Electronic Claims Electronic Claim File Briefing Development and Implementation update 13 th September 2006 Follow up to last update on 21 st March2006

Electronic Claims File Electronic Claims Page 2 Agenda Introduction and WelcomeIan Mallery Status ReviewIan Mallery Testing Approach & OutcomeAdam Stafford Early ImplementationsSimon Collins A Broker’s ViewTrevor Maddison XCS & Electronic ClaimsStephen Matthews Project Funding & GovernanceCarl Phillips Questions and CloseCarl Phillips

Electronic Claims File Electronic Claims Page 3 Introduction and Welcome Ian Mallery Marlborough and ECPG

Electronic Claims File Electronic Claims Page 4 Status Review Ian Mallery Marlborough & ECPG

Electronic Claims File Electronic Claims Page 5 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) –No change to SCM, USM or LIMCLM –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 / Leader Reserves

Electronic Claims File Electronic Claims Page 6

Electronic Claims File Electronic Claims Page 7 Screen shot – Transaction Summary Screen

Electronic Claims File Electronic Claims Page 8 Systems Processes & Procedures Systems Processes and Procedures –High-level guide –NOT a systems user manual or adjusting manual –First time of publishing for the market Workshops convened to review generic process and class of business variations –Confirmed generic process –Confirmed little variation by class of business –A key benefit was to identify the operational issues

Electronic Claims File Electronic Claims Page 9 Scope Business or Claim Types that ECF has Never Been Required to Support: –Claims on unsigned risks –Claims Payable Abroad –General Average –Letters of Credit, loss reserves and Outstanding Cash Advance (OCAs) –Proportional treaties –Scheme Canada –Bulk Settlements –Direct Livestock

Electronic Claims File Electronic Claims Page 10 Scope Business or Claim Types excluded from the current implementation of ECF: –Delegated Lead to XCS (other than 100% Delegation, which is in scope) –Binding Authorities, Cover Collections and Other Bordereaux Claims –Political risks –Aviation verticals –Certain Multiple OSND claims –Third Party Access to ECF –Legacy paper claims files However, solutions in progress

Electronic Claims File Electronic Claims Page 11 Binders & ECF Binder characteristics: –Losses within Delegated Authority –say £25k, reported via periodic bordereau –Losses above DA but below Market Reporting Threshold (£100,000) –require separate file but accounted via bordereau –Individual losses above DA & Market Threshold –require individual file & financials cross referenced with the bordereau

Electronic Claims File Electronic Claims Page 12 The Repository + CLASS model

Electronic Claims File Electronic Claims Page 13 The Repository + CLASS model

Electronic Claims File Electronic Claims Page 14 Binders & ECF However, certain relationships are already implementing binders on ECF This may produce a transferable model

Electronic Claims File Electronic Claims Page 15 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 –24/7 access, worldwide –Business continuity

Electronic Claims File Electronic Claims Page 16 ECF 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 –Legacy claims –Issues recorded

Electronic Claims File Electronic Claims Page 17 MAT Issues & Sign off Response times- Ongoing monitoring Conflicts – Change Request raised Deny Button – Future discussion at LMCG All issues logged Sought unanimous Managing Agent approval Known issues relayed to SDG Achieved ECF sign-off

Electronic Claims File Electronic Claims Page 18 Next Steps November Release – Patches for faults raised in MAT February 2007 – Delivery of Key Change Requests Review of all issues recorded during design ECPG will continue until March 2007 Contractual Framework

Electronic Claims File Electronic Claims Page 19 Market Acceptance Testing Approach and Outcome Adam Stafford MRPO

Electronic Claims File Electronic Claims Page 20 Timetable Market involvement in approach through workshops Q ECPG agreement to MAT Plan, Strategy and Comms Plan March 2006 Scripting, scheduling detailed planning April 2006 Interactive Testing 15 th May – 31 st July 2006 DRI Testing 1 st August – 1 st September 2006 Disaster Recovery Tests 23 rd – 25 th August 2006

Electronic Claims File Electronic Claims Page 21 Testing Approach – Brief Overview Identified a matrix of possible routes a claim can take (around 500) Resulted in 67 scripts –After removal of duplicate and invalid routes Each script extended to include Variations and Error Conditions Each script tested by a different combination of Managing Agent and Broker (with XCS) Tested End to End claims process from first advice to settlement with Brokers, Managing Agents, Followers and XCS Ensured consistency of Systems Process and Procedures with operation of the System.

Electronic Claims File Electronic Claims Page 22 Results 66 Scripts Completed out of 67 Tested –One script was only 50% proven, with issues arising around conflict notification. 262 Issues Raised; 243 Resolved –No open ‘Showstoppers’ remain, and all known issues will be resolved by February with some being fixed in November Stability – during MAT some stability issues arose, these were fixed in early August Performance – Contractual Requirements have largely been met but some Managing Agents have experienced slow responses. LMA SDG took decision to go live based on positive presentation from ECPG.

Electronic Claims File Electronic Claims Page 23 Thanks to all Participants in MAT: Managing Agents – Ace, Amlin, Beazley, Danish Re, Faraday, Heritage, Hiscox, Limit, Markel, Marlborough, St Paul, Novae (SVB) & Wellington. Brokers –Benfield, Guy Carpenter, Marsh, Miller & Willis XCS

Electronic Claims File Electronic Claims Page 24 Early Implementations Simon Collins MRPO

Electronic Claims File Electronic Claims Page 25 Early Implementations Implementation by Broker-driven trading partnerships –by classes of business and risks –with participating underwriters and XCS –MRPO monitoring progress –nearly 3 years –concurrent paper file Using existing CLASS and repository

Electronic Claims File Electronic Claims Page 26 Early Implementations Benefits to Implementers –early experience of electronic work –assess impact on internal broker and carrier procedures and processes –input to system development through ECPG and BEFIT Benefits to the project –identify problems and issues early –input to system and business process development

Electronic Claims File Electronic Claims Page 27 Early Implementations Current Volumes –9 Brokers, 28 Managing Agents –10 Classes of business –Over 1000 First Advices –Over 1600 claims movements Ramp Up –Not “big bang” - managed uptake –Change in culture and processes –Shift from Broker-driven alert to an electronic advice –Build relationships to aid comfort –IUA Pilot

Electronic Claims File Electronic Claims Page 28 How to get started 1. Read and understood SP&P 2. Who are you going to partner with initially? What classes of business? 3. Signed up to Contractual Framework 4. Logons, connection, training – Xchanging 5. Integration Testing 6. Register all partnerships with MRPO 7. Business procedure training with the CII Start up procedures available on market reform website

Electronic Claims File Electronic Claims Page 29 A Broker’s View Trevor Maddison Marsh and BEFIT

Electronic Claims File Electronic Claims Page 30 ECF - A Broker’s View Congratulations, the software is live and we are ready to trade. Delivery in less than two years A major slice of market reform delivered through partnerships proving brokers and carriers can work together to deliver real change. The System Process & Procedure document a perfect example of collaboration. One remaining broker issue to resolve concerning the Repository rules, end of September target to complete. 5 brokers publicly committed to trading live, paperless claims. - Aon, Benfield, Guy Carp, Marsh, Cooper Gay - Approx 40pct* of market share new claims * Source: Lloyd’s Capital & Broker Relationships

Electronic Claims File Electronic Claims Page 31 ECF - A Broker’s View IUA Companies now actively participating in pilots. It’s important the entire subscription market commits to ECF to be a true London market success. The committed brokers need to work closely with their major markets to ensure there is a robust transition process in place. The first 6 months are critical to achieving successful trading and proving a point to all those doubters out there. The LMBC/BEFIT need to ensure broker involvement is rapid. Underwriters may need to provide some gentle persuasion and encourage take up. Lets make sure we don’t make ECF prohibitive via cost for the smaller brokers or by making the process over complicated that paper is the only answer. There will be issues, lets work through these and look forward to providing a first class, paperless claims trading environment which London can be proud of. New claims today, legacy tomorrow.

Electronic Claims File Electronic Claims Page 32 XCS and Electronic Claims Stephen Matthews XCS

Electronic Claims File Electronic Claims Page 33 XCS Involvement & Readiness Market has already invested £3.5million into development of ECF system XCS involved in first ECF early roll outs in April 2004 By August 2006, 74 early roll outs across multiple classes of business 1000 electronic claims processed XCS are signed up to Repository Rules

Electronic Claims File Electronic Claims Page 34 XCS Involvement & Readiness 35 XCS adjusters trained on ECF system All XCS adjusters to have at least basic ECF training by end of year Minimum of 2 ECF adjusters, with one “Expert User”, per class of business 2 out of 3 XCS adjusters currently have dual screen technology Dedicated project team of 10 people Working on solutions – multiple OSNDs, binders, etc.

Electronic Claims File Electronic Claims Page 35 ECF System: Transaction Summary

Electronic Claims File Electronic Claims Page 36 Transaction Summary (cont.)

Electronic Claims File Electronic Claims Page 37 Project Funding & Governance Carl Phillips Amlin & SDG

Electronic Claims File Electronic Claims Page 38 The Role of the SDG SDG reports to LMA Market Processes Committee (MPC) Responsible for delivery of CLASS at Lloyd’s / 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

Electronic Claims File Electronic Claims Page 39 Time and Budget Summary Substantial market testing and implementation tasks completed this year Completed software delivery to enable processing of electronic claims across the Lloyd’s market on time Will not deliver everything on day one - need on-going maintenance and review of Change Request log No change to agreed USM & SCM surcharges Early implementation partnerships growing Will change working practices from paper to electronic for many claims practitioners

Electronic Claims File Electronic Claims Page 40 Impact on Budget No changes to original funding arrangements 2006 surcharges: –34p USM & SCM for Repository running costs – reduction from 2005 –19p SCM for CLASS at Lloyd’s running costs –25p SCM to December 2006 for repository development –CLASS at Lloyd’s development (£597k) in three instalments Budget Forecast to the end of 2006 –Implementation, Infrastructure and Running costs£5,266,912 –Change Requests £ 365,000 –Total charges incurred£5,631,912 –Revenue from surcharges and other licence charges£6,143,941 –Surplus carried forward to 2007 for enhancements£ 512,029 –CLASS running costs waived for 2005 The project remains on budget

Electronic Claims File Electronic Claims Page 41 Future Operational electronic claims by end 2006 for brokers, Lloyd’s & IUA. Available today for Lloyd’s & brokers Roll out for processing new claims will continue into 2007 –Increasing pressure on any non participants This is just the “Base Camp” - foundation to: –Migrate to ACORD business messages for claims –Eliminate CLASS differences across the multiple systems –Enable third party access e.g. loss adjusters –Move existing claims from paper to electronic –Offer client tracking of claims

Electronic Claims File Electronic Claims Page 42 Questions & Close Carl Phillips Amlin