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Peter Holdstock Senior Executive – Market Processes Lloyd’s Market Association 020 7327 8383

Peter Holdstock Senior Executive – Market Processes Lloyd’s Market Association 020 7327 8383 peter.holdstock@lmalloyds.com. The Dilemma. Brokers waiting for carriers to be open for business electronically. Carriers waiting for brokers to bring business electronically. Lloyd's Exchange.

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Peter Holdstock Senior Executive – Market Processes Lloyd’s Market Association 020 7327 8383

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  1. Peter Holdstock Senior Executive – Market Processes Lloyd’s Market Association 020 7327 8383 peter.holdstock@lmalloyds.com

  2. The Dilemma Brokers waiting for carriers to be open for business electronically Carriers waiting for brokers to bring business electronically Lloyd's Exchange Lack of electronic transactions makes engagement with practitioners difficult

  3. Lloyd’s Exchange Brokers Managing Agents Insurance Companies Phase One 5 11 4 Phase Two 13 25 5 (55) (80) Phase Three 21 28 29 47 5 5 Confirmed Target

  4. Broker ‘Readiness’ • Aon • Marsh • Willis • JLT • BMS • Miller • Price Forbes • Denis M Clayton • RK Harrison • AHJ • AJ Gallagher • HSBC • Heath Lambert • Tysers Live through RI3K Planning A&S is a priority LEX phase 3 Live through RI3K Live LEX phase 2 No immediate plans LEX phase 2 LEX phase 1 Investigating options LEX phase 2 No immediate plans LEX phase 1

  5. Trading activity • Evidence of management and technical engagement • Strong participation in Lloyd’s Exchange • Increasing broker ‘readiness’ • BUT • Lack of transaction volume • Messaging: • 20 firms connected (5 brokers & 15 carriers) • 7 firms transacting (3 brokers & 4 carriers) • 3551 risks and 2140 endorsements • RI3K: • 110 firms (2 brokers & 108 carriers) • 18,318 risks and 12,878 endorsements What are brokers plans to transfer existing volumes on to the Exchange? What really is the intention of firms regarding live trading?

  6. Benefits during the process Benefits from ePlacing 80% 70% 60% 50% 40% 30% 20% 10% 0% Delivery of documentation Receipt of quote slip Placement negotiation Electronic advice of signed line Delivery of firm Order terms Quote creation Endorsements Binding Considerable Benefit Underwriter Considerable Benefit Broker Source: ‘ePlacement in 2009: An Update’ - Watertrace

  7. Market Dynamics Complexity Simple Medium Complex Documents Placement Negotiation Maintain contact with underwriter between busy renewal periods. Address client perception that endorsements processing adds little value. Quote Creation Function Firm Order 100% Placings Lineslips Partnerships Segmentation (E.g. COBs) Binding Signed Line Advice Brokers’ business strategy tends to be revenue focused rather than managing cost. Endorsements Endorsements Declarations Declarations Vertical Slices Commercial opportunities Horizontal Slices Operational characteristics Private Public How to obtain market-level benefits without watering down individual commercial opportunities.

  8. The Next Six Months Proposal being developed for EPSG • Governance. Clarify project aims and objectives. • Re-focus EPSG and EPIG. Increased drive through market • associations. • Use Lloyd’s Exchange Forum to address business • implementation needs of practitioners. • Initiate a Class of Business pilot. • Refine and embed the EP process from a practitioners’ • perspective. • Work with the market to develop case studies. • Initiate a program to help the market manage the • business change by establishing and running practitioner • workshops.

  9. Peter Holdstock Senior Executive – Market Processes Lloyd’s Market Association 020 7327 8383 peter.holdstock@lmalloyds.com

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