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Accounting & Settlement A Year of Progress & Improvement March 2009

Accounting & Settlement A Year of Progress & Improvement March 2009. Rob Myers Production Director, UK Insurance. Agenda. Key facts Improvements are evident It’s a journey, not a destination 2009 Focus areas. 1. The “Bureau” Service Level was 10 Days to Process ….

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Accounting & Settlement A Year of Progress & Improvement March 2009

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  1. Accounting & Settlement A Year of Progress & ImprovementMarch 2009 Rob Myers Production Director, UK Insurance

  2. Agenda Key facts Improvements are evident It’s a journey, not a destination 2009 Focus areas 1

  3. The “Bureau” Service Level was 10 Days to Process …. …. and Terms of Credit were 90+ days …..how things have changed ! Do you remember when….. Central Settlement 0ccurred 0nly once a month …… ….. in only 3 currencies £ US$ Can$

  4. 885,739 Premium transactions processed in 2008 85% Of all premium submissions delivered electronically A&S - where are we now? 14 1 Different Daily Settlement Currencies £43,661,166,907 The sum of all premium & claim accounting transactions processed in 2008 £24,289,975, 306 1 in 3 The sum of all premium accounting transactions processed in 2008 Company customers domiciled outside UK Lloyd’s & Company Market processing …..in a much better place and still moving forward

  5. Underwriters want their premiums faster ….. • “It is estimated that the investment income for each day that premium is received earlier, amounts to approximately £600k for the Lloyd’s market.” • Source: Premium Payment Improvement Working Group Report, July 2008 …. but falling interest rates reduce this prize & change the game …..Xchanging has delivered part of the answer …..Xchanging has delivered part of the answer

  6. Underwriters want their premiums faster ….. • Transactions are being processed quicker • Consistently <3 days to process query free work over past 3 months • Signed Lines and Technical Accounts are being notified quicker • 50% of Stage 1 signings notified within 30 days of inception in January • Triage of premium submissions is in place • 90% of High Value Premium (LPAN >£500k) processed same or next day in January • Premiums are being paid to underwriters faster • 43% of value settled in January was paid on/before SDD (28% avg. in 2008)Source: JMD SIS ….so more emphasis on improved cash flow, reduced credit risk & release of working capital Lloyd’s processing …..Xchanging has delivered part of the answer

  7. Funds movement still relies on broker committing to make payment …..Xchanging has delivered part of the answer Premium Processing in January & February 2009 £3.50bn £2.53bn 10% more Production 38% more Value Lloyd’s processing

  8. Premium Processing in January & February 2008 Lloyd’s processing 2008: one week to process 75% of all transactions

  9. Premium Processing in January & February 2008 Lloyd’s processing No prioritisation; Value profile matched Volume profile

  10. Premium Processing in January & February 2009 Half the time Lloyd’s processing Faster…. 40% of volume in half the time

  11. Twice the Value 5 Days Faster Prioritisation of High Value and Non-Delinked self evident Premium Processing in January & February 2009 Lloyd’s processing

  12. How has the IMR helped? Electronic Paper • BUT……. more queries being raised on electronic submissions • Regular A&S Production Forums to communicate common submission issues • 2009 focus on driving down query / rejection rates 1-2 days faster Elapsed Working Days Week Commencing Lloyd’s processing Electronic Submissions are being processed 1-2 days faster than Paper

  13. More transparency than ever https://insuranceportal.xchanging.com Lloyd’s & Company Market processing Online Service Status updated daily

  14. What a difference a year makes ….. • XIS processing time improved by 35% (or 1.5 work-days) • 2.8 in 2009; 4.3 in 2008 (weeks 1-9, query free submissions) • High Value Premium prioritised & processed within 2 days • Significant value for the Market from investment in electronic processing and global balancing of resources • Xchanging operating 18 hours a day; vans have been “crushed”; service is faster • Underwriters in receipt of exposure and technical accounting information much earlier • 50% of premiums notified within 30 days of inception during January • A 50% improvement in premium payment by Settlement Due Date • 28% average for 2008; 42% achieved in January 2009 Lloyd’s processing ….. Market Reform is working !

  15. Focus areas for 2009 ….. • Improve submission query process • Redefine what customers should expect • Target specific brokers … in order to drive greater consistency and reduce rework • Address functionality gaps in IMR • Access Control solution … in order to drive A&S IMR usage to 100% • e-Accounts • Implement ACORD messaging …to automate further process steps, increase data accuracy and reduce rework • Implement Accounting Splits Service …to make London more attractive to brokers and reduce rework ….. Market Reform is working !

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