Electronic Claims File Update The Old Library, Lloyd’s 4th September 2006

Agenda Introduction and Welcome Trevor Maddison A Broker’s View Trevor Maddison ECF and Market Reform Andy Brookes ECF Underwriter View point Carl Phillips Electronic Claims Files Steven Matthews Questions and Close Trevor Maddison

A Broker’s View Trevor Maddison Marsh and BEFIT

Electronic Claims Trading is Simple Electronic transfer of data and documents, broker desktop to underwriter desktop. Claims workflow managed from the desktop electronically. Removal of the paper claim file. Simple claims – straight through processing, no broker involvement. Claims advocacy – broking where it matters. Delivery of a quality client and underwriter service.

ECF – Key Messages Market reform is no longer a set of words. This project is real, ECF is real. In one weeks time the potential to trade new claims electronically with Lloyds syndicates (day 1 in-scope) will become a reality. The IUA are catching up fast, pilots have commenced and the commitment is there – we expect them to be live mid 2007. Reform of the claims process is happening, ECF is the catalyst to a modern market place. The London market is changing, market reform and electronic trading will work this time. Are you preparing for change?

Key criteria for ECF success Full commitment of all syndicates to trade claims electronically. Full commitment of IUA carriers to trade claims electronically. Full commitment of brokers to move to electronic claims trading within a reasonable timeframe. All new claims received in the 4th Qtr 2007 traded electronically, all brokers, all underwriters. Underwriters are making a commitment, brokers need to respond. There will be issues, this is not Big Bang brokers need to work in partnership with Underwriters to make ECF a London market success.

ECF & Market Reform Andy Brookes Market Reform Programme Office Page 7

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. Page 8

ECF is not happening in isolation Claims beyond ECF Change requests – no system stays put Claims infrastructure to include IUA Protocols (LMP2001); Lloyd’s Claims Scheme Support Claims Strategy & Minimum Standards Integration with other reform workstreams Accounting & Settlement Repository use; DRI standards; P2P strategy and claims Contract Certainty Roles and responsibilities clearly defined Repositories……..again Page 9

Implementation approach Lead implementers Prepare to follow Commercial Lloyd’s performance standards Regulatory Sponsors; project managers Page 10

E.C.F. Underwriter Viewpoint Carl Phillips Amlin & LMA Systems Delivery Group Page 11

Why Do Underwriters Need A Claim File? Good Business Practice - Easy way of supporting / evidencing decisions Justify Reserves and Payments to Shareholders FSA Requirements Lloyd’s Claims Management Principles and Minimum Standards Claims Agreement for Followers (CAF) - Consistency of information Goshawk / Tysers Page 12

Why An Electronic Claim File (E.C.F.)? Concurrent/Contemporaneous Access Transparent and Auditable Process Improve service levels to customers Removal of dead time (transporting files) Worldwide access to the file 24/7 Data Integrity and Backup Collaborative Agreement - Lloyd’s Claims Scheme/ Claims Agreement for Followers The Technology Exists - in everyday use by all London Market Practitioners Storage and filing requirements Page 13

To replicate today’s file electronically Based on existing products LMA ECF Objective To replicate today’s file electronically Not a Blue Sky Claims System development Based on existing products No changes to CLASS at this stage Seamless access to CLASS information and documents through an Integrated Repository using Windows Provide a base product in September 06 To be evolved once experience gained Post implementation of base product Strategic review of on-going development e.g. Third Party Access / Leader Reserves/Web Services etc. Page 14

Broker submits claim electronically Features Broker submits claim electronically Enables parallel presentation to insurers Reduces data transcription errors Allow brokers to concentrate on complex claims Facilitates improvements in claims settlement time Improves Customer Service Improved insurer access to information It’s the insurers’ file Concurrent access to all subscribing insurers 24/7 access, worldwide Page 15

Overview Page 16

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 @ Lloyd’s data through GUI, full DRI and Seamless link with documents in repository On target for September Roll out Go/No Go Decision 7 Sept Page 17

Systems Processes & Procedures Systems Processes and Procedures Guide Broker & Underwriter Collaborative Approach High-level guide NOT a systems user manual or adjusting manual Focuses on process Workshops have been convened to review generic process and class of business variations Confirmed generic process Confirmed little variation by class of business Many Issues identified and documented for resolution. Page 18

Types of claim The majority of all new claims can be processed via ECF. However there are certain circumstances that ECF has not been required to support and some other instances where system change or further definition of market processes is required to enable full support. Business or Claims types that ECF has never been required to support Claims on unsigned risks General Average Proportional treaties Scheme Canada Direct Livestock Claims Payable Abroad Letters of credit, loss reserves and Outstanding Cash Advance (OCAs) Bulk Settlements Business or Claims types excluded from the current implementation of ECF Solution is currently being developed Delegated Lead to XCS (other than 100% Delegation, which is in scope) Binding Authorities, Cover Collections and other Bordereaux Claims Require further analysis Political Risk Aviation verticals Certain Multiple OSND claims Third Party Access to ECF Existing paper claims files Page 19

Delivers first version Next Steps GO LIVE – September 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 BUT a step-change for the London Market There will be more issues and enhancements Legacy claims Issues recorded and initial plan for resolution Things change and we won’t have thought of everything Page 20

ECF is here and we’re ready MAT approaching completion Staff training underway 16 Managing Agents participating from next month Representing about 60% of Lloyd’s Market Capacity 5 Brokers submitting ECFs next month Representing about 40% of Lloyd’s Market Capacity There won’t be a paper file! Increasing commitment every week A Partnership Approach that Benefits all - But not least the Policy Holder. Page 21

Amlin’s Approach Experience and extracting maximum benefit Have built experience in ECF through 7 pilots across 7 classes of business with 7 brokers over 2 years All claims teams have been engaged in ECF, some since April 2004; claims handlers now looking forward to going live with Electronic Claims. Implemented new repository workflow system specifically to handle all claims electronically It works!

Amlin have begun internal training in preparation for live date. Amlin’s Approach Preparedness Amlin have begun internal training in preparation for live date. Little change for those that have used CLASS before Amlin confident that 80% of their new claims can be handled through ECF now without impediment. There will be pain to get the gain!

Electronic Claim Flies Stephen Matthews Tim Lovick Date: 4 September 2006

Agenda What is ECF? Process Overview Roles and Responsibilities Validation Checks Mandatory Rules Roll Outs Lessons Learnt System Overview Practical Help

…combination of new systems and procedures What is ECF? Market Repository Converged CLASS C@L ECF Tracker Workflow …combination of new systems and procedures

ECF Process Overview MARKET XCS ECF System XCS CLASS (XCS Internal System) Once all agreement Parties ‘Accept’ claim Document storage system Supplement claim details e.g. i. FIL ii. NAIC iii. TF codes Broker 4. CLASS CLASS Database Agreement Party SCM & BSM

Roles & Responsibilities of ECF Parties Broker Lead Lloyd’s Underwriter XCS Agent of the (Re)Insured Collate and present claims data / information to Insurers - will include first and subsequent claim advices Collection of claim monies on behalf of (Re)Insured Review claims information provided by broker and other parties Represent the interest of Leading Lloyd’s Syndicate in any claims handling decisions, including coverage, recovery, litigation etc Review claims information provided by broker and other parties Represent the interest of Following Lloyd’s Syndicates (if CAF or Peer Review, will include claims handling decisions including coverage, recovery, litigation) Advise claim details to Lloyd’s Syndicates and process claims, recoveries and/or fees via Lloyd’s Market claims system Role Create / update claims data in CLASS @ Lloyd’s in a timely fashion. Will include:- Claims Refunds Fees, if included in indemnity amount (optional for brokers if not)) Upload correct supporting claims documentation onto Market Repository. Will include (but not limited to):- Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) Cover Note / Certificate / Declaration, where applicable Preliminary and subsequent loss details Expert reports Release Form / Proof of Loss Correspondence from (Re)Insured Supporting claim documents (e.g. bordereau, shipping documents, invoices receipts, etc) Convey instructions to experts on behalf of Insurers Calculate claim adjustments, including application of any applicable deductibles, orders, reinstatements - where applicable etc Arrange payment of claim funds to (Re)Insured on behalf of Lloyd’s syndicates Arrange payment of expert’s fees on behalf of Lloyd’s syndicates, if included in indemnity amount (or broker elects to collect fees if not) Confirm broker has uploaded correct claim documents and review same. Will include:- Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) Cover Note / Certificate / Declaration, where applicable Expert reports, invoices, receipts, shipping documents etc Check coverage details and confirm:- Certificate / Insured / interest / declaration attaches to policy and sum insured DOL / DCM falls within policy / certificate period Claim falls within available policy / certificate limits Applicable coverage type Deductible / excess / franchise correctly applied Loss location Review and assess claim documentation. Will include (but not limited to):- Identity of Insured / Coverholder / Cedant / Reinsured Preliminary and subsequent loss details Expert reports Release Form / Proof of Loss Form etc Review broker loaded financials Update Lead Underwriter comments on CLASS @ Lloyd’s entry Route claim to other agreement parties, as necessary Instruct and manage experts in conjunction with XCS Manage disputes with insured in conjunction with XCS. Will include:- Arbitration hearings or court cases Depositions etc Manage “Direct Report” claims files and agree any applicable “Direct Settlements” Determine and execute claims handling strategy in conjunction with XCS Confirm broker has uploaded correct claim documents and review same. Will include:- Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) Cover Note / Certificate / Declaration, where applicable Expert reports, invoices, receipts, shipping documents etc Check coverage details and confirm:- Certificate / Insured / interest / declaration attaches to policy and sum insured DOL / DCM falls within policy / certificate period Claim falls within available policy / certificate limits Applicable coverage type Deductible / excess / franchise correctly applied Loss location Review and assess claim documentation. Will include (but not limited to):- Identity of Insured / Coverholder / Cedant / Reinsured Preliminary and subsequent loss details Expert reports Release Form / Proof of Loss Form etc Review broker loaded financials Update XCS comments on CLASS @ Lloyd’s entry Route claim to other agreement parties, as necessary Instruct and manage experts Manage disputes with insured in conjunction with Leader. Will include:- Arbitration hearings or court cases Depositions etc Manage “Direct Report” claims files and agree and process any applicable “Direct Settlements” Determine and execute claims handling strategy in conjunction with Leader Provide Technical Processing or CAF service, as required Process corrections Determine and create XCS CLASS entries in line with:- Regulatory requirements CAT code splits NAIC splits Trust Fund State Code requirements Create XCS CLASS entries and send SCM / USMs to Syndicates Offer an Enhanced Claims Review service Pursue recoveries, where appropriate Responsibilities

Lead Lloyd’s Underwriter Getting the data right first time System Validation Broker Lead Lloyd’s Underwriter XCS XCS release XCS CLASS and send SCM / USM to market Class @ Lloyds Class @ Lloyds Class @ Lloyds Broker loads C@L Lead agrees C@L XCS agrees C@L Claims Data XCS CLASS SCM & USMs Mandatory Fields in C@L - 25 (Entered by Broker) UCR (includes Original Broker) TR (includes Payee Broker) Bureau LMP Indicator First Advice Indicator Advice to include Settlement - UMR - Broker Phone No. - Bureau Lead - Insured - Policy Period or Period Narrative - Slip Order 1 or Narrative - Loss Name - Loss Date From - Loss Details (Narrative) - Original Currency O/S amt or O/S Qualifier Order Settlement (if Settlement) - Settlement Currency (if Settlement) - Settlement Amount (if Settlement) - Original Signing No. & Date - Settlement Exchange Rate Editable & Updateable Fields in C@L - 5 (Data originally entered by Broker) Risk Code CAT Code PCS Code Further Agreement Parties Cause Codes (not used at the moment) Editable & Updateable Fields in C@L - 5 (Data originally entered by Broker) Risk Code CAT Code PCS Code Further Agreement Parties Cause Codes (not used at the moment) Non-Editable Fields in XCS CLASS - 17 (Data originally entered by Broker) - UCR - TR - Advice / Settlement - UMR - Syndicates on Risk (including Bureau Lead) - Slip Order - Original Currency - O/S Amount or O/S Qualifier - Settlement Currency - Settlement Amount - Original Broker (Calculated from UCR) - Payee Broker No. & Pseud (Calculated from TR) - Original Signing No. & Date - Settlement Exchange Rate Broker Claim Reference 1 & 2 Interest VAT amount Editable Fields in XCS CLASS – 16 (Data originally entered by Broker) - Broker Phone No. - Insured - Pol / Cert Period From & To - Loss Name - Date of Loss From & To - Loss Details (Narrative) - Reinsured - Original Insured Perils SI Limits SI Currency Excess Loss Location Vessel / Aircraft Lawyer Adjuster NB. Editing these fields will cause discrepancies between C@L and SCM/USMs sent to Syndicates Optional Fields in C@L - 42 (Entered by Broker) Broker Claim Reference 1 & 2 Reinsured Interest Perils Location / Voyage SI Limits Excess Loss Location Vessel / Aircraft Lawyer Adjuster Previously Paid VAT amount etc Additional Fields in XCS CLASS - 72 (Entered by XCS on XCS CLASS) - Presentation Date - Charge Type - Peer Review Indicator - Market Code etc Getting the data right first time

Contractual Framework – Mandatory Rules Licence to use and access to Documents Unintentional disclosure of Documents and Privilege True, fair and complete copies Use of ECF and A&S Response Buttons/Response Codes (for Lloyd’s only) Recording Transactions (ECF and A&S) Authentication of Users Governance Compliance Law and Jurisdiction

74 Lloyd’s Early Implementers Brokers Carriers Karl Ross Joe Hayward Stephen Matthews Ninette Fernandes David Price Heather Loane Tabir Shah Niall Wapshott Dave Warren Claire Musson Sean Finneran Matt Shelton Matthew Nicholas Georgie Burrows Tim Lovick Darren Moles Barbara Stuchberry Mark Harrison Rob Casserly Simon Davies Bernard Levy Kennedy Paryag Matthew Taylor Nick Miller Robin Morgan Joy Lowry Darren McEwan Dean Gardiner John Merrett Clive Campbell Rob Pearce Shelley McCormack

Lessons Learnt To assist the efficient management of your ECF transactions and reduce rejections, the following points are important: Check the risk/class of business is applicable for ECF Check the data listed in the ‘Validation Checks’ (see previous page) is included in the presentation Ensure the correct signing number is presented Check a signed Slip is loaded on to the Repository (along with other relevant policy documentation such as schedules, breakdowns, APs, Endorsements etc.) Correct Slip order

Lessons Learnt are completed or left blank) Ensure both the currency of limits and SI/limit amounts are entered (e.g. either both fields are completed or left blank) If a bordereau presentation includes a newly added US tax state or a Canadian province which requires a payment, this needs to be loaded as an advice prior to the settlement Check the Settlement currency is the same as the first and subsequent advice When a first advice with settlement is presented, the advise must be loaded on the first transaction then the settlement on the second transaction

Practical Help XIS are running a number of familiarisation sessions across September 06. (Contact Graham Sheppard) XCS are planning a number of face-face procedural workshops and demonstrations with Brokers commencing September 06.

Tim Lovick Date: 4 September 2006 System Overview Tim Lovick Date: 4 September 2006

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Xchanging ECF Project Teams – Key Contacts Graham Sheppard Email: Graham.Shepard@ins-sure.com Tel: 07917 423 308 XIS Project Team Stephen Matthews Email: Stephen.Matthews@xchanging.com Mob : 07789 273760 Kennedy Paryag Email: Kennedy.Paryag@xchanging.com Tel: 020 7780 5353 Mob: 07748 761 977 XCS Project Team Tabir Shah Email: Tabir.Shah@xchanging.com Tel: 020 7780 5308 Mob: 07919 564 214

Questions

Questions & Close Trevor Maddison Marsh and BEFIT

How Do I Get Involved – What Do I Need? To submit claims electronically you must have: Class @ Lloyds access either online or batch The ability to load scanned claims documents to the Xchanging hosted market repository either via DRI auto load or direct load Both Class and the ability to put documents in the repository are pre requisites to eclaims trading with underwriters

Key Contacts – Getting Started Market Reform Programme Office Ben Sayles: ben.sayles@lloyds.com Claire Bulman: claire.bulman@lloyds.com Xchanging Geoff Kennard: geoff.kennard@xchanging.com Graham Sheppard: graham.sheppard@xchanging.com LMBC Matthew Bateson: matthew.bateson@lmbc.co.uk

www.marketreform.co.uk Market Reform Website The website for all market reform matters is: www.marketreform.co.uk Please pay a visit