Control Framework A warm Welcome to the august market Breakfast Group

Control Framework Breakfast Group agenda 9:00Arrival, Breakfast & networkingAll 9:20 WelcomeAli Dove 9:25Update on Central Services RefreshSam Nowell 9:50Update on phase II progress Jaana Rouvari -Top 3 issues raised -Brainstorm session 10:20Q & A All 10:30Close Ali Dove

Central Services Refresh Programme (CSRP) Driving Market Submission 3

CSRP - Where Are We Now? Carrier Benefits Sessions and Broker Workshops 4 POC Revised Draft FSR FSR Review Workshops 1:1 Benefits Discussion Impact Assessments Programme Brief FSR Review Approach Mid August End Sep Market Submission Project Brief Market Submission Analysis End July Broker engagement

CSRP - Introduction The aim of CSRP is to provide a vision of central services to help resolve key market concerns 5 Why was it initiated? Market concerns over the age of the technology estate and as a consequence the supporting business processes Lack of an agreed strategy regarding the markets requirements from Central Services What is CSRP? CSRP aims to produce an agreed vision, owned by the market, which defines the future of central services (relating, but not limited to, technology and processes) for the London market. At its core it should enable: Increased levels of service to the Client The removal of unnecessary Londonisms The market to create value Reduced operational risk

Draft FSR Client View Broker View? Carrier View CSRP - The Future Service Register The Future Service Register defines the analysis scope and todays view for future central services 6 The scope of CSRP analysis phase is defined by the Future Service Register (FSR) This describes todays view of the future central services, agnostic of provider, though the lenses of the different stakeholders.

CSRP – Programme Approach The FSR is being reviewed and refined through market workshops, subsequent projects will be benefits driven 7 Market Submission Prog 2Prog 3Prog … Review & Refine Prioritisation with benefits and value proposition Draft FSR Validated FSR Market Workshops

Current – Market Submission Landscape 8 Market specific processes adding complexity and cost Processing overhead absorbed by participants operations Disparate pseudo-duplicate records across multiple entities

CSRP - Driving Market Submission Development of the Future Services Register has provided very valuable insights… 9 Client Service Shorter end to end cycle times The ability for clients to interact directly when appropriate (e.g.. direct settlement or status information) How quickly decisions / money get to the client Removal of Londonisms Carriers should look at ways to reduce the burden placed upon brokers through the possibility of greater/alternative use of central services Benefits Focus Consensus exists that central services can be improved but changes must be business benefits led Customer Service Remove Londonisms Value Operational Risk

CSRP - Driving Market Submission ……particularly around the input side……. 10 Availability of Information Timely access to richer information The way that information is presented should be easier to use Differentiating between notification and information held for subsequent processing Classification of Information Centrally record information classified in a way that maximises efficient downstream utilisation Harmonisation To have common processing and integration between markets and originator types Help organisations better integrate their systems with central services Make central services available from any location in any time zone Customer Service Remove Londonisms ValueRisk

CSRP - Driving Market Submission …..and the operation of central processes 11 Great benefit in receiving data right first time Achieving standardisation by moving burdens from brokers to Central Services Carriers can directly add Information to the central record Higher quality information allows for better underwriting operations Maximise re-use and availability of high quality information to inform and anticipate actions The ability to make use of the large volume of centrally held information Great benefit in the ability to reconcile information without manual intervention More granular information would be valuable to carriers, especially where they do not lead Customer Service Remove Londonisms ValueRisk

Future - Market Submission Landscape 12 Market Submission aims to make Central Services easier to do business with, principally for brokers, but also for carriers too. The scope for Market Submission is expected to include moving London market specific processes, or Londonsims, to the centre. Market Submission is expected to enable interfaces to become more global; improve referencing and enable better, richer risk data.

Market Submission – 6 Core Elements 13

Market Submission and Genesis 14 Market Submission complements and is complemented by Genesis The LMA team have agreed that the CSR team have sign-off of key elements relating to data so as to ensure alignment in the use of standards; recognising that the DCS is logically at the start of the CCR Market Submission can support the DCS irrespective of whether central services passes the data onto the recipients, or centrally stores the data for reporting purposes only

Market Submission and Broker Needs 15 LIIBA requirements of the Lloyds and London Market broadly split across: Placing Binders & Coverholders Accounting & Claims 30 high level statements of need; of which CSR can provide, based upon initial analysis and assessment a solution to 20 and supports improvements for another 6 Market Submission can provide, based upon initial analysis and assessment a solution to 17 (of the 20) and supports improvements for another 5 (of the 6) Market Submission has the potential to deliver material improvements to the broking community; particularly in areas relating to Londonisms Work on-going with LIIBA to better understand the detail and areas of benefit.

Market Submission and the Utility Platform 16 Can treat the Utility Platform as any other Originator of data, assuming the Central Services have a role to play in the related business processes Supports the early capture of common data to eliminate re-keying and associated re-work Can help to deliver on the provision of an electronically agreed record of the contract via the CCR and Cross Referencing; in conjunction with the utility platforms own centrally held placing data Provision of centralised business rules to ensure market standards are met Supports the desire to see the acceptance and implementation of a single common data standard (ACORD), coupled with a minimum structured data set

Market Submission and LMG ALIGNMENT 17 CSRP shares with Future Processes the fundamental principle that:: Any insurer/service provider combination (including a bureau) will interact with brokers in the same way as other insurers i.e. not involving unique processes, data or query types.

Market Submission – 6 Core Elements 18 Lloyds & Londonisms – Removes or dilutes restrictive Lloyds and Londonisms - intended to make market access easier. Insulation - Mask central service complexity through the introduction of standard interfaces e.g. Cross Referencing & CCR. Enablement – Market Submission enables subsequent developments. For example carriers settling claims automatically because standard interfaces are implemented Centralised Business Rules Multiple Types of Originator Master Data Management ACORD Messaging Common Core Record Cross Referencing

For MORE INFORMATION 19 For more information on CSRP; contact your association: IUA - John Hobbs. Telephone: , LIIBA – James Livett. Telephone: , LMA – Rob Gillies. Telephone: ,

Questions? 20

© Lloyds Progress on Phase 2 21 Control Framework Initial meeting to introduce CF2 under way 55 managing agents in scope (13 new to Phase II) 42 face to face meetings completed Brokers on-board 80 broker meetings on CF2 to date Broker event on 17 th September

© Lloyds Progress on Phase 2 22 Control Framework Managing agents commenced analysis phase - key activities for year end are: 1.Project resources in place 2.Coverholder risk rating exercise 3.Risk rating reflected in audit schedule 4.Confirm project delivery timeline to Lloyds The risk rating exercise 1.Review and validate list of coverholders provided by Lloyds 2.Risk rate each coverholder 3.Provide list back to Lloyds 4.Lloyds to coordinate approach with managing agents where there are overlapping coverholder relationships with high/ medium risk ratings.

© Lloyds23 Control Framework Top 3 issues raised 1.Responsibilities of lead vs. follow 2.Delivery timeline 3.Validation of coverholders

© Lloyds24 Control Framework Brainstorm in your groups 15 minutes to brainstorm! Question 1 What should the responsibilities of lead vs. follow be in implementing the Control Framework? Question 2 What controls does the following market have over delegated business?

© Lloyds Q & A 25 Control Framework

© Lloyds26 Control Framework Close Further information on CSRP – Further information on Control Framework – Phase II Broker conference – Tuesday 17 th September 2013 Next Breakfast Meeting – Tuesday 24 th September 2013 Control Framework Phase I end of project celebration – Thursday 26 th September