29 th September 2011

1. Lloyd’s and acord coverholder reporting standards 29th September 2011

2. Agenda • Why standards? • What are the standards? • Tools to help you • Changes in version 2 • ACORD and XML

3. Coverholder reporting Standards: The business problem Coverholders have to provide information on risks, premiums and claims Different syndicates asking for different info Re-keying Regulators asking for more detail How can we make it easier for coverholders?

4. Coverholder reporting Standards: the current position US Property Exposures – ACORD ER3001 Premiums Claims

5. Standards are the minimum requirements Standards state the minimum information to provide Mandatory fields must be provided in all cases Conditional fields should be provided dependent on conditions It is preferable that Management Information Fields are provided

6. Mandatory information - premiums Core risk information: Coverholder name UMR or Agreement Number Reporting period Class of business, Lloyd’s risk code or binder section Certificate reference Insured or reinsured name and country Risk inception and expiry dates or period of cover Type of insurance – direct or type of Reinsurance Location of risk country Paid premium transaction information: Transaction type, Original currency Gross premium paid this time Commission % and amount Taxes and levies, Net premium to London Settlement currency

7. Mandatory information - claims Coverholder name UMR or Agreement Number Reporting period, Class of business, Lloyd’s risk code or binder section Certificate reference Insured or reinsured name and country Risk inception and expiry dates or period of cover Location of loss country Claim reference Cause of loss, Claim status Refer to underwriter? Denial? Original currency Paid this month, previously paid, reserves and total incurred fees Paid this month, previously paid, reserves and total incurred indemnity

8. www.lloyds.com/coverholderreportingstandards

9. Introductory Leaflet

10. New User Guide

11. Recommended Templates

12. Changes in version 2 • NRRA • ELTO • IMO ship identification number • Country of registration • Wet marine • Referred to London • Medicare

13. ACORD XML for premiums and claims • Working groups in progress • Amending ACORD P&C to include fields in Lloyd’s premiums and claims standards

14. ACORD Exposure Reporting Standards

15. What are we dealing with? A changing World Climate change Terrorism Frequency and severity of natural catastrophes New, rapidly developing economies and the need for asset protection Greater insured losses Mature markets Developing markets Insurance relies on an appetite for risk Quantifying the risk through reliable Data Models

16. Quantifying Exposure – What do we need to know? What it is Where it is What it’s worth

17. Quantifying exposure – Why do we need to know? Underwriting need Reduce uncertainties / sensitivities Better event response Better understanding of risk International issue for insurers/reinsurers writing global risks (not US specific) Analytical need Better use of models Less defaulting / average assumptions Quantify & Qualify results Help meet and manage expectations Management / operational need Utilise resource more cost effectively Reduce the reformatting of spreadsheets

18. Internally, who needs exposure information?

19. Industry Value Chain – the Exposure Dataflow

20. Not so long ago… Little data supplied, if any Paper format only No database to capture schedules Exposures recorded on cards / datasheets Manually calculated exposures No consistency in data definitions Mish-mash of external codesets

21. So what changed? Technology Evolution of demands Regulation Large losses Andrew WTC Katrina Christchurch Tohoku

22. Data quality – the current environment

23. How Can Standards Help? Data standards provide the lifeblood of the industry to each player – reliable data Quality data helps to address the majority of the industry’s concerns Standards makes data management simpler and more reliable One way of sharing data with all business partners A reliable data standard allows all companies to focus on their core concerns i.e. Doing smart things with the data instead of just cleansing it

24. ACORD Exposure Reporting Standards Responding to industry-wide requirement to have an industry standard to capture and move exposure data from the primary insurance market through the insurance value without loss of data fidelity Over 60 stakeholders in the Working Group, supporting the development and implementation of the standard. Co-chaired by Lloyd’s, Swiss Re and Zurich

25. ACORD Exposure Reporting Standards Working Group has concluded Spreadsheet standards available for: Binding Authority property schedule – ER3001 Simple address level reporting – ER3002 Aggregated exposure reporting – ER3003 XML standard available for all the above as well as: Comprehensive Exposure Reporting Insurance specific codesets for: Perils Construction types Occupancy (usage) types GeoCode Match Levels (precision of LatLong coordinates)

26. Success criteria for standards... ...is not that they exist, but that they are being used Over 80% of Lloyd’s syndicates, by capacity, support the submission of delegated authority property reports in ER3001 format The three main cat modelling vendors have committed to implementing ACORD import and export functionality into their systems – AIR Worldwide, EQECAT and RMS

27. Just an underwriter’s problem? Benefits for everyone Service-levels Up ; Costs Down Benefits policyholders, brokers and insurers Standardized data leads to innovation Exposure data warehouses & data mining Integration with capital models & observe capital market opportunities Cash reserves management / regulatory reporting Post-Event Validation Faster and more accurate reporting Robust links to claim reporting Loss adjusters / TPA append claim data to exposure

29. Two Blue Hill Plaza3rd FloorPearl River, NY 10965USA+1 845 620 1700 NEW YORK OFFICE London Underwriting CentreSuite 1/33 Minster CourtMincing LaneLondon EC3R 7DDUnited Kingdom+44 (0)20 7617 6400 LONDONOFFICE Wednesday, September 24, 2008