1. Coverholders Market Access Study International Markets Market Intelligence April 2010 FOR MANAGING AGENTS AND BROKERS

2. © Lloyd’sCoverholders - Market Access Study2 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX Content CLICK ANY BOX FOR NAVIGATION  Explains the OBJECTIVES of this study Explains the OBJECTIVES of this study  Summarises the METHODOLOGY of this study Summarises the METHODOLOGY of this study  Lists the DATA LIMITATIONS of this study Lists the DATA LIMITATIONS of this study  Explains the MATRIX used to asses Lloyd’s strengths by risk group Explains the MATRIX used to asses Lloyd’s strengths by risk group  MATRIX RESULTS by: MATRIX RESULTS by:  COUNTRY CATEGORY COUNTRY CATEGORY  DISTRIBUTION CHANNEL DISTRIBUTION CHANNEL  TARGET CLASSES as identified by Lloyd’s Capability Analysis for Coverholder business in New Markets. TARGET CLASSES as identified by Lloyd’s Capability Analysis for Coverholder business in New Markets.  Basic overview of the above TARGET CLASSES Basic overview of the above TARGET CLASSES  LLOYD’S DISTRIBUTION CHANNELS used in Europe by proportion of premiums (Reinsurance, Direct & Coverholders) LLOYD’S DISTRIBUTION CHANNELS used in Europe by proportion of premiums (Reinsurance, Direct & Coverholders)  Segmentation into COUNTRY CATEGORIES for Europe from a Lloyd’s perspective by premiums (Established, New & Non-Established) Segmentation into COUNTRY CATEGORIES for Europe from a Lloyd’s perspective by premiums (Established, New & Non-Established) ABOUT THIS STUDY APPENDIX LLOYD’S CAPABILITY ANALYSISLLOYD’S EUROPEAN DISTRIBUTION LLOYD’S STRENGTHS KEY MESSAGES

3. © Lloyd’sCoverholders - Market Access Study3 Key Messages > Summary MESSAGE # 1: At different stages of development, markets have different characteristics. LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX MESSAGE # 2: This study has helped to identify target business classes exhibiting high growth / high volume business for Lloyd’s in Europe:  by country category (Established, New & Non-Established); and  by distribution channel (Reinsurance, Direct & Coverholders). MESSAGE # 3: This study has used Poland as a case study to look at classes of business which are exhibiting high growth / high volume business for Lloyd’s for Coverholder business. Those target classes have been analysed in greater detail which is shared with Managing Agents via: Managing Agent Download: www.lloyds.com/regionalwatch > Managing Agent Version > Polandwww.lloyds.com/regionalwatch Questions on Coverholders: www.lloyds.com/coverholderswww.lloyds.com/coverholders

4. Lloyd’s European Distribution 1 > Lloyd’s Overview > Country Categories > Established Markets > New Markets > Non-Established Markets > SummaryLloyd’s OverviewCountry CategoriesEstablished MarketsNew MarketsNon-Established MarketsSummary LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

5. © Lloyd’sCoverholders - Market Access Study5 2008 European Distribution > Lloyd’s Overview INDEXED ANNUAL GROSS WRITTEN PREMIUMS 80 90 100 110 120 130 140 200220032004200520062007 Direct Reinsurance Grand Total Coverholders Index 2002 = 100 SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in Appendix; 2008 spike largely due to exchange rate movements vis-a-vis GBPAppendix EUROPE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

6. © Lloyd’sCoverholders - Market Access Study6 European Distribution > Country Categories CATEGORISATION  For the purpose of the further analysis, countries in Europe (excluding UK) are grouped in three categories according to:  Lloyd’s revenues generated per country,  License type,  Length of Lloyd’s Office establishment. France Italy Germany Netherlands Switzerland Ireland Greece Denmark Belgium Channel Islands Cyprus Gibraltar Malta ESTABLISHED Norway Spain Sweden Austria Portugal Poland NEW SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in Appendix; Countries generating < GBP 10m in annual GWP were ignored in this studyAppendix Russia Turkey Luxembourg Finland Azerbaijan Romania NON-ESTABLISHED LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

7. © Lloyd’sCoverholders - Market Access Study7 European Distribution > Lloyd’s Overview INDEXED ANNUAL GROSS WRITTEN PREMIUMS Direct Reinsurance Grand Total Coverholders Index 2002 = 100 SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in Appendix; 2008 spike largely due to exchange rate movements vis-a-vis GBPAppendix ESTABLISHED 200220032004200520062007 90 100 110 120 130 140 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

8. © Lloyd’sCoverholders - Market Access Study8 European Distribution > Lloyd’s Overview INDEXED ANNUAL GROSS WRITTEN PREMIUMS Direct Reinsurance Grand Total Coverholders Index 2002 = 100 SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in Appendix; 2008 spike largely due to exchange rate movements vis-a-vis GBPAppendix 200220032004200520062007 NEW 80 100 120 140 160 180 200 220 240 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

9. © Lloyd’sCoverholders - Market Access Study9 European Distribution > Lloyd’s Overview INDEXED ANNUAL GROSS WRITTEN PREMIUMS Direct Reinsurance Grand Total Coverholders Index 2002 = 100 SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in Appendix; 2008 spike largely due to exchange rate movements vis-a-vis GBPAppendix 200220032004200520062007 NON-ESTABLISHED 60 80 100 120 140 160 180 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

10. © Lloyd’sCoverholders - Market Access Study10 European Distribution > Summary GROSS WRITTEN PREMIUMS SPLIT (2008) Direct Reinsurance Grand Total Coverholders SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix 0% 25% 50% 75% 100% EUROPE ESTABLISHEDNEWNON-ESTABLISHEDPOLAND LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

11. Lloyd’s Capability Analysis 2 > The Model > Reinsurance > Direct > CoverholdersThe Model ESTABLISHEDNEWNON-ESTABLISHED ESTABLISHEDNEWNON-ESTABLISHED ESTABLISHEDNEWNON-ESTABLISHED LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

12. © Lloyd’sCoverholders - Market Access Study12 Lloyd's Capability Analysis > The Model MODEL SUMMARY SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix X axis – Growth rank: Business classes are ranked according to their Compound Annual Growth Rate (CAGR) calculated for the 2002 – 2008 period. Business class with the rank 1 had the highest growth rate, whereas business classes with the rank 25 or above had the lowest or negative growth rate during the period. Y axis – Size rank: Business classes are ranked according to 2008 revenues. Business class with the rank 1 was the largest in 2008 in terms gross written premiums, whereas business classes with the rank 25 or above were the smallest in the same year. Pre-defined Criteria of Matrix Terrorism Energy Offshore Engineering Financial Guarantee Marine Liability Fine Art Airline/ general aviation (liabs) Livestock & Bloodstock Jewellers Cargo Medical Expenses Accident & Health (direct) Property (direct & facultative) Airline/ general aviation (hull) Space Contingency/ other pecuniary NM general liability (direct) Professional Indemnity War Medical malpractice Marine Hull Directors & Officers Overseas motor Financial Institutions Political Risks/ contract frustration 1 5 9 13 17 21 25 15913172125 GROWTH RANK SIZE RANK Business classes that generate high revenues for Lloyd’s. Due to historically high growth rate these business classes also have the highest potential for the future revenue development. HIGH GROWTH / HIGH VOLUME 1 High volume business classes that have been growing at a slower pace or have been contracting. However, these are important classes as they still provide high revenue streams for Lloyd’s. Low GROWTH / high VOLUME 2 Business development opportunities within the sector have to be evaluated with great care, as some low volume classes, carrying extreme growth rates, grew from nil revenue level during last 6 years, and therefore might not reflect the future growth potential. High GROWTH / low VOLUME 3 Lloyd’s business classes that generate small revenues now and have low growth potential in the future. The sector has the lowest new business development potential. Low GROWTH / low VOLUME 4 12 34 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

13. © Lloyd’sCoverholders - Market Access Study13 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK Medical Expenses Directors & Officers Property cat XL UK motor Employers liability Terrorism NM general liability Overseas motor Term life Legal expenses Property NM casualty treaty Fine Art Marine XL Energy Onshore Professional Indemnity Cargo Marine Hull Accident & Health Energy Offshore Personal accident XL Aviation products/ airport liabilities Financial Institutions Nuclear Airline/ general aviation (hull) Contingency/ other pecuniary Jewellers Aviation XL Property risk XS Property pro rata Marine Liability Livestock & Bloodstock Engineering War Space Specie Airline/ general aviation (liabs) Financial Guarantee Medical malpractice 1 7 13 19 25 31 37 171319253137 Target Business Classes for this Segment ESTABLISHEDREINSURANCE KEY MESSAGES Property Marine Hull Terrorism Non-Marine Casualty Treaty Marine XL Accident & Health Energy Onshore Cargo Fine Art Aviation Products / Airport Liabilities Energy Offshore Non-Marine General Liability LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX “For Established Markets, Property, Marine Hull, Terrorism as well as Non-Marine Casualty Treaty tend to be the classes of business with high growth / high volume business for Lloyd’s via the Reinsurance channel.” SEE, Categorisation for definition of Established MarketsCategorisation

14. © Lloyd’sCoverholders - Market Access Study14 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK NEWREINSURANCE Property pro rata Space Professional Indemnity Engineering Contingency/ other pecuniary Employers liability Terrorism NM casualty treaty Fine Art Property Financial Guarantee Energy Offshore Aviation products/ airport liabilities Livestock & Bloodstock NM general liability Cargo Marine XL Personal accident XL Marine Hull Property risk XS Property cat XL Accident & Health Marine Liability Airline/ general aviation (hull) Energy Onshore Specie Political Risks/ contract frustration Airline/ general aviation (liabs) War Financial Institutions Aviation XL Term life Jewellers Medical malpractice Directors & Officers Medical Expenses Overseas motor 1 7 13 19 25 31 37 1713192531 Target Business Classes for this Segment Property Energy Offshore Engineering Marine XL Marine Hull Terrorism Cargo Contingency / Other Pecuniary Aviation Products / Airport Liabilities Non-Marine Casualty Treaty Fine Art Non-Marine General Liability LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For New Markets, Property, Energy Offshore, Engineering as well as Marine XL tend to be the classes of business with high growth / high volume business for Lloyd’s via the Reinsurance channel.” SEE, Categorisation for definition of New MarketsCategorisation

15. © Lloyd’sCoverholders - Market Access Study15 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK NON-ESTABLISHEDREINSURANCE Contingency/ other pecuniary Engineering Political Risks/ contract frustration Employers liability NM general liability Terrorism Aviation XL NM casualty treaty Aviation products/ airport liabilities Directors & Officers Professional Indemnity Medical malpractice Personal accident XL Space Energy Onshore Jewellers Fine Art Marine Liability Airline/ general aviation (hull) Marine XL Term life Specie Property pro rata Financial Institutions Property Energy Offshore Airline/ general aviation (liabs) Marine Hull Accident & Health Cargo Property risk XS Financial Guarantee Livestock & Bloodstock Property cat XL Overseas motor War 1 7 13 19 25 31 37 1713192531 Target Business Classes for this Segment Terrorism Energy Onshore Accident & Health Airline / General Aviation (Hull) Aviation XL Space Non-Marine General Liability Marine Liability Marine XL Financial Institutions Property Energy Offshore LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For Non- Established Markets, Terrorism, Energy Onshore, Accident & Health as well as Airline / General Aviation (Hull) tend to be the classes of business with high growth / high volume business for Lloyd’s via the Reinsurance channel.” SEE, Categorisation for definition of Non-Established MarketsCategorisation

16. © Lloyd’sCoverholders - Market Access Study16 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK DIRECTESTABLISHED Energy Onshore Legal expenses Energy Offshore Jewellers Cargo Medical Expenses Financial Institutions Employers liability Financial Guarantee Engineering Medical malpractice Livestock & Bloodstock Fine Art Marine Hull Marine Liability Aviation products/ airport liabilities UK motor Professional Indemnity Directors & Officers NM general liability Accident & Health Property Political Risks/ contract frustration Term life Overseas motor Airline/ general aviation (hull) Contingency/ other pecuniary Specie Space War Terrorism Airline/ general aviation (liabs) Extended warranty 1 5 9 13 17 21 25 29 33 1591317212529 Target Business Classes for this Segment Marine Hull Energy Offshore Terrorism Professional Indemnity Financial Guarantee Cargo Medical malpractice Marine Liability Accident & Health Aviation Products / Airport Liabilities Non-Marine General Liability Jewellers LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For Established Markets, Marine Hull, Energy Offshore, Terrorism as well as Professional Indemnity tend to be the classes of business with high growth / high volume business for Lloyd’s via the direct channel.” SEE, Categorisation for definition of Established MarketsCategorisation

17. © Lloyd’sCoverholders - Market Access Study17 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK DIRECTNEW Energy Offshore Energy Onshore Marine Liability Overseas motor War Accident & Health Airline/ general aviation (hull) Airline/ general aviation (liabs) Cargo Contingency/ other pecuniary Directors & Officers Employers liability Engineering Financial Guarantee Financial Institutions Fine Art Jewellers Livestock & Bloodstock Marine Hull Medical Expenses NM general liability Political Risks/ contract frustration Professional Indemnity Property Space Specie Term life Terrorism Aviation products/ airport liabilities 1 5 9 13 17 21 25 29 1591317212529 Target Business Classes for this Segment Energy Offshore Marine Hull Marine Liability Political Risks Accident & Health Terrorism Cargo Non-Marine General Liability Financial Guarantee Specie Financial Institutions Professional Indemnity LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For New Markets, Energy Offshore, Marine Hull, Marine Liability as well as Political Risks tend to be the classes of business with high growth / high volume business for Lloyd’s via the direct channel.” SEE, Categorisation for definition of New MarketsCategorisation

18. © Lloyd’sCoverholders - Market Access Study18 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK DIRECTNON-ESTABLISHED Energy Onshore Professional Indemnity Space Specie Accident & Health Airline/ general aviation (hull) Aviation products/ airport liabilities Cargo Contingency/ other pecuniary Directors & Officers Energy Offshore Engineering Financial Guarantee Financial Institutions Fine Art Jewellers Livestock & Bloodstock Marine Hull Marine Liability NM general liability Political Risks/ contract frustration Property Term life Terrorism War Airline/ general aviation (liabs) 1 6 11 16 21 26 16111621 Target Business Classes for this Segment Terrorism Marine Hull Energy Offshore Airline / General Aviation (Hull) Professional Indemnity Accident & Health Financial Institutions Directors & Officers Engineering Marine Liability Jewellers Non-Marine General Liability LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For Non- Established Markets, Terrorism, Marine Hull, Energy Offshore well as Airline / General Aviation (Hull) tend to be the classes of business with high growth / high volume business for Lloyd’s via the direct channel.” SEE, Categorisation for definition of Non-Established MarketsCategorisation

19. © Lloyd’sCoverholders - Market Access Study19 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK COVERHOLDERESTABLISHED Energy Onshore Property cat XL Energy Offshore Terrorism Political Risks/ contract frustration Term life Airline/ general aviation (liabs) Space Airline/ general aviation (hull) Aviation products/ airport liabilities Cargo Financial Guarantee Fine Art Specie Livestock & Bloodstock Professional Indemnity Accident & Health (direct) Directors & Officers Marine Liability Property (direct & facultative) Jewellers Marine Hull War Overseas motor Medical malpractice UK motor Contingency/ other pecuniary Engineering Legal expenses Property pro rata NM general liability (direct) Medical Expenses Employers liability Financial Institutions 1 4 7 10 13 16 19 22 25 28 31 34 147101316192225283134 Target Business Classes for this Segment Cargo Fine Art Professional Indemnity Term life Accident & Health Property Livestock & Bloodstock Airline / General Aviation (Hull) Terrorism Directors & Officers Marine Hull Jewellers LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For Established Markets, Cargo, Fine Art, Professional Indemnity as well as Term Life tend to be the classes of business with high growth / high volume business for Lloyd’s via the Coverholder channel.” SEE, Categorisation for definition of Established MarketsCategorisation

20. © Lloyd’sCoverholders - Market Access Study20 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK NEWCOVERHOLDER Energy Onshore Energy Offshore Aviation products/ airport liabilities Financial Guarantee Terrorism Engineering Medical Expenses Airline/ general aviation (liabs) Airline/ general aviation (hull) Cargo Livestock & Bloodstock Contingency/ other pecuniary NM general liability (direct) Marine Hull Fine Art Property (direct & facultative) Marine Liability Professional Indemnity Jewellers Accident & Health (direct) War Overseas motor Medical malpractice Space Directors & Officers Financial Institutions Employers liability Term life Legal expenses 1 5 9 13 17 21 25 29 1591317212529 Target Business Classes for this Segment Cargo Marine Hull Property Professional Indemnity Non-Marine General Liability Fine Art Medical Expenses Contingency / Other Pecuniary Jewellers Livestock & Bloodstock Accident & Health Marine Liability LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For New Markets, Cargo, Marine Hull, Professional Indemnity tend to be the classes of business with high growth / high volume business for Lloyd’s via the Coverholder channel.” SEE, Categorisation for definition of New MarketsCategorisation

21. © Lloyd’sCoverholders - Market Access Study21 Lloyd's Capability Analysis > The Matrix SOURCE: Xchanging, “REG 258”, (2009); please note data limitations as described in AppendixAppendix GROWTH RANK SIZE RANK NON-ESTABLISHEDCOVERHOLDER Terrorism Energy Offshore Engineering Financial Guarantee Marine Liability Fine Art Airline/ general aviation (liabs) Livestock & Bloodstock Jewellers Cargo Medical Expenses Accident & Health (direct) Property (direct & facultative) Airline/ general aviation (hull) Space Contingency/ other pecuniary NM general liability (direct) Professional Indemnity War Medical malpractice Marine Hull Directors & Officers Overseas motor Financial Institutions Political Risks/ contract frustration 1 5 9 13 17 21 25 15913172125 Target Business Classes for this Segment Marine Liability Accident & Health Property Terrorism Fine Art Space Cargo Jewellers LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX KEY MESSAGES “For Non- Established Markets, Marine Liability, Accident & Health, Property well as Terrorism tend to be the classes of business with high growth / high volume business for Lloyd’s via the Coverholder channel.” SEE, Categorisation for definition of Non-Established MarketsCategorisation

22. Lloyd’s Strengths 3 > Qualitative Analysis > Qualitative Outcomes > Quantitative Outcomes > Coverholder Profile:Property – Home & Commercial > Coverholder Profile:Liability – Professional Indemnity > Coverholder Profile:PA & Health – Accident > Coverholder Profile:MAT- Cargo > Coverholder Profile:MAT – Marine Hull > Coverholder Profile: Property – Fine ArtQualitative AnalysisQualitative OutcomesQuantitative OutcomesProperty – Home & CommercialLiability – Professional IndemnityPA & Health – AccidentMAT- CargoMAT – Marine HullProperty – Fine Art LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

23. © Lloyd’sCoverholders - Market Access Study23 Lloyd’s Strengths > Qualitative Analysis QUALITATIVE ANALYSIS: BASED ON: LONDON INTERVIEWS Accident & Health (direct)Marine XL Airline/ general aviation (hull)Medical Expenses Airline/ general aviation (liabs)Medical malpractice Aviation products/ airport liabilitiesNM casualty treaty Aviation XLNM general liability (direct) CargoNuclear Contingency/ other pecuniaryOverseas motor Directors & OfficersPersonal accident XL Employers liabilityPolitical Risks/ contract frustration Energy OffshoreProfessional Indemnity Energy OnshoreProperty (direct & facultative) EngineeringProperty cat XL Extended warrantyProperty pro rata Financial GuaranteeProperty risk XS Financial InstitutionsSpace Fine ArtSpecie JewellersTerm life Legal expensesTerrorism Livestock & BloodstockUK motor Marine HullWar Marine Liability Non-life business classes To help maximise Lloyd’s business opportunities in Lloyd’s “NEW “ Markets, this study sought to understand what makes Lloyd’s an attractive proposition for local market players. A series of interviews were conducted with underwriters and Lloyd’s staff in London to explore:  What is Lloyd’s competitive advantage?  Who is Lloyd’s target customer?  Who is Lloyd’s competing against in their target segments? A more detailed look at business classes was essential in assessing Lloyd’s competitive position.  Lloyd’s generates profitable revenues from Marine Liability business in country X.  Is this because of the offered cover, rates, distribution channels, underwriting expertise, or due to any other factors? LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

24. © Lloyd’sCoverholders - Market Access Study24 Lloyd’s Strengths > Qualitative Outcomes QUALITATIVE OUTCOMES: LONDON INTERVIEWS QUESTION: What makes a local company a suitable partner for coverholder business?  LOCAL KNOWLEDGE – Underlying product knowledge (i.e. yachts, fine art), insurance market knowledge and relationships with the end customers. Ideally, a potential coverholder has a solid track record in the market and already manages a portfolio of local business.  INSURANCE KNOWLEDGE – Understanding of insurance concepts, as well as the book of business that the potential coverholders handle, including a good understanding of premiums and loss ratio that they produce for a local insurer.  BUSINESS PLAN – Persuasive and robust business case, covering distribution, underwriting, financial and managerial aspects.  FINANCIAL STABILITY – Reputable shareholders and sound financial performance.  LLOYD’S FAMILIARITY – Understanding of the Lloyd’s model and unique Lloyd’s profitability requirements.  GOOD REPUTATION – Integrity and professionalism.  TECHNICAL ABILITY – Discipline and capacity to service local clients, handle insurance contracts and claims, collection and process premiums.  ENGLISH LANGUAGE SKILLS In many cases coverholders are small local brokers with good regional business connections. Retail brokers very often do not understand or are aware of the coverholder concept due to their commission focus, leading to conflict of interests and adverse selection. All the above is unimportant if the coverholder does not have the technology to speedily issue documents and to report data electronically to London, so that the underwriters can be aware of the status of the account on a real time basis. Other Comments LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

25. © Lloyd’sCoverholders - Market Access Study25 Lloyd’s Strengths > Quantitative Outcome QUANTITATIVE ANALYSIS: BASED ON LLOYD’S CAPABILITY STUDYLLOYD’S CAPABILITY STUDY Access to Case Study on Primary Growth Classes Managing Agents have access to the Polish case study on primary growth classes on: > www.lloyds.com/regionalwatch > Managing Agent Version > Polandwww.lloyds.com/regionalwatch PRIMARY GROWTH CLASSES  Cargo  Professional Indemnity  Accident & Health  Fine Art  Marine Hull  Property SECONDARY GROWTH CLASSES  Overseas Motor  Livestock & Bloodstock  Jewellers  Medical Malpractice  Directors & Officers Further business classes where Lloyd’s was successful in building its market position in coverholder business in Europe were: LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

26. © Lloyd’sCoverholders - Market Access Study26 Lloyd’s Strengths > Property Home & Commercial (1 of 2)2 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories COVERHOLDER PROFILE Sub-Class HOME & COMMERCIAL Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks Average size coverholder generates GBP 800k – GBP 1m annual gross written premiums. Capacity is usually limited to GBP 4 – GBP 8m for any one coverholder. Coverholders, irrespective of the territories, are usually required to produce a minimum 70% - 80% loss ratio on a net premium basis. Claims handling authority depends on the coverholder’s experience, and varies dramatically. Most profitable coverholders produce annual revenues above GBP 10m with only GBP 150 average premium per policy. Higher volumes and lower values generally produce better results. Lloyd’s coverholders compete with the market by offering optional extras to the cover, i.e. loss of profits / rent, flexibility in stock valuation, etc. Local insurers however can offer similar cover, so coverholders’ ability to compete by offering a wider cover is limited. When compared to the local market, Lloyd’s coverholders have a lot more sophisticated product for homeowners insurance. Local insurers would offer straightforward Property insurance, whereas Lloyd’s coverholder includes other risks (i.e. personal liability) to make cover more comprehensive. The coverholder business model may be challenged via diverging interpretations and implementation of regulations. There appears to be growing emphasis on transparency on intermediary compensation. Lloyd’s European Premium Profile Property Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 118.82m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.05% 1. France 2. Ireland 3. Germany A: Based on Total Premium in European Countries* during 2008 LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

27. © Lloyd’sCoverholders - Market Access Study27 Lloyd’s Strengths > Property Home & Commercial (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class Customers Distribution Competition Coverholders usually specialise in specific customer market segments, i.e. homeowners, holiday houses, SMEs, distressed properties such as nightclubs, and expatriate households. Lloyd’s coverholders are usually multiline, i.e. other insurance products are also sold to the same customers. The strength of the Lloyd’s brand is an important factor for many local customers. The combination of a coverholder-branded product with the strength of the Lloyd’s brand is often a strong value proposition to local customers. Distribution channels vary from country to country. The competition is mostly price driven, however coverholders win business by having closer relationship with the insurance buyers as well as by offering superior service. Service levels local companies – particularly in more immature markets – tend to be poor. Lloyd’s European Premium Profile Property Customer Needs (2009 Questionnaire) 2008 A A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.05% Specialist UW knowledge UW Service and Decisions Price Competitiveness Claims Service Based on prompted questionnaire, (November 2009) HOME & COMMERCIAL GBP 118.82m COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

28. © Lloyd’sCoverholders - Market Access Study28 Lloyd’s Strengths > Liability Professional Indemnity (1 of 2)2 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class PROFESSIONAL INDEMNITY (PI) Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks Average size coverholder generates between GBP 400k – GBP 800k annual gross written premiums. Larger coverholders produce GBP 2.5 – GBP 4m annual income. Average premium per insured ranges from GBP 1k to GBP 5k. Maximum capacity given to a coverholder would not exceed GBP 5m, although higher risks could be placed on a facultative basis into the Lloyd’s Market. The loss ratio ranges from 0% to 120% on a net premium basis, with 40% - 60% being a rough average. Coverholders are usually required to produce a maximum 70% loss ratio on a net premium basis. Total commissions can reach 30%. Very few coverholders have local claims handling authority. In very rare cases, the coverholder is allowed to handle claims up to GBP 10k. Lloyd’s coverholders usually offer the broadest and most tailored cover. PI is one of the few insurance classes that has not been commoditised even in the developed markets. Lloyd’s offers only claims made basis cover, therefore in Germany, Austria and CEE it remains difficult to compete in compulsory PI classes requiring acts committed cover. Coverholders have bigger competitive advantage in terms of offered cover in CEE where PI is an adjusted version of general liability cover. When delegating underwriting authority, managing agents would agree underwriting guidelines, rating schedules, and covered classes with a local coverholder. Lloyd’s European Premium Profile Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 80.47m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.69% 1. Italy 2. France 3. Spain A: Based on Total Premium in European Countries* during 2008 Liability COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

29. © Lloyd’sCoverholders - Market Access Study29 Lloyd’s Strengths > Liability Professional Indemnity (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class Customers Distribution Competition Many coverholders are built on the relationship with local professional associations. Customers are usually local SMEs. Coverholders specialise in the specific professional lines within a broader PI sector. Professional lines with higher revenue streams differ from country to country as follows:  In Italy most business comes from accountants, lawyers, architects, and engineers;  France: architects, engineers, and insurance intermediaries;  Spain: construction related PI, and insurance intermediaries. Management consultancies is a new developing professional occupancy with a high PI insurance demand. Lloyd’s brand is a strong sales argument for many PI customers, as it is very often related to a recognised status perception. Lloyd’s brand is especially strong among Italian insurance intermediaries and buyers of insurance. Distribution of business varies from country to country. Agents offer a stronger sales channel in some countries, whereas brokers dominate in others. Price is the most important competition driver, however the second most important factor is service. Lloyd’s coverholder can outperform local insurers with their superior service provision as well as embedded relationships with the associations. Some local insurers still underestimate the importance of service provision, and offer their services on a “one size fits all” basis. Lloyd’s has a competitive advantage in terms of its bespoke product in less mature markets. Product innovations, however, are very quickly picked up and copied by the local competition. Lloyd’s European Premium Profile Customer Needs (2009 Questionnaire) 2008 A A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.69% Specialist UW knowledge UW Service and Decisions Price Competitiveness Claims Service Based on prompted questionnaire, (November 2009) Liability GBP 80.47m PROFESSIONAL INDEMNITY (PI) COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

30. © Lloyd’sCoverholders - Market Access Study30 Lloyd’s Strengths > PA & Health Accident (1 of 2)2 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class ACCIDENT Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks The size of a coverholder ranges from GBP 100k to GBP 5m gross annual written premiums. The average coverholder generates GBP 800k annual gross written premiums, however underwriters would look at minimum GBP 100k per coverholder. Maximum line per coverholder for “any one event” (AOE) is GBP 20 – GBP 30m, maximum line for “any one person” (AOP) is GBP 7m. Average AOE limit is GBP 5 – GBP 10m, and GBP 1.5m for AOP. Average sum insured AOP is GBP 500k. Usually a special acceptance is required for risks exceeding 50% of the capacity. Coverholder results are very volatile, however on average A&H coverholders are profitable and produce 50% - 60% loss ratio on a net premium basis. Average total commissions reach 30% - 35% of gross written premiums. In some cases coverholders can negotiate flexible commission from risk carriers. Lloyd’s tends to offer the widest and most flexible cover in the market. Local insurers rarely cover War risk, Nuclear Chemical Biotechnology risk, war zones, and “Failure to Survive” among other higher exposure risks. Lloyd’s coverholders have a competitive edge due to their capacity. Local insurers can hardly match Lloyd’s by offering GBP 20m for “any one event” cover for large corporate clients. Lloyd’s coverholders also offer higher AOP sum insured reaching up to 10 times the salary of the insured (5 times the salary for sportsmen and for the policyholders in the war territories). Lloyd’s European Premium Profile Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 52.29m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 9.31% 1. Netherlands 2. Italy 3. France A: Based on Total Premium in European Countries* during 2008 PA & Health COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

31. © Lloyd’sCoverholders - Market Access Study31 Lloyd’s Strengths > PA & Health Accident (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class Customers Distribution Competition Lloyd’s coverholders usually cover distressed PA business, or risks requiring higher limit cover that is difficult to place in local markets. Main customer segments are sportsmen, actors, keymen – top executives, policyholders exposed to the war territories (security guards, news corporations, demining and reconstruction workers), airlines crews, and corporate clients with a high “any one event” exposure. Distressed PA business is shared 50/50 by brokers and direct distribution channels. Most of the coverholders specialise in the specific customer market segments: i.e. sportsmen, corporate clients, or high net worth individuals. Lloyd’s European Premium Profile Customer Needs (2009 Questionnaire) 2008 A A: Actual Total Premium in European Countries* CAGR 2002 - 2008 9.31% Specialist UW knowledge UW Service and Decisions Based on prompted questionnaire, (November 2009) ACCIDENT PA & Health GBP 52.29m Flexibility, breadth cover, brand, security, and line size offered differentiates Lloyd’s coverholders from the competition. In many cases Lloyd’s coverholders can also offer better service than local insurance providers. COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

32. © Lloyd’sCoverholders - Market Access Study32 Lloyd’s Strengths > MAT Cargo (1 of 2)2 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class CARGO Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks Coverholders generate from GBP 60k to GBP 600k annual gross written premiums, however in many cases the same coverholder would also write other lines of business. Average premium for any one insured is GBP 300 – GBP 600. GBP 6m is usually a maximum capacity given to a coverholder, however in developing markets this is usually limited to GBP 3m. Risks above GBP 600k would need special approval from Lloyd’s underwriters. Average sum insured of any one risk is also around GBP 600k. Loss ratio per coverholder varies from 60% – 80% on a net premium basis. Some coverholders do not have any authority to handle claims locally, whereas more experienced coverholders handle claims up to GBP 15k. Usually Lloyd’s coverholders have to find a competitive edge in terms of scope of cover due to a higher commission structure. This could include: Terrorism cover, broader cover for the liability section, product recall, contingency risks, cover for perishable goods etc. Lloyd’s coverholders try to be innovative and provide the cover with no predetermined set of conditions. However, since most local insurers use the same Institute Clauses, Lloyd’s coverholders rarely have a competitive advantage in terms of wider cover proposition. Lloyd’s has a very strong brand name in the Cargo insurance market. It is one of the competitive advantages for local Lloyd’s coverholders, relating to Lloyd’s expertise, financial security, innovation of products, service, and claims handling. Lloyd’s European Premium Profile MAT Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 37.70m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 21.52% 1. Belgium 2. France 3. Ireland A: Based on Total Premium in European Countries* during 2008 COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

33. © Lloyd’sCoverholders - Market Access Study33 Lloyd’s Strengths > MAT Cargo (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class CARGO Customers Distribution Competition Customers are usually small-medium local enterprises. Coverholders would usually cross sell other insurance products to their customers. Cargo distribution channels vary, however it is mostly a broker dominated market The expertise of local Insurers varies depending on the area. Strong domestic carriers are usually a big threat for coverholder business development. However, it may be beneficial for the coverholder if the local carrier is not providing a good service. Price remains the main competition driver, but quality of security, breadth of cover, and service are still important factors. Lloyd’s European Premium Profile MAT Customer Needs (2009 Questionnaire) Specialist UW knowledge Security / Financial Strength UW Service and Decisions Price Competitiveness Claims Service Based on prompted questionnaire, (November 2009) 2008 A GBP 37.70m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 21.52% COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

34. © Lloyd’sCoverholders - Market Access Study34 Lloyd’s Strengths > MAT Marine Hull (Yachts) (1 of 2)2 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class MARINE HULL (YACHTS) Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks More than 75% of Marine Hull business underwritten via coverholders is yachts insurance. The smallest yacht coverholders produce GBP 500k – GBP 600k annual gross revenues. As the coverholder develops annual premiums grow up to GBP 1.2m on average. Average premium per insured yacht is GBP 600 – GBP 1k. Average sum insured for any one yacht is GBP 150k, whereas maximum limits per coverholder usually are set at GBP 500k – GBP 600k. Coverholder results are very volatile, however on a five year horizon, underwriters would expect a maximum 75% loss ratio on a net premium basis. On average yachts coverholders produce between 55% - 70% loss ratio on a net premium basis. Commission usually comprise 20% – 22.5% to a coverholder and 7.5% to a wholesale broker. Coverholders are allowed to handle claims locally of up to USD 10k for any one claim. Lloyd’s coverholders tend to offer the broadest cover in the market. The market however is becoming increasingly commoditised as local insurers very quickly match Lloyd’s coverholder terms. The risks are mainly underwritten on named perils Institute Clauses. However in some cases all risk American yacht forms R12 are used. When delegating authority, underwriters agree rating schedule, limits, that depend on the type, mileage, and location of the craft among other factors. Lloyd’s has a competitive advantage in offering higher commission to local intermediaries. Local insurers usually cannot offer more than 12.5% commission, whereas Lloyd’s coverholders can go as high as 17.5% on the gross written premium basis. Lloyd’s European Premium Profile MAT Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 34.13m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.02% 1. Sweden 2. Norway 3. Italy A: Based on Total Premium in European Countries* during 2008 COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

35. © Lloyd’sCoverholders - Market Access Study35 Lloyd’s Strengths > MAT Marine Hull (Yachts) (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class MARINE HULL (YACHTS) Customers Distribution Competition Business development strategies differ across coverholders. While some focus on relationships with Yacht associations, others advertise their insurance to the general public as a retail product. Price is a more important factor for lower value yachts (below GBP 500k), whereas security becomes an important aspect for the more expensive yacht owners. Aside price, prestige associated with Lloyd’s brand is an important sales argument both for local coverholders and for the end customers. Yachts insurance is distributed by both brokers and agents. The level of coverholder business understanding is comparatively high among insurance intermediaries. Yachts managing companies is an important insurance distribution channel in some countries. Yachts managing companies in some countries also act as coverholders. Price is the main driving factor behind the competition, which has intensified more recently. Axa and Generali are very competitive in price and in the offered cover. However, Lloyd’s coverholders are also competitive, and in many cases outperform the competition. Lloyd’s European Premium Profile MAT Customer Needs (2009 Questionnaire) 2008 A A: Actual Total Premium in European Countries* CAGR 2002 - 2008 10.02% Specialist UW knowledge UW Service and Decisions Price Competitiveness Claims Service Based on prompted questionnaire, (November 2009) GBP 34.13m COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

36. © Lloyd’sCoverholders - Market Access Study36 Lloyd’s Strengths > Property Fine Art (1 of 2)2 Sub-Class FINE ART Premiums / Capacity Scope of Cover / Exclusions Profitability / Claims Other remarks Average size coverholder generates GBP 600k – 800k annual gross written premiums. Premium per insured varies from GBP 500 to GBP 50k with an average premium of around GBP 5k. Capacity rarely exceeds GBP 30m of any one coverholder, where GBP 15m is estimated to be an average. Sum insured of any one risk varies dramatically with GBP 600k being a rough average. Loss ratio per coverholder varies from: 40% – 60% on a net premium basis. Commissions to coverholders can reach up to 35% of gross written premiums. Some claims handling is delegated to the local coverholder, however claims exceeding GBP 25k are handled at Lloyd’s. Local insurers historically offered peril basis cover only. This gave a competitive advantage to Lloyd’s, offering cover on an all risks basis. The situation has changed as local insurers have caught up and are increasingly offering all risks cover. Generally, in more immature markets, Lloyd’s can still offer a wider cover, i.e. no transit limit, broader coverage, higher limit, lower deductibles etc. Empowerment, control, and ownership are the main arguments for selling the coverholder concept to potential coverholders. Lloyd’s European Premium Profile Property Lloyd’s European Top Markets (by 2008 GWP) 2008 A GBP 31.6m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 15.7% 1. Italy 2. France 3. Netherlands A: Based on Total Premium in European Countries* during 2008 SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

37. © Lloyd’sCoverholders - Market Access Study37 Lloyd’s Strengths > Property Fine Art (2 of 2) SOURCE: Soft intelligence based on London Interviews, (November / December 2009); Europe as defined in categorisation at Country CategoriesCountry Categories Sub-Class FINE ART Customers Distribution Competition Customers include private collectors, dealers, auction houses, and museums / galleries. Private collectors and small galleries are the most common customer segments. The coverholder would usually also target a specific customer group. Fine Art is mostly a direct insurance market (especially in the private customer market segment). In some countries policies are distributed via the internet. Some coverholders therefore also maintain internet platforms for distribution of their policies. Brokers are usually involved with the larger commercial clients such as galleries or auction houses. Local insurers in the mature markets have strong expertise in the business. Competitors, such as AXA Direct, offer all risks cover which is not dissimilar from Lloyd’s cover. In more mature markets price is becoming the most important competition driver. Service and security still remain important differentiating factors. Coverholders usually can offer better service to a local client, therefore it is an important proposition when competing with local insurers. Lloyd’s European Premium Profile Property Customer Needs (2009 Questionnaire) Specialist UW knowledge Security / Financial Strength UW Service and Decisions Price Competitiveness Claims Service Based on prompted questionnaire, (November 2009) 2008 A GBP 31.6m A: Actual Total Premium in European Countries* CAGR 2002 - 2008 15.7% COVERHOLDER PROFILE LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

38. 4 About this Study > Objectives > Output > MethodologyObjectivesOutputMethodology LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

39. © Lloyd’sCoverholders - Market Access Study39 About This Study > Objectives OBJECTIVES  The aim of the Market Access Study was to help maximise opportunities for Lloyd’s business in markets where Lloyd’s is not well established.  While the Lloyd’s brand is well known and respected in the majority of developing markets, awareness not always transforms into business opportunities.  The underlying methodology and research approach of this study has been developed through a case study on coverholder opportunities in Poland. LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

40. © Lloyd’sCoverholders - Market Access Study40 About This Study > Output OUTPUT  The study revealed six high growth business classes generating the largest revenues for Lloyd’s from coverholder business for the category of “new markets”.  More in depth analysis was conducted on those business classes from a coverholder perspective in Poland.  This summary of this analysis has been shared with Managing Agents via Regional Watch - Poland. > Managing Agents have access to Regional Watch – Poland at: >www.lloyds.com/regionalwatch > Polandwww.lloyds.com/regionalwatch LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

41. © Lloyd’sCoverholders - Market Access Study41 About This Study > Methodology METHODOLOGY  Understanding Lloyd’s market In order to fulfil the objectives of the project, the central stage of the project has covered an understanding of Lloyd’s, its strengths, capabilities, unique value proposition, needs of managing agents and brokers, as well as coverholder business strategies.  Polish market study In order to understand characteristics of an “emerging market” in the Lloyd’s context, a close working relationship was formed with the Lloyd’s Country Manager in Poland, Witold Janusz. Along internal and external data collection, local market players were interviewed, in order to assess market sophistication and maturity as well as its business fit with Lloyd’s unique selling points (USPs). LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

42. Appendix 5 > Data LimitationsData Limitations LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

43. © Lloyd’sCoverholders - Market Access Study43 Appendix > Data Limitations Data limitations: DATA LIMITATIONS Please note the information contained in this document is based upon data collected from Xchanging and may be incomplete for some classes of business; for instance a substantial figure, which is missing from the REG 258 data set is comprised of UK Motor, which is not processed by Xchanging. GROSS PREMIUMS: Original and additional inward premiums, plus any amount in respect of administration fees or policy expenses remitted with a premium but before the deduction of outward reinsurance premiums. Lloyd’s figures are based on gross written premiums based on figures processed by Xchanging by processing year and country of origin. COUNTRY OF ORIGIN: This denotes the country from where demand for the insurance / reinsurance emanates; i.e. the coverholder or policyholder, irrespective of the country to which the risk is classified for regulatory reporting purposes. PROCESSING YEAR: This relates to the calendar year in which the premium, additional or return premium is processed by Xchanging, irrespective of the actual underwriting year of account of the risks (which is determined by the inception date of each risk). Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by Country Of Origin, but French for regulatory reporting purposes. Similarly a risk incepting on 1st December 2007 would be classified at 2007 underwriting year of account but may not be processed by Xchanging until 2008 and so be allocated to the 2008 processing year. LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

44. Disclaimer "This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the information Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or liability for any loss to any person acting or refraining from action as a result of, but not limited to, any statement, fact, figure, expression of opinion or belief contained in this document". LLOYD’S EUROPEAN DISTRIBUTIONCONTENTABOUT THIS STUDYLLOYD’S CAPABILITY ANALYSISLLOYD’S STRENGHTSAPPENDIX

45. © Lloyd’sCoverholders - Market Access Study45