1. TOM London Market Target Operating Model (TOM) Market Consultation Briefing Pack November 2015 Version 2.3

2. 3 10 13 16 17 Agenda  Your opportunity to contribute  Where do I find consultation materials and what are they?  How can you help?  Q&A  Appendix: Initiative Overviews 1 2 3 Page 2 4 5

3. Your opportunity to contribute 3

4. 4 ‘London Matters’ highlighted the threat to London's position as the undisputed global centre for commercial (re)insurance The London Market is the largest global centre for commercial and specialty risk and is in a great position of strength Ongoing investment in making the Market more accessible and efficient Financial strength ratings reaffirmed, outlook revised to positive Continued focus on our collective vision and goals Increasing retention of risk in high growth developing markets Higher acquisition costs make London a more expensive market to deal with than its competitors An inflexible business servicing model that is inefficient and slow to change, reducing London’s competitiveness These challenges are recognised by the Market and there is acceptance of the need to change However, the world is changing which is challenging London’s position

5. The market has spent the last six months developing a model to deliver one touch data capture and enhanced central services, and the initiatives required to deliver it Design Principle One touch data capture Enhanced central services Current Operating Model Inefficient and paper based Inflexible and complicated Fragmented Target Operating Model Highly effective and accessible Improved data re-use Economies of scale for common activities 5

6. This is your opportunity to contribute to the London Market Modernisation agenda BUT, WE STILL WANT MORE! We recognise that there are a huge number of people employed in the Market that we have not yet engaged with. We now want you to help shape our future and challenge TOM to be as innovative and ambitious as possible. Have your say and get involved by contributing your feedback, challenges and ideas regarding either: The Overall TOM Specific Initiatives AND/OR We have had 1-on-1 meetings with 31 Market participants covering 79% of GWP; engaged with 131 stakeholders across 75 organisations through 37 meetings; and held community workshops with 194 participants TOM engagement to date 6

7. Why are we having a Consultation? 7 You have said…… so we have responded with two Consultation activities “TOM must take the time to engage more widely and leverage the Market’s extensive experience and knowledge whilst ensuring that the Market understands and supports the programme” “The TOM solutions need to be innovative and built for the future, not just to solve current problems” “TOM needs to be able to articulate clearly what the TOM end-to-end solution is so that it is tangible and has practical meaning for market participants” Market Vendor Gather your ideas. Should the model be aiming higher? Does it miss anything? Challenge the model and make us think again Influence the current structure of the requirements and prioritise any activity Understand Vendors’ perspectives on the proposed TOM and initiatives Incorporate innovations into the TOM Ensure the TOM has been robustly challenged from outside

8. We would appreciate your views on… 8 …as well as any other feedback regarding the TOM or specific initiatives Is TOM addressing the right problems? Are the initiatives we have identified the right ones and are they addressing the problems correctly? Are there any missing? What is your view on the key priorities for the TOM and why? Does the 2016 scheduling look achievable and are we moving at the right speed? Do you understand the impact of TOM on your organisation?

9. How will we use your inputs? Augment Our TOM Programme Incubate Innovation Review where the TOM can be improved and evolved Increase the specificity of our solutions and requirements Challenge whether the scope of initiatives is achievable or overcautious Challenge prioritisation of initiatives to balance risk with benefits realisation Generate, develop and socialise new ideas that could drive further market modernisation Identify potential market disruptors and explore expected impact of successful implementation Design prototypes and seek stakeholder and/or customer feedback 9

10. Where do I find consultation materials and what are they? 10

11. 11 We have created a dedicated TOM website that will provide detailed information on the TOM, the initiatives and scheduling www.isupporttom.london TOM overview Detailed initiative information TOM architecture Key initiative questions TOM scheduling Share your thoughts

12. We want your ideas and comments across the TOM initiatives TOM Key messages Fifteen TOM initiatives  Fifteen TOM initiatives were initially identified to deliver the enhanced central services and realise the benefits of straight through processing 1 :  In-flight initiatives (CSRP PbS, PPL) are currently in delivery but open for consultation and we have provided detailed information on these  Other in-flight initiatives (IMR, MAT, ECF) are also in delivery and near completion  Prioritised new initiatives (Data Integration, Settlement, DA, Claims, Complaints, Local Shared Services) are the most advanced and on our plan to take forward in 2016 – we have provided detailed information on these  Other new initiatives (Customer Portal, Reporting & Analytics) are less advanced and we will take ideas on these forward once we have the 2016 initiatives well under way  Governance & Delivery covers the TOM programme but is not a specific initiative required to deliver the TOM CSRP 2 PbS IMR 4 Re-Platform Settlement Delegated Authority PPL 3 Claims – Core Services & systems Complaints management New MAT 5 environment Data Integration Electronic Claims File enhancement Governance & Delivery Local Shared Services TOM initiatives Reporting & Analytics Additional CSRP Customer Portal 12 6 4 7 8 3 910 13 5 12 1415 11 Detailed information provided Key: 12 Other 1 Not every initiative impacts all stakeholders 2 CSRP = Central Services Refresh Programme 3 PPL = Placing Platform Limited 4 IMR = Insurers’ Market Repository 5 MAT = Market Acceptance Testing

13. How can you help? 13 TOM

14. We are seeking innovative ideas and want to challenge our preconceptions 14 Engaging through www.isupportTOM.London Ideas and feedback on TOM and/or specific initiatives can be submitted using the forms provided on the website. We are open to disruptive and innovative ideas that challenge our current preconceptions and approach. Further information on the program and initiatives can also be found on the website. Organising TOM events Organising Town Hall Q&A Sessions or Breakfast Sessions, where we will further expand on TOM, what we are trying to achieve and be available to discuss your questions. 1 2 Engaging on social media Questions and/or feedback can be sent via email or twitter, or come speak to us at the International Desk in the Lloyd’s Underwriting room. 3 @LondonLmg TOM@ISupportTOM. London London Market Group If you have any comments or feedback, please engage with us through one of the channels above or through your respective associations.

15. The period of open Consultation will last until the end of the year and will drive input, ideas and engagement from all areas of the Market NovemberDecember 06/11 Market Launches 18/12 Ideas for further development On-going Market Consultation 18/12 Market feedback close Evaluation and working sessions 05/11 Vendor Launches Vendor Town Hall Q&A Sessions On-going Vendor Consultation 7/12 Vendor ideas submission 2016 Evolve and Deliver TOM Drive innovation Continue Market and Vendor Engagement Crowdsourcing activities on www.isupportTOM.London Launch of Consultation Generation of ideas, exchange of opinions Collation of ideas and feedback We will continue Market engagement and further target operating model development next year 20/1104/1207/12 If you cannot access any of the information, email TOM and a soft copy will be provided 10/11 15 24/1127/1120/11 Market Town Hall Q&A Sessions 09/12

16. Q&A 16 TOM

17. Appendix: Initiative Overviews 17 TOM

18. Central Service Refresh Programme – Initiative summary What is the CSRP (PbS) initiative? Central Service Refresh Programme (PbS) focuses on modernising the current central services provided by a third party supplier for accounting and claims processing to remove London specific, paper-based inputs and automate wherever possible. Key Questions What (if any) is the primary driver to move away from the mandatory nature of Bureau Central Accounting? In your opinion, how should we move to EBOT/ECOT and safely withdraw EDI messaging (i.e. USM/SCM etc.)? Do you have an expectation that EBOT/ECOT messages will be adapted for usage by Delegated Authority? Are there any highly beneficial ‘quick wins’ that you think can be accelerated E.g. removing the re-keying of the underwriter reference within the Bureau process? 18 CSRP PbS In-scope components Addresses post-bind technical accounting and reporting back office processes Establishes new ACORD EBOT/ECOT Submission Channel and Carrier query management, thereby removing the use of LPANs Remove Signing Number and Date (Londonism) from Claims Submission Delivers Market utility Structured Data Capture Service to support capture and processing of information in ‘Digital’ format Establishes new efficient automated business processes for accounting splits and reporting Contributes to making LM to do business with (by using global processes) Reduce broker administration substantially Improved data quality and richness via global standard (ACORD) Reduced cycle times and complexity through simplification and automation Fewer delays to premium and claims settlement Benefits

19. Placing Platform Limited – Initiative summary What is the PPL initiative? Electronic placing platform which allows brokers and carriers to quote, negotiate and bind business, replacing traditional channels such as paper and e-mail, enabling remote placing globally but also supporting face-to-face placing of (re)insurance business. In-scope components Placing quotes and binding Document comparison Improves access to London that may have previously been restricted due to prohibitive processing costs Structured and visible workflow processes will allow firms to measure, manage and potentially increase productivity Removes duplicated effort (re-keying data), reducing processing time and errors when fully integrated Benefits Key Questions In your opinion, how can we help ensure adoption of PPL in the Market? What would you deem as a priority to rollout PPL? And why? 19

20. What is the Data Integration initiative? Creates a common language for Market Participants to share information more easily, to achieve a higher quality standard and promote central service adoption in the Market. This initiative will provide the overall framework, governance, standards and guidance to enable different systems and processes to talk to each other. In-scope components Data Integration Framework – Defines principles and methods for data exchange Message Standards – Enhancement of messaging standards to define the format of each message exchanged Governance and Processes – Capability to provide control over data creation, exchange and storage Master Data Management (MDM) – Provide a central view of the mastered data across the Market Allows faster setup and execution of data exchange Improves consistency of data management across systems Reduces re-keying of information through better data governance Improves confidence in data used within the Market Provides better data on which to perform analysis Benefits Key Questions Data Integration – Initiative summary How could we achieve consistency in selected reference data across all parties in the Market? Examples of things that could be made consistent across the Market and the data relating to them are: brokers, coverholders, risk classifications, currencies, countries What measures could be taken to make adoption of new ACORD standards easier and faster (for all inter-party data exchange)? What is the best way of enabling detailed and timely reporting (e.g. daily) that supports operations across Lloyd’s and the Market? What data services would benefit your organisation and why? How do we measure and demonstrate the impact of bad data quality? What approach to governing data across the Market would work best and why? Examples of governing data could include setting its level of security and importance, agreeing definitions for data items and managing the quality of data in the Market 20

21. Settlement – Initiative summary What is the Settlement initiative? The settlement initiative aims to improve London Market settlements, potentially replacing numerous existing settlement systems and processes. Some of these existing solutions are running on legacy mainframe technology which incurs higher development costs and restricts the ability to adapt processes to changing Market needs. In-scope components Single Settlement Process – Delivered through alignment and consolidation of existing processes or replacement with an entirely new process Customer Portal – For authorised participants to view and/or transact their settlements Settlement Technology Platform – Refreshed or updated Provides a standardised process and managing, that will drive operational efficiencies and make reconciliation simpler Reduces bank charges for market participants currently using alternative settlement services and processes A larger customer base to share development and operational costs Benefits Key Questions How do you think settlement process could be made faster? If feasible and desirable, how can we achieve consistency of processing central settlements across all areas of the Market (Lloyd’s, Bureau, Non-Bureau)? What changes could be implemented to make settlements a differentiator for the London Market? How do you think Settlements can be changed to enhance the customer (broker, insurers, claimant, policyholder) experience? What are the biggest challenges for companies regarding the settlement process e.g. internal reconciliations, speed of payment, etc.? 21

22. Delegated Authority – Initiative summary What is the Delegated Authority initiative? The Delegated Authority initiative will address existing legacy systems that are limited by poor integration of data between systems and limited functionality. Processes will also be centralised and streamlined to eliminate inefficiencies associated with Delegated Authority business services. In-scope components Coverholder Approval – Enable a ‘right first-time’ collection of supporting coverholder approval information Coverholder Audits, Coverholder Controls and Compliance Services – Centralisation of coordination and performance Binding Authority Registration – System to automatically generate, validate and store contracts (including multi-year) Coverholder Data Publishing and Processing Provide a more efficient coverholder approval process Reduce duplication of audits and interruptions to coverholders Reduce time spent by brokers and insurers on manual data capture and cleansing Eliminate need for manual Bordereaux – replaced with automated data sharing at a far more granular level Benefits Key Questions How can we reduce the duplication in the Market on due diligence and compliance and regulation, what do you think could fix that? What is your opinion on outsourcing your compliance for Coverholders? What advantages do you think there is in a local onboarding of Coverholders for Lloyd’s which speeds up the application process? What other changes could be implemented to make it easier to do delegated authority business within the London Market? 22

23. Claims – Initiative summary What is Claims Core Services initiative? Aims to enhance the customer experience, service and accessibility to the London Market, using technology as an enabler to replace legacy systems and processes with modern tool, data structures and central shared services. These elected shared services comprise non-competitive activities common across the London Market that would benefit from central governance, purchasing and management for the shared benefit of the London Market. In-scope components Claims Management Services and Processing – Deliver a modern, global standard claims system supporting improved messaging Claims Reporting Suite – Performance measures for core claims processes Customer & Competitor Analysis – Market research to validate and inform claims modernisation Enhanced customer experience through transparency of service and simpler agreement processes Policyholders experience a faster claim cycle, primarily for small claims, by reducing manual carrier processes Rich and structured data for all Gaining an accurate understanding of customer needs and appetites, enabling improved customer retention Drive service improvements through claims benchmarks Benefits Key Questions Do you believe that London can create its own global brand for handling claims? If so, To what extent would that be realised by the whole market (Lloyd’s & Company) delegating claims handling to a central function? Which claims would that apply to? Where do individual risk carriers differentiate most from their competitors in handling claims and why? To what extent do you think that the Lloyd’s brand for claims handling should be clearly differentiated from the Company Market? What impact would a transition to a Market central claims handling have on your own operations and staff? 23

24. In-scope components Complies with regulation avoiding financial penalties Improved customer service Efficiency in dealing with complaints centrally Improved quality of complaint MI to improve operations and performance Protects London Market reputation by solving issues before they develop into serious complaints Benefits Complaints Management – Initiative summary What is the Complaints Management initiative? The initiative aims to improve the customer experience and protect the London Market reputation by delivering systems and processes for complaints handling. This initiative responds to FCA policy statements (15/19) that outlined new rules on complaints handling, Lloyd’s minimum requirements and international regulation. Key Questions What are the biggest challenges facing your organisation to become compliant with new FCA regulation (people, processes, technology)? In your view, what are the differences between the Lloyd’s & Company market complaints handling process? A phased rollout is proposed; what countries would be your priority for the complaints management initiative? In your view what is the anticipated increase in the volume on reportable complaints as a result of the regulatory changes? Complaints Registration – A system to comply with impending regulation, improve efficiency and support the swift resolution Data & Document repository- To establish the ‘single source of truth’ of market complaints with; document repository and system interfaces with other supporting systems Complaints Handling – Embed processes and standards to enable continuous market improvement for complaints handling Education and Training – Develop and rollout to support complaints operational standards 24

25. Local Shared Service Centre – Initiative summary What is the Local Shared Services initiative? The Local Shared Service Centre initiative aims to create locally enabled post-bind Shared Service Centres where a ‘menu’ of unified, value for money and scalable back-office services can be offered to customers operating in territories outside the UK. This should make it easier for London Market carriers to operate in emerging markets. In-scope components Data Capture – Provide structured risk data capture to enable the below post-bind services Document Management and Production – Validate and provide assurance of documents including policy issuance in local language, Facilitate contract checking Premium Handling – Includes premium matching, IPT, credit controls, net country and central settlement, premium accounting and debit notes Claims Payment – Enable direct payment in local currency and net settlement, receipt of notification Reporting – Facilitate tax & regulatory reporting, Month end reports, management information & Reporting Establishing post-bind shared services centres is designed to make it more attractive for Lloyd’s and Company Market carriers to enter a market, saving on set-up and operating costs and hence provide economies of scale in terms of administering any local operations Brokers will be provided with a more seamless process, with the ability to interact with Lloyd’s through a single standardised interface. LSSCs will deliver more efficient post-bind services (reducing frictional costs & improving data quality), currently provided by local carriers, thereby, offering greater capacity within local markets Benefits Key Questions What locations would you deem as a priority to setup a LSSC hub? And why? In your view, what are the principal challenges if these services are mandated? Of the services listed which would you see as a minimum? E.g. data capture What data concerns and SLA concerns would you have? And how would you suggest we mitigate them? Or What assurances would you need? 25