Why Lloyd’s? Lasting the tests of time

1. Why Lloyd’s?Lasting the tests of time Adrian HumphreysCOUNTRY MANAGER May 2011  >www.lloyds.com/MARKETPRESENTATIONS

2. 1 Lloyd’s Platform 2 Lloyd’s key strengths Content 3 Lloyd’s Australia 4 2010 Catastrophes 5 Conclusions

3. 1 Lloyd’s platform • Brief history • Key players LLOYD’S UNIQUE ENVIRONMENT 3

4. LLOYD’S Business> History 1 From Coffee House……to Lloyd’s Members 1689 • Ships and goods insured by wealthy individuals acting on a personal basis. • Lloyd’s Coffee House; first recorded February 1689. 1800 – 1850s • Development of syndicates Present Day • iPhone Historical Context 1712 First steam engine 1750s Beginning of the Industrial Revolution 1805 Battle of Trafalgar 1876 Telephone invented

5. Lloyd’s business > Subscription market 2 “to be the platform of choice for insurance and reinsurance buyers and sellers to access and trade specialist property and casualty risks”.

8. Lloyd’s market structure Corporation of Lloyd’s Management Coverholders 54 Managing Agents 178Lloyd’s Brokers Service Companies* Members Policyholders 82Syndicates • Direct • Corporate Members Agents • Reinsurance • Individual Underwriting BUSINESS FLOW CAPITAL PROVISION SEE: www.lloyds.com/directories Source: Lloyd’s as at 31/12/10 * some risks are placed directly with managing agent-owned service companies

9. 2 key strengths • Security • Brand • Expertise & Flexibility • Licences LLOYD’S PLATFORM 9

10. Lloyd’s strengths > 4 key strengths 2 “to be the platform of choice for insurance and reinsurance buyers and sellers to access and trade specialist property and casualty risks”. • Lloyd’s platform key strengths: • Security and rating • Brand and reputation • Expertise and flexibility • Licence network

11. Lloyd’s > business Results “Solid results in challenging circumstances”

12. Lloyd’s > chain of security “Insurance is a promise to pay”, understanding the security behind your policies is vital when securing your clients future

13. …and our performance compares well against our peers % COMBINED RATIO Sources i) Insurance Information Institute (estimate-2010), ii) Reinsurance Association of America, iii) Company data (8 European companies: 17 Bermudian companies)

14. Lloyd’s strengths> Ratings 2 Lloyd’s strengthened position is recognised by the rating agencies S&P rating actions since January 2002 - Lloyd’s IFS rating has been upgraded to A+, despite downgrades in the wider market Upgraded Unchanged Downgraded Negative outlook Sources: Source: AM Best, Fitch and S&P, 2009

15. Lloyd’s strengths > Brand 2 “I applaud Lloyd’s, which tops the [insurance] category and also secures its highest position in the survey ever. Whilst being highly rated in this survey is pleasant news for the respective brand owners it is also an indicator of their business’s ability to grow through a brand that stakeholders, trust, want and believe in.” Stephen Cheliotis, Chairman of the expert council & CEO, The Centre for Brand Analysis:

16. Lloyd’s strenghts> Flexibility 2 Flexibility, Underwriting Freedom and Extra Capacity were given as the 3 biggest advantages of being a coverholder for Lloyd’s Source: Lloyd’s US MGA Survey

17. 3 Lloyd’s Australia Ltd > Lloyd’s Office> Networking> Regulation & Compliance INSURANCE ENVIRONMENT 17

18. LLOYD’S in Australia> Timeline 4 New legislation formally authorises Lloyd’s to underwriteInsuranceBusiness in Australia April - Lloyd’s Australia opened as permanent office & Steve Boucher appointed full-time Lloyd’s General Representative for Australia 1980 May 2010 1999 Lloyd’s Legal Representative appointed: “1980 Ian Hutchinson, appointed Lloyd’s General Representative in Australia December - Keith Stern appointed Lloyd’s Country Manager for Australia 1973 1989 Australia is Lloyd’s 4th largest market… Growth has been steady over the past 10 years New Lloyd’s Australia Manager “Adrian Humphreys joins Lloyd’s Australia as the Country Manager

19. Market Overview>Market Players 1 High concentration amongst few players - top 5 account for approx. 87% of total Australian PremiumsLloyd’s is currently ranked as 5thin terms of GWP. 19

20. Lloyd’s >Agency distribution overview LLOYD’S COVERHOLDERS 2007 – 2010 Total GSP for Agencies (USD) 1 Important source of income 2 Accessing smaller business lines and facilities 3 Strategic importance of this channel SOURCE: Lloyd’s Strategy 2010 -2012, www.lloyds.com/strategy SOURCE: Market Intelligence based on Gross Signed premiums; Xchanging (2010) 2006 – 2010 Number of Binder by Class 2006 – 2010 Total # of individual Agencies SOURCE: Lloyd’s, Delegated Authority, (2011) SOURCE: Lloyd’s, Delegated Authority, (2011) ! Lloyd’s data is based on Xchanging “REG 258”, (2010); unaudited figures based on country of origin and processing by calendar year; please refer to Appendix for detailed summary of Lloyd’s Data Limitations.

21. Lloyd’s > Lloyd’s Australian Agencies 2 Lloyd’s agencies and service companies you may recognise….. AFA Affinity Risk Partners Brokers AIS Insurance Brokers Altiora Insurance Solutions Aon Risk Services Arch Underwriting at Lloyd’s Asia Mideast Insurance & Reins. ASR Underwriting Agencies ATC Insurance Solutions Aurora Underwriting Agency Ausnet Underwriting Agency Austagencies Austbrokers RWA Austbrokers Sydney Australian Income Protection Australian Reinsurance U/w Svs Australis Group Underwriting Austruck Insurance Axis Underwriting Services Beazley Underwriting Bizcover Brit Insurance Brooklyn Underwriting Brooks Inglis Insurance Brokers Catlin Newmarket Insurance Brokers Nova Underwriting Online Insurance Brokers Parmia PI Direct Insurance Brokers Professional Risk U/w QBE Placement Solutions Resource Underwriting Pacific Richard Oliver Risk Insure Southern Cross Underwriting Transcorp Underwriting Tasman Underwriting Sterling Insurance Savannah Insurance Agency SLE Worldwide Sportscover SRS Underwriting Agency Starr Underwriting Trafalgar Risk Management Trident Insurance Group Trinity Pacific U/w Agencies Willis Winsure Insurance Group CBD Underwriting Celestial Underwriting Agency Cerberos Brokers Cerberus Special Risks CKA Risk Solutions Columbus Direct Travel Ins. Coverforce Underwriting Dolphin Insurance Dual East West Insurance Brokers Elkington Bishop Molineaux Epsilon Insurance Broking Services Fenton Green & Co Film Insurance Underwriting Agencies Fitton Insurance Brokers Freeman McMurrick General Security Insurance Brokers Gow-Gates Insurance Brokers Guardian Underwriting Services High Street Underwriting Agency Hiscock Insurance Brokers Horsell International H W Wood IBL Indemnity Corporation Insurance Advisernet Insure That International Underwriting Svs Jardine Lloyd Thompson JMD Ross Insurance Brokers JUA Underwriting Agency Lawsons Underwriting Australasia Logan Livestock Insurance Agency London Underwriting Macquarie Underwriting Magic Millions Insurance Brokers Mansions of Australia Manufactured Homes Ins Agency Marsh Midas Insurance Brokers Millennium Underwriting Agencies Miller & Associates Ins Broking Miramar Underwriting Agency Mobius Underwriting National Underwriting Agencies Nautilus Marine Insurance Agency Newline Insurance Market Intelligence based on: Lloyd’s 2007 - 2010 Statistics in Gross Signed Premiums

22. Lloyd’s > Agencies by geography 2 http://www.lloyds.com/Lloyds/Offices/Australasia/Australia/Lloyds-in-Australia Market Intelligence based on: Lloyd’s 2007 - 2010 Statistics in Gross Signed Premiums

23. Lloyd’s Australia >Purpose 5 Promote and protect the Lloyd’s brand in Australiaand facilitate the development of new relationships.Gateway to Australian market with broad expertise available to assist in business development activities. AUSTRALIA TEAM OFFICE FACILITIES General Representative: Adrian Humphreys Compliance Manager: Tracey Bryan Office Manager: Martina Lee RELATIONSHIP FACILITATOR • Meet and engage with managing agent representatives, underwriters and brokersin London; • Assistance with local market intelligence; • Networking events/promotional & sponsorship activities; • Facilitate introductions fornew business; • Point of contactand primary Lloyd’s market resource.BRAND PROMOTION & PROTECTION • Promote the profileof the Lloyd’s brand; • Ensure general interests of Lloyd’s are served;Legislative and regulatory compliancewith the law. View from Lloyd’s Australia Office window – Feb 2011 • Meeting Room available • Teleconferencing system SEE ALSO: www.lloyds.com/AUSTRALIAwww.lloyds.com/MARKETINTELLIGENCE 23

24. ACCESSING LLOYD’S> 2011 Lloyd’s Priorities The 2011 Priorities of Lloyd’s have been identified as follows: • Performance management -A resolute focus on underwriting discipline and • risk management • Solvency II -Implementing Solvency II at Lloyd’s in a way that protects, and • where possible, enhances Lloyd’s capital structure and efficiency • The Exchange -Increasing adoption and use of The Exchange • Claims Transformation -Driving a transformation in the way the Lloyd’s • market handles claims to enhance the experience of the customer • Access to business -Improving access to business through streamlining • Underwriting Agency management strengthening broker relationships and gaining new trading rights Source: Market Review Report, 22nd June 2010, Lloyd’s Analysis Team

25. 4 catastrophes • Context • Distribution Overview • Establishment Offices INSURANCE ENVIRONMENT 25

26. Catastrophes >Protocols 3 Lloyd’s and the ICAhave establishedprotocols for the catastrophes which have occurred in the last year. LLOYD’S INFORMATION ON LLOYD’S.COM • Lloyd’s Cat Response Panel • Lloyd’s Australia set up freephone number and dedicated email 2010 Annus Horribilis • Project Horizon, Perth Windstorm, Melbourne Hailstorm, Chile • Recent Australian cats, $92m incurred claims • Current total net estimates are: • US$ 650m - Australia flooding • US$ 1.95bn - Japan earthquake and tsunami • US$ 1.2bn - New Zealand earthquake DEDICATED HELPLINE UNQIUE EMAIL CONTACT INFORMATION FOR ALL A PRIORITY FOR LLOYD’S

27. 5 Conclusions 27

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