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09.15 Registration & coffee 09.30 Welcome - Keith Stern, Regional Manager, UK & Ireland

09.15 Registration & coffee 09.30 Welcome - Keith Stern, Regional Manager, UK & Ireland 09.45 Lloyd’s overview - Ed Pennock, Manager, Market Development, International Markets 10.45 Coffee Break 11.00 Tour of Lloyd’s and surveys

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09.15 Registration & coffee 09.30 Welcome - Keith Stern, Regional Manager, UK & Ireland

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  1. 09.15 Registration & coffee 09.30 Welcome - Keith Stern, Regional Manager, UK & Ireland 09.45 Lloyd’s overview - Ed Pennock, Manager, Market Development, International Markets 10.45 Coffee Break 11.00 Tour of Lloyd’s and surveys 12.00 Accessing the Lloyd’s market – Broker Registration - Alan Taylor, Relationship Manager, Brokers, Relationship Management 12.45 Meet the CEO of Lloyd’s - Richard Ward 13.00 Networking lunch with the Lloyd’s Market 14.30 Accessing the Lloyd’s Market – Coverholder Registration - Peter Montanaro, Head, Delegated Authorities 15.15 Claims handling at Lloyd’s - Philip Godwin, Senior Claims Manager, Claims 15.45 Wrap-up and next steps - Keith Stern, Regional Manager, UK & Ireland

  2. Welcome & Introductionkeith stern, regional manager, UK & Ireland

  3. 2008 – 2010 Lloyd’s Total GSP vs Lloyd’s UK GSP (in £ m)(Gross Signed Premiums on a Calendar year basis excluding reinsurance and brokerage commissions) £ 16,693m £ 20,347m £ 20,701m Lloyd’s (excl. UK) Growth 08/09 24.1% Lloyd’s (excl. UK) Growth 09/10 0.8% 17,198 13,736 17,053 2008 Lloyd’s UK share 18% 2009 Lloyd’s UK share 16% 2010 Lloyd’s UK share 17% Lloyd’s UK Growth 09/10 6.4% Lloyd’s UK Growth 08/09 11.4% 3,504 2,957 3,294 2009 2010 2008 Total (excl. UK) UK Source: Market Intelligence calculations based on Xchanging REG 258 as of 31/12/09. Health Warning: These figures differ from Annual Report due to: (1) the timing differences between written and signed gross premiums, (2) inconsistent use of rates of exchange between Syndicates and Xchanging, (3) Syndicates allocating Facultative business as Direct and (4) some premiums from coverholders and service companies premiums not being processed via Xchanging.

  4. 2010 Lloyd’s UK Business Profile(Gross Signed Premiums on a Calendar year basis excluding reinsurance and brokerage commissions) Type of business Method of Placement 5% Direct £ 1.94bn 26% Reinsurance £ 1.56bn 55% 14% Lloyd’s Classes of Business Direct Facultative Non-prop Treaty Treaty Distribution Channel 32% (58%, direct) 68% Coverholders Brokers Source: Market Intelligence calculations based on Xchanging REG 258 as of 31/12/09. Health Warning: These figures differ from Annual Report due to: (1) the timing differences between written and signed gross premiums, (2) inconsistent use of rates of exchange between Syndicates and Xchanging, (3) Syndicates allocating Facultative business as Direct and (4) some premiums from coverholders and service companies premiums not being processed via Xchanging.

  5. 2010 Survey: Broker top ten countries to develop businessUK, Brazil and France are the territories that brokers would most like to develop business with Lloyd’s next year. Remaining Countries *Brokers could rank up to 5 territories, scored as below for comparison. N.B. Not all of the Brokers responded. Scoring mechanism1st choices given 5 points 2nd choices – 4 points 3rd choices – 3 points 4th choices – 2 points 5th choices – 1 point

  6. 2010 Survey: Managing Agent top ten countries to develop businessSingapore, Australia and the UK are the territories that managing agents would most like to develop business with Lloyd’s next year. Remaining Countries *Agents could rank up to 5 territories, scored as below for comparison Scoring mechanism1st choices given 5 points 2nd choices – 4 points 3rd choices – 3 points 4th choices – 2 points 5th choices – 1 point

  7. 2010 Survey: Broker distribution interests – Northern EuropeHighest interest for coverholder development in the UK and Sweden. Northern Europe

  8. 2010 Survey: Managing Agent distribution interests – Northern EuropeHighest interest for coverholder development in the UK and Norway and for service company development in the UK and Switzerland. Northern Europe

  9. Access to Lloyd’s for UK/EU BrokersThis roadmap is for local Brokers who are seeking access to the Lloyd’s Market for a local client Via Local Service Company Become a Lloyd’s registered broker - approval via Lloyd’s Broker Approval Process Become a managing agent approved broker Become a non Lloyd’s Registered Broker - approval via individual Managing Agent registration process (direct contact) Become a coverholder In countries with established licence – approval via Delegated Authority Approval Process (contact Managing Agent and Lloyd’s Broker) Via Eu Coverholder (crossborder) local Broker / Agent with binding authority, Underwriting Agency Via Eu Service Company (crossborder) Via Lloyd’s Broker Via Local Coverholder local Broker / Agent with binding authority, Underwriting Agency Contact local Country Manager> www.lloyds.com/officesAccess Service Company details in the Coverholder Directory> www.lloyds.com/directories/coverholders Contact local Country Manager>www.lloyds.com/officesAccess Service Company details in the Coverholder Directory> www.lloyds.com/directories/coverholders Contact local Country Manager> www.lloyds.com/offices Access the Coverholder Directory> www.lloyds.com/directories/coverholders Contact local Country Manager> www.lloyds.com/officesAccess Directory of Lloyd’s Registered Brokers www.lloyds.com/directories/brokers Contact local Country Manager> www.lloyds.com/offices Access information on becoming a Lloyd’s Registered Broker> www.lloyds.com/brokerregistration Contact local Country Manager> www.lloyds.com/offices Access information on Managing Agents – non Lloyd’s Brokers> www.lloyds.com/nonlloydsbrokers Contact local Country Manager> www.lloyds.com/officesAccess the Coverholder Directory> www.lloyds.com/directories/coverholders Contact local Country Manager> www.lloyds.com/officesAccess information for prospective Coverholders> www.lloyds.com/coverholders Lloyd’s Managing Agent Lloyd’s Managing Agent Lloyd’s Managing Agent Lloyd’s Managing Agent – usually via a Lloyd’s Broker Lloyd’s Managing Agent – usually via a Lloyd’s Broker Lloyd’s Managing Agent Lloyd’s Managing Agent – usually via a Lloyd’s Broker Lloyd’s Managing Agent Syndicate(s) Syndicate(s) Syndicate(s) Syndicate(s) Syndicate(s) Syndicate(s) Syndicate(s) Syndicate(s) How to access this channel Placement Risk Carrier

  10. Lloyd’s overviewed pennock, international markets

  11. Lloyd’s - key characteristics • Unlike most other insurance brands, Lloyd’s is not a company, it’s a market where our members join together as syndicates to insure and reinsure risk • We have a long history of risk taking, responding to change and customer demands • The Lloyd’s market insures complex and specialist risks – from oil rigs to celebrity body parts to major airlines • Lloyd’s underwriters devise tailored innovative solutions for complex problems • Lloyd’s appetite for risk is guided by long experience and encouraging responsible risk taking

  12. … to every type of insurance and challenges… 1906 1911 1887 1969

  13. EXXON VALDEZ 1989 HURRICANES 1989 ASBESTOS 1980s- 1990s PIPER ALPHA 1988

  14. From Reconstruction… to renewal • A plan was devised with the Government to ring fence pre-1992 liabilities and assets and put them into Equitas • Lloyd’s managed to survive but it still didn’t understand the risks the market was involved in taking on. • There was a lack of standards and poor management. • Corporate members were introduced

  15. Some Specialist insurance coverage provided at Lloyd’s

  16. The leading specialist insurance market Lloyd’s provides insurance for the majority of the world’s largest companies. 93% of Dow Jones Industrial Average companies 92% of FTSE 100 companies 86% of Fortune Top 50 European companies 81% of Fortune 500 US companies Top 7 pharmaceutical companies Top 20 banks Lloyd’s has global reach and local depth providing business with insurance and reinsurance solutions in over 200 territories.

  17. Lloyd’s Market Structure

  18. 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

  19. A dynamic and diverse market As at 1 January 2011, the Lloyd’s market was home to 54 managing agents that manage 82 live syndicates. Source: Lloyd’s Annual Report 2010

  20. Lloyd’s 2010 financial results

  21. Solid result in challenging circumstances… Source: Lloyd’s pro forma financial statements, 31 Dec 2010

  22. …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)

  23. Lloyd’s Chain of security Lloyd’s unique capital structure, often referred to as the ‘Chain of Security’, provides excellent financial security to policyholders and capital efficiency to members. The Corporation is responsible for setting both member and central capital to achieve a level of capitalisation that is robust and allows members the potential to earn superior returns. Source: Lloyd’s Annual Report 2010

  24. Ratings Three of the world’s leading insurance rating agencies recognise Lloyd’s strengths and robust capitalisation and the financial strength of the market. In 2010, all three rating agencies reaffirmed our ratings. The Lloyd’s financial strength ratings apply to every policy issued by every syndicate at Lloyd’s since 1993. A+ Fitch Ratings A+ (strong) Standard & Poor’s A+ (strong) A A.M. Best A (excellent)

  25. Lloyd’s International network

  26. Business Profile Class of business split Geographical split ROW 4% Central Asia & Asia Pacific 10% US & Canada 43% Europe 16% UK 20% Other Americas 7% Source: Lloyd’s Annual Report 2010

  27. Office Network 1 4 3 4 1 3 3 3 1 3 4 1 3 3 3 3 1 3 1 1 2 2 3 3 1 1 2 2 Type Market Development Scope Territories China Local underwriting with co-located Syndicates (or via a Lloyd’s regulated entity); Country Manager with Market Development Role 4 Japan Singapore Benelux, France, Germany, Ireland, Italy, Poland,Spain, Sweden, Switzerland, UK Australia, Hong Kong (SAR) 3 Country Manager with Market Development Role Brazil South Africa Cyprus, Greece, Israel, Malta Country Representative for regulatory requirements 2 New Zealand Austria, Denmark, Norway, Portugal Country Representative for minimum regulatory requirements 1 Argentina, Belize, Chile Namibia, Zimbabwe Europe North America Europe www.lloyds.com/AMERICA 3 2

  28. Lloyd’s why lloyd’s

  29. Why Lloyd’s Lloyd’s remains in a strong position…. • 320+ year history of paying valid claims • Innovation and underwriting expertise remains a priority • Financial strength • Strong Financial Results (2008 - £1,899m 2009 - £3,868m 2010 - £2,195m) • Lloyd’s Central Fund (Central Assets - £2,377m) • Ratings reaffirmed in 2010 (A+ Standard and Poor’s & Fitch and A with A M Best) • Robust performance management framework minimizes risk to the Central Fund. • Global network of licenses • Ongoing effort to improve access via approved intermediaries

  30. Accessing the market – Broker registrationalan taylormanager, broker relationship management

  31. Agenda • Direct access for brokers • Registered Brokers • The current registration regime • The minimum standards • The registration process

  32. Direct access for brokers • Variety of access routes to Lloyd’s for brokers • Coverholder, service company, wholesale broker and direct • For direct access to managing agents brokers have two routes, become either; • Lloyd’s Registered Broker • Central registration process, providing access to all managing agents subject to Terms of Business Agreements (ToBAs) • Managing Agent Approved Broker (Non-Lloyd’s Registered Broker) • Individual managing agent registration process, providing access only to this managing agent • To do business with another managing agent broker must register again with the second managing agent For both routes the minimum standards are the same

  33. Registered BrokerThe current registration regime • FSA assumed regulatory responsibility for brokers January 2005 • Lloyd’s role in respect of brokers needed to be redefined • Lloyd’s key responsibilities • Prudential • Protecting the brand and reputation of the market • Commercial • Increase the flow of business into the market • Ensure broker can process business at Lloyd’s

  34. Registered BrokerThe minimum standards - 1 • Appropriate regulatory approval • FSA, or relevant authority in EU member state, or outside EU equivalent overseas regulatory authority • Evidential – FSA approval letter • Segregated client money accounts • Evidential – letter of confirmation from bank • Enhanced PI coverage • FSA requires €1m per single claim and in the aggregate the higher of €1.5m or 10% of annual income up to £30m • Lloyd’s requires a minimum limit of £3m or 4 times the annual net retained brokerage

  35. Registered BrokerThe minimum standards - 2 • Terms of Business Agreement (ToBA) • What is the appetite of the market? • Minimum of one ToBA, preferably several • Adequate systems / procedures for processing business at Lloyd’s • Business is processed centrally on behalf of all Lloyd’s syndicates by Xchanging • Xchanging assess broker capability • Technical manual is produced by broker • Proving knowledge & understanding • Testing and training • Appropriate and functioning software & competent people

  36. The registration process • Pre-application meeting • Crucial part of the process • is becoming a Lloyd’s Broker right for your business? • Provides you with the chance to find out more about what you need to do • Formal application • Xchanging and managing agent confirmations • Average application time is 4 months • Much depends on the appetite of the applicant to get through the process

  37. The registration process • 22 new Lloyd’s Registered Brokers in 2009/10 – 32 applications • 2011 - 3 successful applications, 5 applications in process • UK regional applicants • 2009/11 – 9 • A good application? • Good business plan • Already initiated relationship(s) with managing agent(s) • Clear understanding of how the firm will handle central processing • Appetite to get through the process in good time

  38. www.lloyds.com/The-Market/I-am-a/Broker-Agent/How-to-become-a-Lloyds-Registered-Brokerwww.lloyds.com/The-Market/I-am-a/Broker-Agent/How-to-become-a-Lloyds-Registered-Broker

  39. Lloyd’s uk broker programmeRichard Ward, CEO

  40. lloyd’s delegated authority businesspeter montanaro, head of delegated authorities

  41. Agenda • Types of coverholder • Numbers • Oversight • Strategy • Application Process

  42. Types of coverholder • Approved Lloyd’s coverholder • Full authority • Pre-determined rates • Prior submit • Restricted coverholder • Service company

  43. Delegated Authority - dimensions • Premium to Lloyd’s approx £5.5bn in 2010. • Approved coverholders 2,223 • Registered binding authorities 6,457 • Restricted coverholders approx 2,500 • Service companies 272

  44. Delegated Authority Standards • The Managing Agent has a clear strategy for writing and managing delegated underwriting as part of its overall business plan • The Managing Agent carries out thorough due diligence of coverholders to which it proposes to delegate authority • The Managing Agent ensures that it has binding authorities in place with each coverholder to which it delegates authority clearly defining the conditions, scope and limits of that authority and which comply with Contract Certainty requirements, including the requirement to demonstrate regularly that insurance documents have been issued within required timescales • The Managing Agent proactively manages delegated underwriting contracts once incepted to ensure compliance with contract conditions

  45. Oversight of Lloyd’s DA Business • Code of Practice • Service Company Code of Practice • Coverholder handbook • Lloyds.com • Crystal • Lloyd’s service standards • Lloyd’s code of conduct • Committees (DUC, BOLT, BACG, LMA-Compliance)

  46. Key Issues • Delegation/Sub-delegation • Trust Accounts • Financial Crime • AML • Sanctions • Bribery • Solvency 2

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