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Introduction to the Rüschlikon Initiative Rüschlikon Industry Panel, April 2009

Introduction to the Rüschlikon Initiative Rüschlikon Industry Panel, April 2009. Agenda. An Introduction to the Rüschlikon Initiative: What? Why? When? Who? And How? An introduction to SWIFT What is different this time? Features and Benefits Contacts. insurers. insurers. brokers.

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Introduction to the Rüschlikon Initiative Rüschlikon Industry Panel, April 2009

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  1. Introduction to the Rüschlikon InitiativeRüschlikon Industry Panel, April 2009

  2. Agenda • An Introduction to the Rüschlikon Initiative: • What? Why? When? Who? • And How? • An introduction to SWIFT • What is different this time? • Features and Benefits • Contacts

  3. insurers insurers brokers brokers re re - - insurers insurers hub services services The Rüschlikon Initiative - Goals For Reinsurers, Insurers and Brokers of Reinsurance and Large Commercial risks (ie those supported by ACORD RLC Standards), this will: • Replace paper by e-data to deliver benefits of cost, speed and quality • Avoid proprietary standards and connections and foster anindustry solution for the benefit of all participants • Enable the evolution of the (re)insurance business model • Enhance the reputation and attractiveness of the insurance industry for investors and other stakeholders Rüschlikon solution Peer-to-Peer

  4. The Rüschlikon Initiative – What is it? • The vision: a central platform for harmonised automation of insurance transaction processing • The benefits: Increase speed, quality and transparency of transactions, to accelerate cashflow and reduce unit costs • The starting point: a pilot focused on ACORD standards and accounting processes for reinsurance transactions • A new SWIFT SOAP-over-https service reusing SAG, WSHA, Browse components • With a new application framework • pioneers include: • SwissRe • MunichRe • SCOR • AONBenfield • Willis • ACORD • SWIFT

  5. 2 1 Rüschlikon Scope Central Service Cedent / Broker Initial Contract Ref. Premium Account Claims Movement Financial Statement of Accounts Acknowledgement per Message Payment Single Point of Access 1 2 3 4 3 5 Services 4 5 6 Validation Mapping 6 Reinsurer Storing Routing 1 2 3 4 Value added Reports 5 Shared process rules 6

  6. The Rüschlikon Initiative – When? • Pioneers will join the pilot from April 2009 till March 2010 • Early adopters will join during or after the pilot • The first phase will focus on messaging (data exchange), and subsequent phases will deliver: • validation • matching and pairing • netting … and possibly more

  7. The Rüschlikon Initiative – How? Milestones: - Project Definition Document signed 17.9.08 - Rulebook and Commercial Framework agreed 18.03.09 - Pilot started May 2009 - First package of additional functionality Autumn 2009 - Fully open solution available March 2010

  8. Reinsurers Premium/Claims closings Statements Cash Acknowledgements Acknowledgements Rüschlikon Message flows in initial scope Brokers & Cedents Brokers’ Banks Reinsurers’ Banks

  9. And the costs? • The initial development costs for hub and software are borne by the SWIFT and the five pioneering Rüschlikon members The future operation and development is mainly funded by transaction fees paid by the sender, which will decrease with the overall message volume being transmitted through the hub The recurring cost for a typical ceding company is estimated to be below EUR 20’000 per year The cost/effort for the initial set-up (mapping of own data to Acord RLC, production of XML files) is dependent on the current infrastructure and EDI-capabilities

  10. Many prior initiatives have failed –What is different this time? • The maturity of standards and technical solutions is higher than during the times of RINET (the suffering from inadequate processes too) • We focus on non-competitive admin. and information processes • Exclusion of all quoting, placing and trading components which are by nature competitive and potentially in conflict with anti-trust law • Avoidance of big startup investments – use existing data standards, message forms, interfaces and platform • Choice of an experienced non-for-profit partner from the banking side: SWIFT • Inclusion of leading brokers in pilot team (Aon-Benfield, Willis) • Structuring as open market initiative without access or exit restrictions  no hidden agenda

  11. How can the Rüschlikon Initiative help to reform the insurance market? Short term: • Global implementation of ACORD RLC standards • Availability of joint message transmission platform • Secure transmission of data and files • Many peer-to-peer connections replaced by one SWIFT connection • Acceleration of accounting processes and cash flow Longer term: • Straight through processing of (re)insurance data • Additional efficiency in the areas of settlement, pairing and payment • Reduction of credit risk • Process statistics and benchmarks • Evolution of the business models (e.g. risk trading)

  12. Contacts andrew.muir@swift.com +44 207 762 2030 peter_arbenz@swissre.com +41 43 285 3358 rlaker@acord.org +44 207 617 6405

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