1. Control Framework A warm Welcome to the June market Breakfast Group

2. Control Framework Breakfast Group agenda 9:00Arrival, breakfast & networkingAll 9:15 WelcomeAli Dove 9:20Phase II project updateJaana Rouvari 9:40Bordereau management and Ness Macintosh Control Framework& Linda Stannard, Capita 10:00Lloyd’s Relationship ManagementSue Baker 10:15Q & AAll 10:30Celebrating success & CloseAli Dove

3. © Lloyd’s Control framework Phase II update by Jaana Rouvari 3 Control Framework

4. © Lloyd’s Market progress against milestones Control Framework Agree broker/coverholder communications & assess risks, identify controls and gaps 5. 7. Agree assurance to be shared with Lloyd’s 8. Formal sign off 6. Evidence remediation plan 1. Initial meeting with Lloyd’s & Project resources in place 2. Verify CH in phase II & risk ratings completed 3. Audit plan for high risk CH in place & project delivery timeline confirmed 4. Agreed plan/deliverables for up to end of 2014 Milestones100% completed Completed In progress Not started

5. © Lloyd’s Flexing the approach to suit the risk profile 5 Control Framework Xchanging Managing agent Coverholder systems Broker Auditor Data from start to end Raw information Validate

6. © Lloyd’s6 Control Framework Flexing the approach to suit the risk profile Last date of audit + 1)Full audit? 2)Light touch cut down scope? 3)Desk based review? What other ways you have flexed your approach? Discuss around your tables – 5 minutes Please leave us your feedback to share with others! Risk profile =

7. © Lloyd’s Managing Agents – What do you need to be thinking about? 7 Control Framework Talk to your brokers! The team at Lloyd’s is here to help you, we can: -Centrally share your risk ratings with your brokers -Introduce you to our control framework broker contacts

8. © Lloyd’s Brokers – What should you be thinking about 8 Control Framework Do you need to enrich data received from coverholders? If you need to manually enrich data, can you evidence the processes and controls you have in place? If you have automated systems/ controls, can you share how these work? If you have binders in multiple business units, can you evidence processes and controls for each division? Remember, coverholder ratings are based on tax and regulatory risk, they do NOT indicate a good vs. bad coverholder

9. © Lloyd’s Support available for Brokers 9 Control Framework Get a flavour of where to concentrate, talk to the Lloyd’s project team! Who should we be talking to? Make sure the Lloyd’s team has the right contact details for your company to streamline communications Find out from the Lloyd’s team the right people at managing agents to talk to Put yourself in the driving seat and be proactive! How to get started? – Some great examples of what your peers have done

10. © Lloyd’s New stuff 10 Control Framework Martin Baker – Stakeholder Manager New FAQ online regarding run off business New broker content coming online soon!

11. Control Framework Breakfast Bordereaux Management and the Control Framework Lessons Learnt – June 2014 Listen Create Deliver

12. A journey into the unknown – and using the lessons learnt to create a complete Binder solution Agenda: 1.Introduction 2.DVD 3.Objectives 4.Challenges / surprises / solutions 5.Action Plan / Results – to date… 6.Future 7.Analytics 8.Conclusions

13. Binder Management Services (Video clip) http://www.youtube.com/watch?v=caWxR2 fBrxQ&feature=youtu.be

14. Singapore Objectives ‘Provide a solution to capture and monitor schedules and bordereaux in Singapore so that credit control can be performed and reported on at the detailed schedule / declaration level’ Remembering that:  Items need to comply with control framework  Items need to be able to be reported to local regulators (MAS) and Lloyd’s  Reporting to Service Company / Managing Agent needs to be detailed enough for them to upload at a detailed level if required –or summarised for single cover level updates  Both premium and cash items need to be processed  Need to start with the history so that all credit control can be provided and analysis of cover performance can be complete Six months designing the processes and solution and checked fit for purpose

15. Solution: Needs people, process, system, controls, reporting  Skilled staff  Quality system, flexible and robust  Team focus on bordereau processing  Agreed processes and controls  Full visibility of items  Flexible to deal with different classes  Able to take on existing slip history  Easy and versatile reporting

16. Challenges / Surprises Challenge: Data Format, content and quality Brokers / cover holders have several Insurers with different data demands they have existing systems with restrictions so can’t quickly / easily change  Solution needs to have capability to receive and process different formats Communicate what data is required and why (+ tax and regulatory reporting) communicate what will reduce queries on processing / cash matching  Brokers advised that they are interested in reducing queries and rework  Communicate what is currently good quality as well as any issues Surprise: hard copies sent & non standard paper size – wide as the bordereaux!

17. Solution: Accept different formats and augment data provided  Easy mapping and re-mapping  Default data from the cover when sensible  Check against cover rules  Check amounts and values  Check original premium notified prior to subsequent AP / RP  Provide a service to scan / create bordereaux from paper schedules

18. Challenge: Concentrate on fields that affect Tax/Regulatory/Performance Reporting - Check on values provided to ensure not only valid but sensible for the business being written. Concentrate on changing details that make a difference – risk based approach to change Check what is reported is within the terms / as expected - Understand cover/ binder and ensure business written adheres to the rules Surprise: Singapore writes business globally – lots of tax codes to understand Challenges / Surprises

19. Solution: Needs to be able to identify issues / potential issues  C heck tax / locations  Use experience to query / confirm items in the bordereaux  Warnings and errors and queries all managed  Check tax values against Crystal  Auto check against cover / binder values  Include rules for maximum lines / limits

20. Challenge: errors - check slip when written, pre cash received  Check at written stage to identify issues with data presentation / quality - do not wait until end of month / Audit to correct poor practices Check on servicing some brokers appreciate regular contact to remind of due items not just chase on overdue  Pro active communications to share with coverholders / brokers what is expected at contract outset and then provide broker statements / account updates support as required Challenges / Surprises Surprise: many versions of the truth – multiple copies / versions / endorsements

21. Solution: Processes for operations and broker interaction  Diary items of due items (bordereaux due) or planned activity (issue reports)  Operational reports to identify large volumes / unusual items / missing items  Regular interaction email / call / face to face  Management for further items on a declaration: endorsements and additions  Broker statements  Account statements  Allow for variations on engagement  Contact from experienced staff

22. Action Plan -Provide consistency on approach / interaction and reports. -Implementation guide for moving others onto the solution. -Approach to guide new cover holders to meet control framework adherence. -Ongoing commitment to continue to improve data quantity and quality. -Ongoing commitment to provide feedback to market and clients on binder business. -Support move to data feeds to reduce data rekeying. Results – to date… -Early days, but receiving a positive response to reducing queries and to progressing items in a timely fashion to remove delays in cash processing -- Action Plan / Results - to date…

23. Solution: Target Operating Model  Data cleansing  Data checking and issue resolution  Bordereaux and payment chasing  Cash matching and issue resolution  Data feeds (various levels and systems)  Reports operational / broker / underwriter / management  Loading of binder /cover details  Loading of history data

24. Provision of agreed monthly packs / flexibility of dashboards - Reporting for performance of the account – premium written vs paid vs expected - Reporting for quality of the data – how many queries / endorsements /corrections - Reporting for servicing of the account – timely receipt of premiums / cash - Reporting to be able to view per class / broker / cover/binder / location - Processing reporting to show volumes / types of issues Claims bordereaux processing - Reporting for performance of the account – loss ratios Future for Singapore – available now

25. Solution: Analytics and Management Information  Automatic production of report pack  Up to date dashboard  Choice of content for reports  Views for underwriter / management  Focus on underwriting not processing

26. Conclusions We do not operate in a perfect world. Expect the unexpected ! Effective Resource + Robust System + Road Tested Solution = Managed Service Delivery. Audit Trails and Transparency = Control via Detailed Management Information. Solution Encompasses Cash Management = Enables Direct Reporting. Tax and Regulatory Reporting = Demonstrates Demands of the Control Framework Addressed. Business Data Feeds + Dashboards = Delivery of Business Decision Information.

27. © Lloyd’s 27 © Lloyd’s 27 Market Relationship & Development At Lloyd’s Sue Baker

28. © Lloyd’s Summary Background Market Relationship & Development – What We Do Our Challenges And What We Can Do For You Contact Details

29. Policyholders  Direct  Reinsurance 55 Managing Agents 55 Managing Agents Management 93 Syndicates Underwriting BUSINESS FLOW CAPITAL PROVISION Members Agents Members Agents Members  Corporate  Individual Corporation of Lloyd’s SEE: www.lloyds.com/directorieswww.lloyds.com/directories 200+ Lloyd’s Brokers Service Companies* 200+ Lloyd’s Brokers Service Companies* Coverholders Source: Lloyd’s as at 1 st April 2014 * some risks are placed directly with managing agent-owned service companies MARKET STRUCTURE

30. © Lloyd’s 30 What do we do? CRM Database Market Mail Outs Managing Agent Relationship Management Lloyd’s Global Development Centre Broker Relationship Management

31. © Lloyd’s Spreadsheets Business cards Outlook Contacts Databases How We Manage Our Contacts & Broadcast Emails Consolidation of contact data – one single source Used for broadcast emails, events and projects DPA compliant contact data Proactively managed Managed distribution lists Users informed of key contact changes InterAction for Contact Management Lloyd’s Have A Huge Number of Contacts 90,000 contacts shared by all the overseas offices 28K contact updates in 2013 22K new records added in 2013, old records removed

32. © Lloyd’s 32 Registration Relationship Management Deregistration The Lloyd’s Broker Lifecycle Broker Relationship Management Responsible for supporting brokers through the lifecycle We get to understand our brokers better through our broker relationships. We can show brokers how they benchmark against peers and maintain a dialogue through the lifecycle.

33. 33 : Due DiligenceImplementation Step 6: Business As Usual 18 – 24 months “heavy touch” validation of business plan And operations Step 4:: Making it Happen Underwriting can commence when conditions of approval met Step 4: Franchise Board Decision in Principle Step 3: New Entrant Assessment Group Detailed review of plan, people, capital reputation and value Step 2: High Level Pitch High level review of plan, people, capital reputation and value Step 1: First approach Specific information to explore possibilities New Entrants – application and approval for new syndicates, SPS’s and managing agents. Managing Agent Relationship Management

34. © Lloyd’s 34 Managing Agent Relationship Management On-going relationships – holistic understanding of managing agents at Lloyd’s and the environment in which they operate Sounding board for new opportunities. Work closely with other areas of Lloyd’s and as part of International Markets to build The Corporation’s view of Lloyd’s businesses Presentations to market participants and key clients, banks, potential capital providers and regulators.

35. © Lloyd’s 35 Lloyd’s Global Development Centre Launched in April, an initiative designed to develop, co- ordinate and deliver educational and network events to promote Lloyd’s Building on Andrew Beasley Broker Academy, it offers regional and London based events targeting overseas brokers and (re)insurance buyers

36. © Lloyd’s 36 Our Passion and Our Challenge To building a holistic view of businesses working at Lloyd’s and our key stakeholders To tailor our approach To use this view to break down the silos. To make Lloyd’s easier to navigate for existing business and attractive for new business(es).

37. © Lloyd’s 37 What We Offer A first contact point A sounding board and discussion partner We can help demystify Lloyd’s

38. © Lloyd’s 38 Contact Details Susan.baker@lloyds.com020 7327 5564Susan.baker@lloyds.com Robert.stevenson@lloyds.com020 7327 5541Robert.stevenson@lloyds.com Nigel.williamson@lloyds.com020 7327 6415Nigel.williamson@lloyds.com

39. © Lloyd’s Q & A 39 Control Framework

40. © Lloyd’s Celebrating success 40 Control Framework Equity Syndicate Management Limited

41. © Lloyd’s41 Control Framework Close Further information on Control Framework – controlframework@lloyds.com Next Breakfast Meeting – 9 th September www.lloyds.com/controlframework