Aon Risk Solutions | Aon Global Risk Consulting | Claims Preparation, Advocacy and Valuations 0 P I C G Conference | The Value of Claims Preparation in NAT CAT Situations May 2015

Insured’s NAT CAT Issues | General In NAT CAT situations Business Interruption losses tend to be the area where most delays and disputes occur:  Historically PDBI policies were not structured in a way in which addressed all aspects of a NAT CAT loss i.e. multiple suppliers damaged in a single insured event  Distinct of lack of the Insureds management time  Lack of policy understanding  Disconnection between the Insureds loss calculations and the policy (without Claim Preparer)  Trends are recognised too late (post loss)  Lack interdependency clarity / Inaccurate or out dated information (pre loss)  Lack of understanding of the inherent risks in global supply chain (pre loss) Aon Risk Solutions Proprietary & Confidential

2 Insured’s NAT CAT Issues | CBI Issues o Supply chains are often multi-tiered with different sub-limits o Proof of loss difficulties o Availability of stock o Unique supply / available alternatives o Alternative suppliers not unavailable o Components are unique o Components may be used in a number of different products o One product may be interrupted due to supply shortage from a number of components o Mitigation / lead time o Remodelling of end-product o Alternative suppliers need testing / certification o Wider Area Damage o Difficult to identify suppliers which are affected o Liaise with commodity buyer o How much was supply of each component affected? o How have the suppliers been affected? o What is the expected production outage of the supplier? o Increased costs to mitigate outage o Loss calculation? Production v Sales

How to Obtain Policy Response Assurance  Increased understanding by way of NAT CAT risk quantification: –Sophisticated tools are available to quantify and manage the risks facing Insureds businesses. Allowing Insureds to quantify potential losses and develop more effective insurance programmes.  Informed risk management and transfer decisions, identifying heavily exposed parts of the portfolio  Accuracy of information provided  Pre-loss BI reviews (Declared values, Indemnity periods, extensions, policy wording and structure, policy limits) Aon Risk Solutions Proprietary & Confidential

Aon Risk Solutions | Aon Global Risk Consulting | Claims Consulting and Risk Accounting 4 The Benefits of Conducting Pre-Loss NAT CAT Reviews  Allowing the Insured to understand their risk exposures so they can transfer risk to insurers where desired  Eliminating the potential for under insurance  Providing the client with the reassurance that the policy in place will respond to a loss in the desired manner and that there are no unintentionally uninsured exposures due to incorrect reported values and limits  Eliminating the potential of over insurance resulting in unnecessarily excessive premiums charges  Providing brokers and clients with a tool to better negotiate renewal terms with the market  In the event of a claim occurring, providing a benchmark for the claim methodology that will ensure clients receive full indemnity and an expedient settlement

Aon Risk Solutions | Aon Global Risk Consulting | Claims Consulting and Risk Accounting 5 Who are Claims Preparers?  Forensic Accountants  Loss Adjusters  Experienced claims advocates All who were previously engaged by Insurance companies and tend to have a speciality in Business Interruption and general property insurance

Aon Risk Solutions | Aon Global Risk Consulting | Claims Consulting and Risk Accounting 6 The Benefits of Claims Preparation & Management Aon Risk Solutions | Aon Global Risk Consulting | Claims Consulting and Risk Accounting Getting the Insured on the Road to Recovery… Often when a loss occurs the client does not know where to begin The initial decisions made with regard to mitigation and reinstatement can be crucial to both the short and long term recovery of the affected business as well as how successful an insurance claim can be We can provide practical claims advice; be the main point of contact with insurers and their representatives; and prepare all claims submissions including the often misunderstood Business Interruption loss calculation

Catastrophe Teams/ /External Partnership/ Loss Consultants Local Facility Operations Finance/Risk Management Dept “One Voice” Insurers/ Third Parties Vendors Restoration Contractor Building Contractor Architect/Engineering Roofing Consultant Industrial Hygienist The Benefits of Claims Preparation & Management Aon Risk Solutions Proprietary & Confidential

Claims Preparation | Benefits to the Insured  Receive timely and expert guidance through the claims-related issues; this can often be the difference between the policyholder’s successful and unsuccessful recovery after an incident.  Ensure claim is maximised whilst being properly prepared and presented in accordance with policy cover.  Provides expert funded resource to prepare the claim whilst key employees focus on a recovery of the business.  Creates a ‘level playing field’ to counter balance the array of advisers employed by the insurer to handle the large and complex claims.  A claims preparer knows the process and requirements of the Insurer, particularly in relation to interim payments and how to speed up settlement. Timely payments at a time of disruption are crucial to maintain cash flow. Aon Risk Solutions Proprietary & Confidential

Claims Preparation | Benefits to the Insurer  Expectations are managed from the outset.  Early and informed loss estimates (Orders of Magnitude) produced by claims preparers assist in setting up adequate reserves.  A well prepared claim can accelerate settlement resulting in a reduction in the life cycle of the claim and associated costs.  Policyholders without resource can be completely focused on recovering the business leading to a drawn out and frustrating claim process.  Good and prompt professional advice can lead to a shorter period of interruption and a reduced exposure. It can also enhance the ‘claims experience’ received by the policyholder and lead to greater satisfaction and customer retention.  Encouraging a policyholder to access expert advice fully supports the ethos of ‘treating customers fairly’.  Additional support to avoid misunderstandings that may lead to dispute. Aon Risk Solutions Proprietary & Confidential

Aon Risk Solutions | Aon Global Risk Consulting | Claims Consulting and Risk Accounting 10 Questions ?