SOLUTION PROVIDERS FORUM 25 October 2006. © Lloyd’s2 Solution Providers Forum Agenda Introduction-Paul Tuvey Reform Updates-Steve Hulm Contract Certainty-Status.

SOLUTION PROVIDERSFORUM

25 October 2006

© Lloyd’sPresentation name 00 July 20052

Solution Providers Forum

Agenda

Introduction -Paul Tuvey

Reform Updates -Steve Hulm

Contract Certainty-Status

-Required data for monthly return

-Good practice for recording data

ECF and A&S Repository-Status -Adam Stafford

-Implementation roll out

-Preferred delivery method

A&S-Status -Brian Austin

-Publication of design

-Measurement update

ACORD

-Roy Laker

Future Approach to Communication

-PT and RL

Open Discussion -All

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Contract Certainty

• Market performance still ahead of target

• Work remaining in three areas:

– Quality and robustness of data

– Exception reduction

– Legacy

• Letter to all industry CEOs just gone

• 2007 plan in development

• Legacy numbers show decline in priority 2 and 3 legacy

• Priority 1 still increasing, change request to UPR still to be agreed

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Time line to conclusion of FSA challenge

FSA decision making timeline

Dec 2006 Jan 2007 Feb 2007 Mar 2007Nov 2006

14/15/11 18/229/10 18/311/2 11/37/117/1210/1226/11 4/224/1212/11 19/1115/10 3/12 25/328/1 4/3Task Name

FSA Decision Cycle

FSA firm visits

Consideration of position

Public statement

Template development

Heads of Association

CCSC

MRG

CCPB

Lloyd’s

CEOs

13/1215/11

19/10 21/1230/11

16/10 20/11 18/12

A form of publicstatement by John

Tiner 14/11/06CEIOPS Press release/press

briefing

Week of 12 DecemberHOA plus non Londonto discuss completed

draft template with FSA

8th Jan (prov) Formalsubmission of template

to FSA

25th JanuaryCEOs meeting

conclusion of FSAchallenge

Oct 2006

22/10 21/131/12 25/2

8th Jan 07Formal submission of

template to FSA

Template agreed byCCSC

Informal discussion with theFSA over template content

ID

Meetings with FSA

Public statements

Meeting where datesare still to be confirmed

24/01 22/02

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Contract Documentation Pilot

• Contract documentation pilot still running

• Broad support for the concept

• Limited volumes to date (10-20 contracts)

• Slip templates an issue plus general lack of awareness

• Work underway to raise awareness & resolve blockers

Presentation name 00 July 2005

Market ReformProgramme OfficeElectronic Claims

Insurer’s Market Repository Update

Solution Provider Forum25 October 2006

Adam StaffordLloyd’s Business Process & Change Mgt

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Electronic ClaimsAgenda

• ECF is Live

• Why do we need an ECF?

• Contractual Framework, Training and Governance

• ECF not happening in Isolation

• What are the Future Plans?

• A&S Latest – Direct Load and Email live/ DRI in MAT

• Next steps

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Electronic Claims

ECF is Live

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Electronic Claims

Implementation

– ECF went live over the weekend of 9th / 10th September

– 111 Partnerships operational (across Lloyds and IUA)

– Volumes (over 2000 total transactions processed)

– + IUA pilot started includes Global Aerospace, Liberty, Markel,

Munich Re, Swiss Re, XL, Zurich, Score, Faraday (till Dec 2006)

• Project Approach

– Big bang hasn’t worked in the past

– Partnerships decide to sign up when ready

– Early implementers – lessons learnt

– BEFIT and ECPG working closely with BP&CM to ensure project success

ECF is Live

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Electronic ClaimsECF Live Project Scope

• Partnerships

– Firms decide partnerships by class of business / trading relationships

– With Lloyd’s and IUA carriers and XCS

– MRPO is monitoring progress

• New claims and their subsequent transactions

– Existing paper based claims (legacy) to be tackled later

• System Processes and Procedures (SP&P)

– Some areas are currently excluded from scope

– February CR’s will address some of these e.g. Binders; Direct Reporting

– See SP&P for full list of areas in scope

• Base camp

– Remember Phase 5 was always meant to be ‘base camp’

– Further improvements will be made

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Electronic ClaimsPublic Commitment to 100% Target on ECF Live

Brokers

Committed to deliver new claims to Lloyd’s electronically

Aon

Benfield

Marsh

Guy Carpenter

Cooper Gay

Active support from:

Glencairn ARB

JLT Gallagher

Miller Claytons

Willis

Managing Agents

Committed to deal electronically with new claims

Amlin Brit

Faraday Hiscox

Limit Marlborough

St Paul Traveler’s Advent

SVB Wellington

Beazley Ascot

Chaucer Heritage

Beaufort Cathedral

Hardy

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Electronic ClaimsCurrent High Priority Issue

• Contractual Framework

– Needs to be signed up by all participants (ECF and A&S) who wish to use the Repository from day one (brokers and managing agents).

– Framework made up of Repository Rules and Xchanging side letter to sign. It is legally binding.

– Repository Rules cover important topics, such as:-– License to use and access documents

– Unintentional disclosure

– Authentication of users

– Governance

– Law and Jurisdiction

– Pack to be sent out later once all details are finalised - real drive to get all committed parties to sign up to side letter and rules………

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Electronic ClaimsOther Immediate Next Steps

• Repository Rules to be agreed and distributed to firms

• November Release to fix faults (minor) found in Phase 5 MAT.

• Continue to ramp up on and support new Live partnerships

• Expected delivery of signed-off Phase 6 Business Design into MAT early Q1 2007.

• Current live implementations aimed for end Feb – beginning March 2007.

• Things change and we won’t have thought of everything

• There will be more issues and enhancements

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Electronic Claims

What will the claims infrastructure in the London Market look like in 5 years?

– ECIS Group formed included representation from Brokers; LMA & IUA

– Met between March and June 2006 and drafted the ‘Green Paper’

– Green Paper provides a high level end vision (3-5 yrs) for the claims infrastructure in the London Market

– Peer to Peer ACORD messaging will be the norm

• ECIS Subgroup formed to discuss the end vision in more detail (July to October)

• This subgroup drafted A&S Claims Process Flows document (Peer to Peer claims messages)

• Describes when the different types of ACORD claim messages will be sent /received

• Highlights the implementation issues to be addressed e.g Transition/Legacy

• More detailed work will be required by the early implementers of the end vision

Claims Infrastructure Strategy

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Electronic Claims

Update on A&S Repository

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Electronic ClaimsContext - Restatement of overall A&S Objectives

• Rationalise and streamline business processes, specifically:

–Speed up premium and claims payment

–Remove reliance on paper

–Reduce errors and reconciliation by capturing richer data once

–Enable back office rationalisation

– Introduce flexibility - process the way the business requires rather than the business being driven by constraints

• Implement international standards for the communication and processing of accounting & settlement data (the ACORD XML RLC standards)

• Provide a firm base for the future

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Electronic ClaimsRepository

• Broker loads slip, LPANs and supporting documentation to repository thereby removing paper (and vans)

– Three methods:– Direct Load– Email– DRI Message

• Carriers can gain access and view and download documents

• DRI enabled repository that also enables direct loading and enquiries to:

–deliver documents to Xchanging Ins-Sure Services for checking

–deliver documents directly between brokers and carriers i.e. in support of non-bureau or P2P processes

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Electronic ClaimsRepository Benefits and Implications

• Faster turnaround times for documentation since “van time” is eliminated.

• No “van time” and speedier query resolution means signed lines available quicker

• Speedier resolution of queries will reduce the volume of rejections

• DRI functionality consistent with ECF. Brokers have options on how to connect, DRI Push, DRI Pull or Direct load (or additionally email for delivery to Xchanging for checking)

• Gives insurers access to a copy of the slip and other premium submission documentation in the repository

• Carriers can be notified as a slip is loaded on the repository thereby allowing signed lines to be communicated sooner, thus allowing speedier exposure management

• Utility function of the repository, without XIS processing, allows broker to distribute documents in a controlled manner to specified parties

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Electronic ClaimsDirect Load

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Electronic ClaimsDirect Load

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Electronic ClaimsRepository Timescales

• Project documentation signed off – on target by end of April 2006

• Build time - this is being delivered in three releases

• Release 1 – Direct Load and Email Upload

– NOW LIVE

– Around 2,300 transactions processed since the ‘go-live’ weekend of the 9/10th September.

• Release 2 – DRI Functionality

– MAT Date – Ongoing at present

– Go live Date – November 2006

• Release 3 – Utility Repository

– 1st Quarter 2007

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Electronic Claims

•Questions?

Presentation name 00 July 2005

Market ReformProgramme Office

A&S – Publication of Design and Measurement Update

Brian Austin / 25th October 2006

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Publication of A&S Strategy Design

• MRG approval to publish now received

• Business Design and supporting Technical Information with covering letter

• Context is three work streams:

– Measurement

– Insurers’ Market Repository

– End Vision

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Documentation Key Points

• Concentrates on End Vision – full implementation of electronic processing using ACORD messaging

• Deliberately bold

• Few caveats why difficult or slow to be realised

• Not prescriptive on implementation paths

• Optional implementation paths for trading partners to select

• Will influence Reform agenda for 2007, including e:placing and e:claims

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Key Issues

• Use or otherwise of “post placement” message – use of such a message will be optional for implementers of P2P framework

• Claims processing – documentation illustrates how approach to A&S and claims processing can be consistent with hubs and existing claims schemes

• Statistical and regulatory data – Lloyd’s is working with managing agents in this area

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Use of the Documentation

• Highlights process flows and message types

• Not a formal technical design – it is for each firm to produce their own

• Set against the context of the other Reforms, eg IMR LPAN, firms should:

– Assess impact on current process and evolve new ones

– Investigate message transport mechanisms

– Consider document repository interoperability and its implications

– Familiarise with referenced ACORD documentation

– Develop a clear strategy for business units and systems to improve A&S processes

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A&S Measurement Regime

• Sponsored by A&S Project Board

• Aim to create transparency of today’s paper process

• Publish XIS checks as applied today

• Capture data from XIS and analyse Market performance eg

– de-linking take up,

– quality of broker submission,

– timeliness, eg unwelcome trends (eg submit close to SDD)

• Identify quick wins and educate to improve performance as a prelude to:

– A&S implementation proper

– Use of ACORD messages

– Validation at source in broker systems

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Checks/Procedures Publication Status

• All Lloyd’s checks published except for detailed overseas checks

• Lloyd’s Tax rules published

• IUA checks readied and awaiting sign off

• IUA Tax “mat” ready for publication

• LPAN completion guide published

• Work on education material for accounting splits being prepared

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Reports Status

• First graphs and tabular data received from XIS and to be published on MRPO web site

• Regular monthly updates will be added

• Dialogue between IUA and XIS for company market reports begun

• Graphs will include:

– XIS query and rejection percentages

– source of files eg Repository, E:LPAN2 etc

– Common areas of failure

ACORD 2006.

ACORD Presentation to Solutions Providers October 2006

SLIDE 32

ACORD View of London Roadmap

SLIDE 33

ACORD View of London Roadmap

GOALS Introduce greater efficiency to London market

processes Straight-through-processing Improved data quality Increased data quantity / availability

Improve the service experience for clients Increased certainty and transparency Faster turnaround of assets and payments

Grow local and international business opportunities

Develop a scalable infrastructure capable of supporting next tier of business benefit

“Start small and grow” rather than a “Big Bang” change

SLIDE 34

ACORD View of London Roadmap

TRENDS Increased regulatory pressures nationally

(FSA, Lloyd’s franchise standards) and internationally (Sarbanes-Oxley, Spitzer)

Downwards pressure on costs, leading to outsourcing, off-shoring and consolidation

An acceptance that technology can support the business process(es)

Emergence of e-business initiatives – Placing, Accounting & Settlement and Claims

London-based firms establishing a presence in Bermuda

Increased overview and measurement of market participants’ performance in key areas of client care and efficiency

SLIDE 35

ACORD View of London Roadmap

ENABLERS A consistent international business

process Reduce “Londonisms” International data standards for

common business messages A robust, standards-based, messaging

infrastructure (AMS, DRI), scalable for future needs (AWSP, Web Services, SOA etc.)

Continuous assessment of market performance measurements

SLIDE 36

ACORD View of London Roadmap

ISSUES Achieving standardisation of processes Achieving market consensus Managing transition from pure

bureaux-based processing to a mixture of bureaux and direct processing

Nervousness in capital investment for centralised technology

Legacy systems / lack of systems Alignment of implementation priorities

SLIDE 37

ACORD View of London Roadmap

SUMMARY Improve client service Make London easy to do business with –

seamless, simple, fast & compliant Make London more cost-effective Ensure infrastructure is scalable Automate processes Ensure regulatory compliance and best-

practice are designed in from the outset Highly standardised processes and

technologies Flexible to allow for “bespoke” nature of

business

SLIDE 38

ACORD View of London RoadmapPre-placement

PlacementQuotation, Binding,

Wordings

AdministrationChecking, accounting

And settlement

Post-placementEndorsements, Renewals, Wordings, Cancellations...

Client/Cedant

Broker

Re/Insurer

Bureaux Services

Claims

Key

flo

ws

Straight through process- simpler, faster, compliant

Approach

Phased, pragmatic approach – start small and grow Market tested and approved Leveraging existing assets

Building a robust, scalable framework for the future

Key challenges

Change agents/Focal point of

change

Availability of data

Regulatory challenges,Contract certainty

Multiple distribution channelsProliferation of propietary placing solution

Reaching agreement on a single claims processPaper-based

Multiple distribution channelsQuality of service

MeasurementBetter client management

MeasurementRegulatory pressure

Business drivers: Improved efficiency

MeasurementFaster cash settlementImproved service for client

MeasurementImproved efficiency/simpler claim mgmtClient demandFranchisor claims standards

Technology- Today

Technology - Planned

Technology- Desired Future

State

CRM systemsRisk modelling tools

CRM systemsRisk modelling tools, Proprietary placing systems,Hub solutions, Document Management Systems,

Wordings database

London EDICLASS / London EDIDocument Management Systems

ACORD Placing message & GPDEnhanced Wordings Database

ACORD Technical Acct &Financial Acct messages

CLASS update

Easy access to risk and claims data for better analysis

Comprehensive ACORD Placing message

ACORD XML Technical Account &Financial Account messages

ACORD XML Claims Movement messageTechnical Account & Financial Account messages

Consistency of standards and re-use of data

Document Repositories, AMS, DRI, Web Services, SOAP, XML

SLIDE 39

ACORD’s Key Projects for London

Document Repository Interoperability Placing Implementation Guide Global Placing Document

SLIDE 40

Key Challenges

Pre-placement

Placement AdminPost-placement

Claims

Key challenges

Availability of data

Regulatory challenges,Contract certainty,Multiple distribution

channels,Proliferation of

propietary placing solutions.

Consistency of standards and re-use of data

Regulatory challenges: Sarbanes-

Oxley/Financial Reporting

SLIDE 41

Change Agents / Focal points of Change

Pre-placement

Placement AdminPost-placement

Claims

Measurement,Better client management

MeasurementRegulatory pressure

Business drivers: Improved efficiency

Measurement,Faster cash settlement,Improved service for client.

Measurement,Improved efficiency/simpler claim mgmt,Client demand,Franchisor claims standards.

SLIDE 42

Approach

Pre-placement

Placement AdminPost-placement

Claims

Phased, pragmatic approach – start small and grow Market tested and approved Leveraging existing assets

Building a robust, scalable framework for the future

SLIDE 43

Technology

Pre-placement

Placement AdminPost-placement

Claims

CRM systemsRisk modelling tools

CRM systemsRisk modelling tools, Proprietary

placing systems,Hub solutions, Document Management Systems,

Wordings database

London EDICLASS / London EDIDocument Management Systems

ACORD XMLTech Acct & Fin Acct messages

CLASS update

Comprehensive ACORD Placing message

ACORD XML Claims Movement, Tech Acct & Fin Acct messages

Document Repositories, AMS, DRI, Web Services, SOAP, XML

ACORD Placing message & GPDEnhanced Wordings Database

Easy access to risk and claims data for better analysis

ACORD XMLTech Acct & Fin Acct messages

TO

DA

YP

LA

NN

ED

DE

SIR

ED

F

UT

UR

E S

TA

TE

SLIDE 44

Projects Phasing: Placing

Phase 1 Phase 2 Phase 4Phase 3

Placing

Simple ACORD Placing

message1-way

messaging

More detailed ACORD Placing

message2-way

messaging

Comprehensive ACORD Placing message and all related business

flows (endorsements)

CommonEnd Vision

- All parties involved- All processes fully automated- ACORD RLC messages- Enables remote working but does not impose it

Endorsements, renewals, and cancellations.

SLIDE 45

Projects Phasing: Accounting & Settlement

Phase 1 Phase 2 Phase 4Phase 3 CommonEnd Vision

- All parties involved- All processes fully automated- ACORD RLC messages- Enables remote working but does not impose it

Accounting&

Settlement

Repository functionalityLondon EDI

ELPAN 2

2-way messaging,

ACORD Technical Acct

ACORD Financial Acct

“Strategic” A&S

SLIDE 46

Projects Phasing: Claims

Phase 1 Phase 2 Phase 4Phase 3

Claims

CLASS in Companies’

MarketLloyd’s Claims

AgreementLondon EDI

ECF RepositoryCLASS in

Lloyd’s and Companies’

MarketLondon EDI

Repository + ACORD Claims

Movement messageACORD

Technical Acct

CommonEnd Vision

- All parties involved- All processes fully automated- ACORD RLC messages- Enables remote working but does not impose it

SLIDE 47SLIDE 47

London office:LUC - Suite 1/33 Minster CourtMincing LaneLondon EC3R 7DD UK+44 207 617 6400

World Headquarters:Two Blue Hill Plaza3rd FloorPearl River, NY 10965 USA

+1 845 620 1700

Presentation name 00 July 2005 48

FUTURE APPROACH

TO COMMUNICATION