Electronic Claim File Briefing Development and Implementation update 13 th September 2006

1. Electronic Claim File BriefingDevelopment and Implementation update13th September 2006 Follow up to last update on 21st March2006

2. Introduction and Welcome Ian Mallery Status Review Ian Mallery Testing Approach & Outcome Adam Stafford Early Implementations Simon Collins A Broker’s View Trevor Maddison XCS & Electronic Claims Stephen Matthews Project Funding & Governance Carl Phillips Questions and Close Carl Phillips Agenda Page 2

3. Introduction and Welcome Ian Mallery Marlborough and ECPG Page 3

4. Status Review Ian Mallery Marlborough & ECPG Page 4

5. LMA ECF Objective • To replicate today’s file electronically • Not a Blue Sky Claims System development • Based on existing products • Changes to CLASS out of scope (except look and feel) • No change to SCM, USM or LIMCLM • Work with underlying software capabilities • Provide a base product on day 1 • To be evolved once experience gained • Post implementation of base product • Strategic review of on-going development • e.g. Third Party Access / Leader Reserves Page 5

6. Page 6

7. Screen shot – Transaction Summary Screen Page 7

8. Systems Processes & Procedures • Systems Processes and Procedures • High-level guide • NOT a systems user manual or adjusting manual • First time of publishing for the market • Workshops convened to review generic process and class of business variations • Confirmed generic process • Confirmed little variation by class of business • A key benefit was to identify the operational issues Page 8

9. Scope • Business or Claim Types that ECF has Never Been Required to Support: • Claims on unsigned risks • Claims Payable Abroad • General Average • Letters of Credit, loss reserves and Outstanding Cash Advance (OCAs) • Proportional treaties • Scheme Canada • Bulk Settlements • Direct Livestock Page 9

10. Scope • Business or Claim Types excluded from the current implementation of ECF: • Delegated Lead to XCS (other than 100% Delegation, which is in scope) • Binding Authorities, Cover Collections and Other Bordereaux Claims • Political risks • Aviation verticals • Certain Multiple OSND claims • Third Party Access to ECF • Legacy paper claims files • However, solutions in progress Page 10

11. Binders & ECF • Binder characteristics: • Losses within Delegated Authority • say £25k, reported via periodic bordereau • Losses above DA but below Market Reporting Threshold (£100,000) • require separate file but accounted via bordereau • Individual losses above DA & Market Threshold • require individual file & financials cross referenced with the bordereau Page 11

12. The Repository + CLASS model Page 12

13. The Repository + CLASS model Page 13

14. Binders & ECF • However, certain relationships are already implementing binders on ECF • This may produce a transferable model Page 14

15. Features • Broker submits claim electronically • Enables parallel presentation to insurers • Reduces data transcription errors • Allow brokers to concentrate on complex claims • Improved insurer access to information • It’s the insurers’ file • Concurrent access to all subscribing insurers • 24/7 access, worldwide • Business continuity Page 15

16. ECF • Delivers first version • of an integrated electronic claims service for Lloyd’s • replicating existing file electronically • with improvements where possible • companies and syndicates can see the same claim • Things change and we won’t have thought of everything • There will be more issues and enhancements • Legacy claims • Issues recorded Page 16

17. MAT Issues & Sign off • Response times- Ongoing monitoring • Conflicts – Change Request raised • Deny Button – Future discussion at LMCG • All issues logged • Sought unanimous Managing Agent approval • Known issues relayed to SDG • Achieved ECF sign-off Page 17

18. Next Steps • November Release – Patches for faults raised in MAT • February 2007 – Delivery of Key Change Requests • Review of all issues recorded during design • ECPG will continue until March 2007 • Contractual Framework Page 18

19. Market Acceptance Testing Approach and Outcome Adam Stafford MRPO Page 19

20. Timetable • Market involvement in approach through workshops Q1 2006 • ECPG agreement to MAT Plan, Strategy and Comms Plan March 2006 • Scripting, scheduling detailed planning April 2006 • Interactive Testing 15th May – 31st July 2006 • DRI Testing 1st August – 1st September 2006 • Disaster Recovery Tests 23rd – 25th August 2006 Page 20

21. Testing Approach – Brief Overview • Identified a matrix of possible routes a claim can take (around 500) • Resulted in 67 scripts • After removal of duplicate and invalid routes • Each script extended to include Variations and Error Conditions • Each script tested by a different combination of Managing Agent and Broker (with XCS) • Tested End to End claims process from first advice to settlement with Brokers, Managing Agents, Followers and XCS • Ensured consistency of Systems Process and Procedures with operation of the System. Page 21

22. Results • 66 Scripts Completed out of 67 Tested • One script was only 50% proven, with issues arising around conflict notification. • 262 Issues Raised; 243 Resolved • No open ‘Showstoppers’ remain, and all known issues will be resolved by February with some being fixed in November • Stability – during MAT some stability issues arose, these were fixed in early August • Performance – Contractual Requirements have largely been met but some Managing Agents have experienced slow responses. • LMA SDG took decision to go live based on positive presentation from ECPG. Page 22

23. Thanks to all Participants in MAT: • Managing Agents • Ace, Amlin, Beazley, Danish Re, Faraday, Heritage, Hiscox, Limit, Markel, Marlborough, St Paul, Novae (SVB) & Wellington. • Brokers • Benfield, Guy Carpenter, Marsh, Miller & Willis • XCS Page 23

24. Early Implementations Simon Collins MRPO Page 24

25. Early Implementations • Implementation by Broker-driven trading partnerships • by classes of business and risks • with participating underwriters and XCS • MRPO monitoring progress • nearly 3 years • concurrent paper file • Using existing CLASS and repository Page 25

26. Early Implementations • Benefits to Implementers • early experience of electronic work • assess impact on internal broker and carrier procedures and processes • input to system development through ECPG and BEFIT • Benefits to the project • identify problems and issues early • input to system and business process development Page 26

27. Early Implementations • Current Volumes • 9 Brokers, 28 Managing Agents • 10 Classes of business • Over 1000 First Advices • Over 1600 claims movements • Ramp Up • Not “big bang” - managed uptake • Change in culture and processes • Shift from Broker-driven alert to an electronic advice • Build relationships to aid comfort • IUA Pilot Page 27

28. How to get started • Read and understood SP&P • Who are you going to partner with initially? What classes of business? • Signed up to Contractual Framework • Logons, connection, training – Xchanging • Integration Testing • Register all partnerships with MRPO • Business procedure training with the CII • Start up procedures available on market reform website Page 28

29. A Broker’s View Trevor Maddison Marsh and BEFIT Page 29

30. ECF - A Broker’s View • Congratulations, the software is live and we are ready to trade. • Delivery in less than two years • A major slice of market reform delivered through partnerships proving brokers and carriers can work together to deliver real change. • The System Process & Procedure document a perfect example of collaboration. • One remaining broker issue to resolve concerning the Repository rules, end of September target to complete . • 5 brokers publicly committed to trading live, paperless claims. - Aon, Benfield, Guy Carp, Marsh, Cooper Gay - Approx 40pct* of market share new claims Page 30 * Source: Lloyd’s Capital & Broker Relationships

31. ECF - A Broker’s View • IUA Companies now actively participating in pilots. It’s important the entire subscription market commits to ECF to be a true London market success. • The committed brokers need to work closely with their major markets to ensure there is a robust transition process in place. The first 6 months are critical to achieving successful trading and proving a point to all those doubters out there. • The LMBC/BEFIT need to ensure broker involvement is rapid. Underwriters may need to provide some gentle persuasion and encourage take up. • Lets make sure we don’t make ECF prohibitive via cost for the smaller brokers or by making the process over complicated that paper is the only answer. • There will be issues, lets work through these and look forward to providing a first class, paperless claims trading environment which London can be proud of. • New claims today, legacy tomorrow. Page 31

32. XCS and Electronic Claims Stephen Matthews XCS Page 32

33. XCS Involvement & Readiness • Market has already invested £3.5million into development of ECF system • XCS involved in first ECF early roll outs in April 2004 • By August 2006, 74 early roll outs across multiple classes of business • 1000 electronic claims processed • XCS are signed up to Repository Rules Page 33

34. XCS Involvement & Readiness • 35 XCS adjusters trained on ECF system • All XCS adjusters to have at least basic ECF training by end of year • Minimum of 2 ECF adjusters, with one “Expert User”, per class of business • 2 out of 3 XCS adjusters currently have dual screen technology • Dedicated project team of 10 people • Working on solutions – multiple OSNDs, binders, etc. Page 34

35. ECF System: Transaction Summary Page 35

36. Transaction Summary (cont.) Page 36

37. Project Funding & Governance Carl Phillips Amlin & SDG Page 37

38. The Role of the SDG • SDG reports to LMA Market Processes Committee (MPC) • Responsible for delivery of CLASS at Lloyd’s / ECF on behalf of Project fund providers (LMA Members) • Tracks XIS performance against plans / budgets • Manages changes to scope through Change Request Process • Ensures Managing Agents are appropriately involved / informed • Participates in Market Claims Infrastructure Project Board Page 38

39. Time and Budget Summary • Substantial market testing and implementation tasks completed this year • Completed software delivery to enable processing of electronic claims across the Lloyd’s market on time • Will not deliver everything on day one - need on-going maintenance and review of Change Request log • No change to agreed USM & SCM surcharges • Early implementation partnerships growing • Will change working practices from paper to electronic for many claims practitioners Page 39

40. Impact on Budget • No changes to original funding arrangements • 2006 surcharges: • 34p USM & SCM for Repository running costs – reduction from 2005 • 19p SCM for CLASS at Lloyd’s running costs • 25p SCM to December 2006 for repository development • CLASS at Lloyd’s development (£597k) in three instalments • Budget Forecast to the end of 2006 • Implementation, Infrastructure and Running costs £5,266,912 • Change Requests                                                         £ 365,000 • Total charges incurred £5,631,912 • Revenue from surcharges and other licence charges £6,143,941 • Surplus carried forward to 2007 for enhancements £   512,029 • CLASS running costs waived for 2005 • The project remains on budget Page 40

41. Future • Operational electronic claims by end 2006 for brokers, Lloyd’s & IUA. Available today for Lloyd’s & brokers • Roll out for processing new claims will continue into 2007 • Increasing pressure on any non participants • This is just the “Base Camp” - foundation to: • Migrate to ACORD business messages for claims • Eliminate CLASS differences across the multiple systems • Enable third party access e.g. loss adjusters • Move existing claims from paper to electronic • Offer client tracking of claims Page 41

42. Questions & Close Carl Phillips Amlin Page 42