It’s coming There will be pain to get the gain Who is your business sponsor?

1. ECF Key Messages • It’s coming • There will be pain to get the gain • Who is your business sponsor? • If you handle claims, the way you do your job will change

2. Electronic Claim File BriefingDevelopment and Implementation update21st March 2006 Follow up to last update and demonstration on 1st November 2005

3. Introduction and welcome Carl Phillips Status review Ian Mallery Broker’s view Chris Reay Project funding and governance Martin Dyer ECF & market reform Andy Brookes Questions and close Carl Phillips Agenda Page 3

4. Introduction and Welcome Carl Phillips Amlin Page 4

5. Status Review Ian Mallery Marlborough & ECPG Page 5

6. 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) • 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 Page 6

7. Status todayKey Enhancements in 5 Phases Phase 1 - See all documents in one view Phase 2 - Leader control of file/improved searching Phase 3 - ACORD DRI (receipt of documents) Completed 2005 Phases 4/5 – Merged into a single phase CLASS @ Lloyd’s data through GUI, full DRI and Seamless link with documents in repository MAT starts 15 May 2006 (38 days to go!) Live – mid-September Page 7

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9. Screen shot – Transaction Summary Screen Page 9 Screens are currently under development and are subject to change

10. Work Completed Since November 2005 • Finalised initial change requests (Big Issue /DRI etc) • Minimum System Standards – Sent to Compliance and IT Directors • Convened Technical Implementation Group to advise on ACORD standards • Review legal governance of electronic claims • Interchange Agreement • Initiated Legal Review of Electronic Responses Page 10

11. Systems Processes & Procedures • Systems Processes and Procedures • High-level guide • NOT a systems user manual or adjusting manual • 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 following operational issues: Page 11

12. Systems Processes & Procedures (cont.) • Identify the following operational Issues (Hotspots): • Big Issue Resolved • Binders Change Request Raised • Bulks/Blocks Analysis in Progress • Document Rules Analysis in Progress • Delegation to XCS Change Request Raised • M.A. Workflow Change Request Raised • Partial Markets Change Request Raised • Non Broker Triggers Analysis in Progress Page 12

13. 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 13

14. The Repository + CLASS model Page 14

15. The Repository + CLASS model Page 15

16. 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 Page 16

17. Next Steps • Phase 5 delivery to MAT mid-May 2006 • 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 17

18. A Broker’s View Chris Reay Willis Page 18

19. A Broker’s View • Mid-Sept launch date is not too far away now! • 4 brokers publicly committed to supporting this initiative • Aon, Benfield, Marsh, JLT; • making up approx. 35% premium income* (Lloyd’s) • 38 days to Market Acceptance testing • Benfield • Guy Carpenter • Marsh • Miller • Willis Page 19 * Source: Lloyd’s Capital & Broker Relationships

20. Highlights • Valuable lessons continue to be learnt from early implementers • 39 ECF partnerships created • 6 brokers/17 managing agents, 2 companies – experience gathers pace • Over 360 claims files • Generating over 600 transactions electronically to date • IUA Companies now actively participating in pilots – adding to the ground swell • LMBC working closely with MRPO to ensure success of project • Initial feedback from Lloyd’s Brokers has been positive – further follow ups / presentations planned for April / May Page 20

21. Issues to consider • Will there be sufficient number of market claims practitioners trained and ready to go live? • Process issues arising from early implementations will restrict certain business classes / placing processes • This is a significant cultural shift in how the London market will operate – are we really ready for it? • The market continues to work together to resolve them • This is the 1st major step along a new path Page 21

22. Looking to the future • The infrastructure has been proven – we’ve got a good base • Essential enhancements scoped and included in the continual development plan • Electronic claims servicing is a realistic tool for the London market • So let’s do away with the luggage and stop walking paper around these streets! Page 22

23. Project Funding & Governance Martin Dyer St. Paul Travelers & SDG Page 23

24. 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 24

25. Time and Budget Summary • On track for software delivery to process electronic claims across the Lloyd’s market • No change to agreed USM & SCM surcharges • Early implementation partnerships growing • Substantial market testing and implementation tasks this year • Will change working practices from paper to electronic for many claims practitioners • Will not deliver everything on day one - need on-going maintenance and review of Change Request log Page 25

26. 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 from January 2006 for repository development • CLASS at Lloyd’s development (£597k) in three instalments • Budget Position to the end of 2005 • Implementation, Infrastructure and Running costs £1,546,663 • Change Requests                                                         £ 365,000 • Total charges incurred £1,911,663 • Revenue from surcharges and other licence charges £2,786,259 • Surplus carried forward to 2006 £   874,596 • CLASS running costs waived for 2005 • The project remains on budget Page 26

27. Future • Operational electronic claims by end 2006 for brokers, Lloyd’s & IUA • 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 27

28. ECF & Market Reform Andy Brookes Market Reform Programme Office Page 28

29. ECF: Key part of the London process reform programme • Overall aim: • A framework of standards for business processes that enables firms to deliver services efficiently to customers at a cost and level of risk comparable with other platforms • Note: • Any costs inherent in a subscription market must be offset to deliver this comparability. • Any changes in business process must be managed in such a way as to avoid undermining the unique qualities/competitive advantages of the London Market. Page 29

30. ECF is not happening in isolation • Claims beyond ECF • Change requests – no system stays put • Claims infrastructure to include IUA • Protocols (LMP2001); Lloyd’s Claims Scheme • Support Claims Strategy & Minimum Standards • Integration with other reform workstreams • Accounting & Settlement • Contract Certainty Page 30

31. Integration with other workstreams • Accounting and Settlement • Measurement checks; A&S repository; A&S strategy for P2P • Repository use • London market use of ACORD DRI Standards • P2P A&S: strategy questions for claims • Contract Certainty • More certain contracts = fewer coverage disputes • Roles & responsibilities clearly defined • Repositories….again (e.g. model wordings) Page 31

32. Implementation approach • Lead implementers • Prepare to follow: • Commercial • Lloyd’s performance standards • Regulatory better MI pressure • Sponsors; project managers Page 32

33. Questions & Close Carl Phillips Amlin Page 33

34. Access • Can you access the internet from your desktop? • Are you familiar with looking at messages, data and information? • On your Personal drives or My Documents? • On Shared or Network Drives? • On websites? • The Insurers’ Market Repository is just another folder of documents • but market wide • 24/7 access from anywhere • Home, overseas, or even in the office • controlled by CLASS security access Page 34

35. What should YOU do now? • Assess and plan for the impact on you • How many adjusters have you got? • How many will need access to this system? • Can you connect to these new services? • Who will be responsible for implementing in your agency? • How will you ensure they are trained in CLASS and the repository? • Are you as a leader prepared for the change of responsibility for controlling the file? Page 35

36. Next Steps • This is coming in September – are you ready? • Deadline for nominating two people: • project leader, business sponsor • Slides to go to compliance and head of claims • 1 page letter to CEOs • Contact: Market Reform Programme Office Ben Sayles Project Manager ben.sayles@lloyds.com Page 36

37. ECF Key Messages • It’s coming • There will be pain to get the gain • Who is your business sponsor? • If you handle claims, the way you do your job will change Page 37