2010Time and motion

study – ECF twice as quick as paper

Sept 2010ECF2 live –

major usability

upgrade for carriers

May 200890% of OP

submissions via IMR

Insurer’s Market Repository timeline

8

How successful has the Lloyd’s market been at reform?

April '07 - 14.4% in scope

Apr 07 Dec 08

100

0

December ‘08 - >90% in scope

16,000 transactions per month82,000 claims to date

Money to client 40% faster

Electronic Claims

BENEFIT

9

Comparative service performance of Lloyd’sClear lead for Lloyd’s on all claims performance measures

Strong commitment to paying fair claims

High calibre claims people

Claims staff are committed to delivering excellent service

Highly responsive to broker needs

Processes claims speedily

Quick to agree and settle large complex claims

Base: All Claims personnel (n=150)

Q15: Thinking again about the five locations, London, Lloyd’s, Bermuda, the US and Europe, which markets do you most closely associate with excellence in each of the following areas? You can say as many or as few as you like. Please remember, even if you don’t deal directly with each market we are still interested in your perception.

10

ECF impact on service to clients 2009; started on the back foot, but Q3 and 4 trend is very positive...

Base: All Claims Personnel Q2 (n=50), Q3 (n=50) Q4 (n=51)Q19b: Thinking now about ECF. do you think that the introduction of ECFs has improved service to your clients?Q19b1: Would you say the service has stayed about the same or got worse?

11

How successful has the Lloyd’s market been at reform ?

Jan ’08 – 45% Original Premiums

Apr 07 Nov 08

100

0

62,976 transactions per month456,305 transactions to date

November ‘08 - 96% Original Premiums

Faster money movement to the Managing Agent.

1 day = £600,000 investment income on average

Contributing to profitability

Accounting & settlement

BENEFIT

12

Why Have a Bureau Model?

Net Settlement – reduces working capital requirements. For example, in 2009 XIS processed £46.7bn of premium through central settlement, which netted to £7.7bn of actual cash movement

Leverage scarce skills – multiple followers benefit from sharing scarce technical skills

Once only data entry and processes – enter data once for multiple parties, especially in the subscription market

Faster movement of cash – rolling daily settlement on 1 day, 3 day,1 week,1 month

Reduced broker and insurer back office effort (and cost) – Independent studies demonstrate a factor of 5-9x reduction in numbers of accounting staff required to process Lloyd’s v. equivalent number of open market (non-subscription) claims and premium transactions

Enforcement of standards – both business processing and electronic messaging – multiple bilateral agreements not necessary

Single connection – connect to 1 trading partner, connect to all – accelerates electronic take-up

Complex workflow orchestration – authoritative view of process status across multiple parties. Especially in the subscription market e.g. ECF / Class@ Lloyd’s

The London Bureau demonstrates the business value to all participants that a ‘hub’ type business and technical service can bring compared to typical “Open Market” practices

13

Loading Documents Month Dec J an Feb MarSLA Name Target Average

(Secs)Measure

2 1 Core Service Minute 7 s Green >= 98%Amber < 98% - >= 95%Red < 95%

3 3 Core Service Minutes 10 s Green >= 98%Amber < 98% - >= 95%Red < 95%

4 1 Core Service Hour Green >= 98%265 s Amber < 98% - >= 95%

Red < 95%

5 1 Core Service Minute 7 s Green >= 98%Amber < 98% - >= 95%Red < 95%

6 3 Core Service Minutes 7 s Green >= 98%Amber < 98% - >= 95%Red < 95%

Repository Availability Month Dec J an Feb MarSLA Name Target Measure

9 Green >= 98%Amber < 98% - >= 95%Red < 95%

100.00%

100.00%

99.16%

99.30%

99.82%

99.97%

100.00%

100.00%

99.43%

98.90%

99.82%

99.93%

5 MB Document Download

1.5 MB Document Direct Load

5 MB Document Direct Load

Document; Permitted Viewer

1.5 MB Document Download

98% available during Core Service Hours

IMR Access (Production) 07:00 - 19:00 Core service days

99.90%

99.07%

99.74%

99.90%

99.96%

100.00%

99.20%

99.22%

99.77%

100.00%

100.00%

99.85%

Key Metrics

• 40m page hits per month

• 400k DRI messages per month

• 6,500 registered users

• 10.5 m documents stored

IMR – SLA Performance & Key Metrics

14

Amlin

1. G6 – why, when, how, what and whether

2. Xchanging

3. Lloyd’s

4. Internal Amlin issues

15

% of risks placed electronically: current and 2012

Base: All respondents (n=301)

16

Where and how risks are placed: current and in 2012

Base: All respondents (n=301)

Current 2012

17

Finish What We Have Started Electronic Claim Files

Initiative Sponsor Project Manager

Aim Target

Claims Usage Dave Matcham David Gittings

John Hobbs Gary Bass

Achieve full usage of ECF for new non-binder claims.

Q4 2010

Prototype - build Q1 2010 Pilot usage Q2 2010

ECF for Binder claims Simon Cooper Gary Bass

Build & implement production system – not yet authorised

[Q2 2011]

ECF2 Release 1 Simon Cooper Gary Bass Implemented Q2 2010 Legacy claims Dave Matcham

David Gittings John Hobbs Gary Bass

Increase ECF usage Q1-Q4 2010

Accounting & Settlement Initiative Sponsor Project

Manager Aim Target

Cease paper premium processing

Nigel Roberts Mark Barwick Eliminate paper premium processing within scope of A&S

Q2 2010

E-Accounts Initiative Sponsor Project

Manager Aim Target

Accounts via ACORD messages

Implemented and available for use Q1 2010

Insurers’ accounting entries service

Insurer agreed service implemented and available for use

Q3 2010

Take-up 40 broking firms live Q2 2011 Transactions

Nigel Roberts Mark Barwick

Full use by live firms Q4 2011

2010 Work-Plan

18

Electronic Placing Support Initiative Sponsor Project

Manager Aim Target

E-placing support David Gittings Rob Gillies Support take-up Q1–Q4 2010 Exchange validates use of 2009.1 ACORD format

Q1 2010 Use of technical standards Carl Phillips Sharmi Bakrania

Live use of new 2009.1 functionality via Exchange

Q2 2010

Endorsements pilot - scope & commitment

Define scope & obtain broker/insurer commitment

Q1 2010

Endorsements pilot -transactions

Run pilot Q2-Q4 2010

Endorsements pilot - review

David Gittings Rob Gillies

Review pilot Q4 2010

Right First Time Initiative Sponsor Project

Manager Aim Target

Reduce bureau queries and rejections

David Hough Chris Buer Steve Hulm

Reduce query and rejection rate to 50% of end-2009 figure

Q4 2010

Strategic Initiative Sponsor Project

Manager Aim Target

Future process model Tim Carroll Simon Collins Publish detail of proposed future model for consultation1

Q3 2010

1 Covering placing, accounting, claims, settlement & reporting; utilising end-to-end ACORD messages and a common claims platform.

2010 Work-Plan

19

The Future

Solvency II – Preparation

Solvency II – Delivering

Solvency II – Embedding