Electronic Accounting – Guy Carpenter’s experience

1. 24th July 2008 Electronic Accounting – Guy Carpenter’s experience Roy Maddison / Danny Hickey

2. Why introduce electronic accounting? • Guy Carpenter had successfully implemented Accounting and Settlement and ECF with Xchanging using DRI transmission. • Although documents were sent electronically, transactional data was still being re-keyed by Xchanging. • We wanted to explore full electronic messaging with a third party and held preliminary discussions with a number of reinsurers.

3. Why introduce electronic accounting? • Swiss Re in Zurich were selected as our preferred partner as they were already using forms of electronic messaging with other brokers. • Swiss Re were also familiar to our software supplier, Trace Isys. • A visit was arranged to Zurich by representatives of both Guy Carpenter and Trace Isys to discuss the project in greater detail.

4. Why introduce electronic accounting? The Zurich visit covered:- • Swiss Re’s experiences of e-accounting to date • Current and future state business processes • Technology capability, codesets and standards • Delivery/Implementation options • Agreement of project plan and timescales • Risks and Issues • Legal and compliance requirements • Was attended by both business and IT users.

5. Implementation • Following the Zurich visit, Guy Carpenter and Trace produced a Functional overview document to support our business case. • The document included our proposals to:- • Introduce e-Accounting processing capability in TWINS for all classes of business • Introduce monitoring tools for management of messages • Build software with a ‘look and feel’ similar to existing A&S/ECF applications (Ease of use to end user)

6. Implementation – Additional Features • As part of implementation, the following additional capability would be developed:- • Delivery of documents via e-mail to markets (using central inboxes) • Run-off broking market solutions. • Ability to switch off paper production for electronic markets

7. Benefits • Faster Processing Cycles • Linking Technical closing to Financial settlement • Improved query routines • Improved reconciliation • Quality of data • Consistent process disciplines • Audit controls • Operational Efficiencies • Reputation/Positioning

8. Testing • Following approval and development of the software by Trace Isys, a large volume of testing commenced:- • Rigourous testing of TWINS changes • Initial “hand-shaking” messages with Swiss Re • Testing with Swiss Re using pre-planned scenarios • Ad-hoc testing as required between all parties • Good co-ordination and flexibility essential • Regression testing a must at all stages • Include plenty of proportional treaty scenarios!

10. Implementation • Following successful testing, a one month pilot project was implemented using live data across all disciplines (premiums, claims, proportional treaties and fiduciary settlements) • Successful pilot project then led to press release to media and full implementation from April 2008.

11. Electronic Accounting – How does it work? • Technician processes transaction on TWINS (no change to previous processing screens) • TWINS recognises that an electronic recipient is on risk and generates package to which the electronic technical message and back-up documentation (PDF, XLS, etc.) can be attached • Message is sent by the processing technician. • Swiss Re then review the technical message and either Agree, Query or Reject. • Once the technical message has been agreed, the item can be included on the next financial settlement between Guy Carpenter and Swiss Re.

12. Electronic Accounting – How does it work? • All messages are transmitted and monitored with new software which prioritises items according to status and internal SLAs. • Traffic light system dictates priority of the item (Red, Amber, Green)

13. Electronic Accounting – How does it work? Any queries are automatically fed to :- • Our internal query monitoring system

14. Electronic Accounting – How does it work? Any queries are automatically fed to :- • The transaction ledger

15. Electronic Accounting – How does it work? • Queries are then resolved via email/telephone if no further processing is required – underwriter can change status from queried to accepted. • However, if item requires cancellation / replacement, these transactions are then sent electronically to resolve issue. • Upon agreement, item will be included in the next financial account message • Once financial account message is agreed by Swiss Re, payment automatically follows within 5 days

16. Electronic Accounting – What advantages are we seeing? • Greater efficiency in delivering documentation and matching of cash • Process is fully audited throughout • Queries are now the responsibility of the processing technician – fiduciary amounts cannot be settled until any technical issues are resolved. (i.e. queries are dealt with by the correct parties immediately) • Once contracts are matched with Swiss Re’s system, our reference is bound with for all future transactions. (Will prevent queries as a result of unidentified contracts) • Software has enabled us to implement e-mail delivery to other markets –greater efficiency for technicians

17. Electronic Accounting - Essentials • Thorough testing • Good project management • Flexibility of all parties to arrive at business solution. • Executive buy-in • Disciplined team • Selling the strategic vision to all • Explore additional benefits and quick wins • Media communication

18. Any Questions?