eAccounts – Xchanging services eAccounts Group

1. eAccounts – Xchanging serviceseAccounts Group 18th September 2008 Stewart McCulloch / Rupert Jessop

2. Purpose of Today • Suggest some common language from Xchanging of key terms • Provide clarity as to what Xchanging is suggesting for eAccounts • An overview of ELPAN2 progress to date as a production service and future plans • Accounting Splits overview of proposed service • Provide an overview of the challenges that we all have in making an eAccounts service • Validate that our vision and proposed services are in line with your expectations • Answer questions, take requests for further information and organise follow-up sessions This is a considerable programme of technology and process change, which Xchanging is planning to deliver. These dates should be regarded as indicative at the moment depending on further detailed discussions with stakeholders. This process will still some weeks and ideally will be agreed with the MRG at its October meeting.

3. A&S is only the start of it… • A&S is well used within the market and rollout has been moving at pace • Currently 95% of original premiums are submitted electronically • Currently 75% of additional and return premiums are submitted electronically • Brokers have engaged with developing gateways for use of ACORD messages for our A&S DRI services and have engaged software providers to improve the way they process submissions • Xchanging have an industrialised set of tools and processes for dealing with electronic submissions • The IMR Security Model programme will allow us to overcome the remaining barriers to use • The IMR upgrade programme will improve the architecture of A&S and put us on a sound footing for the future • BUT…. • This is a solution for scanned documents and much of the key information has to be re-keyed by Xchanging • Londonisms remain a substantial diversion for Brokers

4. Objectives of our eAccounts service • Move to the use of structured data for key fields • Use international (i.e. ACORD) standards for submissions • Reduce the amount of Xchanging keying that occurs on submissions and improve data quality (i.e. move to a world of what you submit is exactly what you get back) • Remove the concept of Work Order and LPAN • Remove the burden of performing Accounting Splits from the Market • Provide a consistent splits service and reduce the query / rejection loops • Continue to fulfil reporting requirements (e.g. Lloyd’s and existing reports) • Minimise carrier impact • Make the service ‘pick n mix’ for Brokers with no requirement to go ‘Big Bang’ • Removal of BSM (optional) and some London specific messages

5. eAccounts - some concepts • ELPAN2 – Xchanging’s implementation of ACORD messaging to allow Brokers to advise of a debt (TA) and triggering settlement (FA) • Accounting Splits service – Xchanging’s service to allow submission of fundamental level TAs and for us to process as non-fundamental (i.e. perform the split). • eAccounts – both services above combined • Technical Account (TA) – structured data to advise the debt • Financial Account (FA) – trigger for settlement (remittance advice) • Acknowledgments • Level 3 - application validation has occurred • Level 4 - business validation has occurred • Fundamental LPAN – level of accounting that a Broker would normally expect to account to an insurer • Non-fundamental LPAN – premium breakdown that is required to satisfy the insurer’s reporting

6. What we have done • ELPAN2 Release 1 • TA message spec defined and independently reviewed (ACORD certified) • Incorporated into existing gateway (to minimise Broker setup) • Has been live since Dec 2007 and is currently processing live transactions • Accounting Splits • Prototype has occurred to validate XIS understanding of the splits process (this is not envisaged to reflect the process that we will use in production) • XCS engaged on their impacts • Auto-Loading (ELPAN2 Release 2) • Prototypes developed for POSH (company) • Prototypes developed for LIDS (Lloyd’s) • Approved projects for delivery in Q1 2009 • Planning • Analysis of the impact of splits has occurred and an XIS architecture proposed • Indicative plans have been developed for discussion with the MRG

7. Our vision for the end of 2009 • ELPAN2 • FA in place for company (Q2 proposed) • FA in place for Lloyd’s submissions (Q4 proposed) • Accounting Splits • Commercial arrangements in place to support service • XIS / XCS Technicians trained • Technical changes – delinking, consistency for central settlement, BSM aggregation, some report changes and workflow mgt • Auto-Loading (ELPAN2 Release 2) • Auto-Load in place for company and Lloyd’s submissions (Q1 proposed) • Planning • Rollout plans complete / in progress / being defined with Brokers • Definition for any future plans for further enhancing the service in 2010

8. Future considerations • It is proposed the following are built into future releases: • Level 4 acknowledgments to replace signing number and date • Defining an ACORD query loop • Reporting improvements to increase visibility for Brokers and Carriers • Receipt and use of placing messages to further enhance data integrity and reduce manual steps in splits process

9. Our suggested approach to eAccounts • Things to consider: • Whether you want to go ‘Big Bang’ when all of the eAccounts offering is in place • Do you want to wait until everything is in place to begin your development? • Suggested approach: • Define the services and validate them with the Market • Work with the Market to finalise Xchanging’s overall delivery agenda for 2009 • Finalise the funding of the Accounting Splits ongoing service • Brokers work with their software providers to choose their rollout strategy • Brokers choose to incorporate the delivery of eAccounts into delivery plans for 2009 • Xchanging works with Brokers to review any material that they want for completeness with the service • Managed roll-out with individual organisations to support Brokers

10. eAccounts - Appendix

11. ELPAN2 and ACORD • ACORD Messages • DRI 1.2 Upload and Smart Notify operations to submit documents • RLC 2005.2 Technical Accounts to submit accounting data • RLC 2005.2 Level 3 Acknowledgements to confirm acceptance or reason for rejection • XIS messages have been certified by ACORD • XIS messages are closely aligned with ACORD EBOT recommendations • Some ‘essential’ Londonisms • - London broker and carrier codes- UMR- Broker Reference 1 & 2- Grouping of messages to enable subscription market processing

12. ELPAN2 Release 1 – What we have now • The Broker submits TAs at the non-fundamental level • An XIS application validates TAs and returns a Level 3 Acknowledgement • An XIS application creates LPANs and Work Orders, which are loaded onto the Market Repository • An XIS Workflow entry is created • XIS technicians key the data into POSH & LIDS • A Signing Number & Date (SND) is allocated to the completed transaction • The SND is advised to the broker in the IPCBSM (and DL5089) • De-linked signings are loaded onto a suspense database • The broker releases de-linked signings for settlement, using the XIS on-line trigger or by submitting a RESETT message • The APD is advised to the broker in the BSM • Highlights the difference to the current A&S process

13. ELPAN2 Release 1 XIS technician keys LPAN data into POSH/LIDS Tech Ac Validate TAs and create LPAN records LPANs L3 Ack POSH/LIDS • Points to note: • This is a production service (running since December last year) • It is on architecture designed to scale and uses our existing gateway (less setup for Brokers) • There is a full message specification for the Technical Accounts and supporting rollout documents • This specification will not change as we move forwards with auto-loading • We will closely assist the initial Brokers to roll out to the service

14. ELPAN2 Release 2 – Q1 2009 • The Broker submits TAs at the non-fundamental level • An XIS application validates TAs and returns a Level 3 Acknowledgement • An XIS application creates LPANs and Work Orders, which are loaded onto the Market Repository • LPAN data is loaded into POSH & LIDS • An XIS Workflow entry is created • XIS technicians supplement the data in POSH & LIDS • A Signing Number & Date (SND) is allocated to the completed transaction • The SND is advised to the broker in the IPCBSM (and DL5089) • De-linked signings are loaded onto a suspense database • The broker releases de-linked signings for settlement, using the XIS on-line trigger or by submitting a RESETT message • The APD is advised to the broker in the BSM • Highlights the difference to the current ELPAN2 process

15. ELPAN2 Release 2 XIS technician supplements LPAN data in POSH/LIDS Tech Ac Validate TAs and create LPAN records LPANs L3 Ack Load LPAN data to POSH & LIDS POSH/LIDS • Points to note: • This is an approved XIS project that is currently being mobilised and planned in detail • All key fields available in the TA will be loaded (e.g. amounts, references) • Broker will need to make no system changes but will immediately see the benefits of improved data quality

16. ELPAN2 Release 3 – Q2 and Q4 2009 • The Broker submits TAs at the non-fundamental level • An XIS application validates TAs and returns a Level 3 Acknowledgement • An XIS application creates LPANs and Work Orders, which are loaded onto the Market Repository • LPAN data is loaded into POSH & LIDS • An XIS Workflow entry is created • XIS technicians supplement the data in POSH & LIDS • A Signing Number & Date (SND) is allocated to the completed transaction and the SND is advised to the broker in the IPCBSM (and DL5089) • De-linked signings are loaded onto a suspense database • The broker releases de-linked signings for settlement, by submitting Financial Account messages (or continues with using the XIS on-line trigger or by submitting a RESETT message) • The APD is advised to the broker in a Level 3 Acknowledgement to the FA • Highlights the difference to the ELPAN2 Release 2 process

17. ELPAN2 Release 3 – Q2 and Q4 2009 Validate TAs and create LPAN records LPANs Tech Ac XIS technician supplements LPAN data in POSH/LIDS Load LPAN data to POSH & LIDS L3 Ack POSH/LIDS There are two sub-projects to allow Financial Account processing: • Company – Q2 2009 • Lloyd’s – Q4 2009 Validate FAs and release de-linked signings De-linking trigger FinancialAc L3 Ack APD

18. eAccounts – The vision as of the end of 2009 • The Broker submits TAs at the fundamental level • An XIS application validates TAs and returns a Level 3 Acknowledgement • An XIS application creates LPANs and Work Orders, which are loaded onto the Market Repository • LPAN data is loaded into a fundamental LPAN database • An XIS Workflow entry is created • XIS technicians enter the criteria to define non-fundamental splits • Split LPANs are generated and loaded into POSH & LIDS • The SND is advised to the broker in the IPCBSM (and DL5089) at fundamental level • De-linked signings are loaded onto a suspense database • The broker releases de-linked signings for settlement, by submitting Financial Account messages (at fundamental level) • The APD is advised to the broker in a Level 3 Acknowledgement to the FA • Highlights the difference to the ELPAN2 Release 3 process

19. eAccounts – The vision as of the end of 2009 Validate TAs and create LPAN records Load LPAN data to a fundamental LPAN database XIS technician enters criteria to define any splits Tech Ac LPANs L3 Ack Create split LPANs and load to POSH/LIDS POSH/LIDS Validate FAs and release de-linked signings De-linking trigger FinancialAc L3 Ack APD