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

2. Electronic Claims 2 Agenda Introduction and WelcomeJohn O'Neill Status review Ian Mallery Market reform contextMike Smith Binders work in progressRich Woodhams Brokers view Trevor Maddison LMA SDGMartin Dyer Next StepsIan Mallery Questions and closeJohn O’Neill

3. Electronic Claims 3 Status Review Ian Mallery ECPG & Marlborough

4. Electronic Claims 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. Electronic Claims 5 Status today Key Enhancements in 5 Phases Phase 1 See all documents in one view Completed February Phase 2 Leader control of file/Improved searching Completed April 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

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7. 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. Electronic Claims 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. Electronic Claims 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. Electronic Claims 10 Market Reform Perspective Mike Smith Market Reform Programme Office

11. Electronic Claims 11 London Market Objectives To implement the electronic infrastructure for the London market to negotiate, settle, and record claims quickly and efficiently and to achieve a critical mass of live usage.

12. Electronic Claims 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. Electronic Claims 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. Electronic Claims 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. Electronic Claims 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

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17. Electronic Claims 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

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

21. Electronic Claims 21 Take Up Participants 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 Class of Business Marine Hull Aviation Direct Reinsurance PI Non Marine Property Binding Authorities

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

23. Electronic Claims 23 Public Commitment to participate Brokers committed to deliver new claims to Lloyd’s electronically Aon Benfield JLT Marsh Managing Agents committed to deal electronically with new claims AmlinBrit FaradayHiscox LimitMarlborough St Paul Travelers SVBWellington

24. Electronic Claims 24 Binding Authorities Richard Woodhams Faraday

25. Electronic Claims 25 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 Binders & ECF

26. Electronic Claims 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. Electronic Claims 27 Desktop access, plus linking claims Block UCR Indiv. UCR Indiv. UCR Indiv. UCR

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

30. Electronic Claims 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. Electronic Claims 31 Issues Set the scene 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

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

33. Electronic Claims 33 The repository+CLASS model UMR UCR 1 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 Key Issue 2. “Data Levels”

34. Electronic Claims 34 The repository+CLASS model UCR 2 UMR UCR 1 UCR 3 UCR 2 TR1 TR2TR3 TR4 Policy Claim Transaction

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

36. Electronic Claims 36 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 Key Issue 2. “Data Levels”

37. Electronic Claims 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. Electronic Claims 38 Next Steps 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

39. Electronic Claims 39 Working Party 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 Claire.Bulman@lloyds.comClaire.Bulman@lloyds.comLloyd’s Ext: 6513

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

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

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

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

46. Electronic Claims 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. Electronic Claims 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. Electronic Claims 48 Next Steps Ian Mallery ECPG & Marlborough

49. Electronic Claims 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. Electronic Claims 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

51. Electronic Claims 51 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?  How many need general computer training?  What is your approach to reviewing claims information if you are a follower?  How will the leader’s role change with responsibility for controlling the file?

52. Electronic Claims 52 Technology Requirements PC specification  Windows 2000 SP1 and higher, Windows XP  Microsoft Java Virtual Machine Version 5.0.3802 or higher  Pentium 2 750 MHz and higher, 256 MB RAM, 25 MB of free space  TCP/IP Networking Protocol  Internet Explorer Version 5.5 SP2 or higher  Java VM: Microsoft JVM 5.0.3802 or higher  Sun JVM Plug-in 1.3.1_07, 1.3.1_08 or 1.4.2 Internet connection  companies decide on the appropriate connectivity depending on their own requirements  Variables include number of users, number of clients, size of files, time taken for review of files Software packages supported

53. Electronic Claims 53 Other Electronic Initiatives ECPG Terms of Reference expanded to be the reference group for the impact of other projects on claims practitioners  Claims Minimum Standards  CAF/Claims Tracker  Lloyd’s Claims Scheme rewrite  Solution for Binders  SCM changes -Leader reserves  Accounting & Settlement

54. Electronic Claims 54 Contacts For information  Mike Smith & MRPOLloyd’s  Ian Mallery & ECPGMarlborough  Tim WillcockLMA  John TicehurstXIS  Trevor Maddison & BEFITMarsh  Martin Dyer & SDGSt Paul Travelers To participate in implementations  E-mail claims@lmp-office.com

55. Electronic Claims 55 Questions and Close