Best Practice Workflows in the E&S Industry & the Critical Role that Standards Play

1. Best Practice Workflows in the E&S Industry & the Critical Role that Standards Play A session for retail agents, GAs, wholesalers & E&S & specialty carriers April 30, 2013 The session will start shortly!

2. Best Practice Workflows in the E&S Industry & the Critical Role that Standards Play A session for retail agents, GAs, wholesalers & E&S & specialty carriers April 30, 2013

3. Presenters Lisa Parry Becker, Parry Insurance Tate Tooley, Bloss & Dillard Scott Good, Scottsdale Insurance Company Rebecca Korndorffer, Myron Steves Tammie Miller, Risk Placement Services (RPS) Scott Montney, Cochrane & Co. Jeff Yates, ACT (host)

4. Today’s Agenda • Overview about the E&S Joint Working Group -- Jeff Yates, ACT Executive Director • Workflow Improvements • Lisa Parry Becker, William B. Parry & Son (RA) • Tate Tooley, Bloss and Dillard (MGA) • Rebecca Korndorffer, Myron Steves (MGA)

5. Today’s Agenda • Real Time: Carrier Sub-Group Update • Scott Good, Scottsdale Insurance Company • Real Time in Production • Scott Montney, Cochrane & Company • Real Time: Lloyds Sub-Group Update • Tammie Miller, Risk Placement Services • What’s Next?

6. Housekeeping Items Submit written questions via Question & Answer Box or Raise your hand You will receive a follow up email, giving you the chance to email presenters with unanswered questions Recording of session will be posted on http://esjwg.org/ Please join the E&S Joint Working Group & help us advance these workflow improvements

7. E&S JWG Sponsors Cal DurlandACORD Director of Member Relations CJ Ketterer/Scott Montney Technology Committee Co-Chairs Jeff Yates ACT Executive Director Mike Ardis Director of Communication & Technology

8. E&S JWG Constituency MGA/Wholesalers E&S Carriers Retail Agents Vendors

9. E&S JWG Mission Further the standards-based electronic exchange of information in the E&S market

10. E&S JWG Organization • Co-Chairs • Angelyn Treutel, SouthGroup Insurance • Mike Roy, Risk Placement Services • SubGroups • Carrier • Scott Good, Scottsdale Insurance • Retail Agent/General Agent (RA/GA) • Lisa Parry Becker, William B. Parry & Son • Tate Tooley, Bloss & Dillard • Lloyd’s • Tammie Miller, Risk Placement Services • Sarah Thacker, Lloyd’s

11. E&S Joint Working Group Importance of Real Time and Download Drives our daily workflows (communications log) and provides consistency Provides accuracy of data and workflows within our systems Eliminates redundant and disconnected workflows Provides round trip of data back into our system Reduces processing backlog Saves time and moneyoperational efficiency Redirects staff time for service and selling Effective use of download enables proper formatting and implementation for real time transactions

12. RA/GA Subgroup: Workflow Improvements • Enhance communication • Implement TLS secure email • Self-administration tool for retail agents • Generic emails: personal@abcagency, commercial@abcagency.com, certificates@abcagency • Accept ACORD apps • Limit supplemental and requests for non-standard data • Add pop-ups on MGA website when additional information needed • Eliminate redundant data entry

13. Secure Email using TLS • Email islike an open postcard • PI often contained on CL applications • TLS or “Transport Layer Security” industry recommended solution • Needs to be turned on & “key” obtained from trusted certificate authority • Partner with carriers and large clients • Proprietary secure email solutions • Real Time is secure • See “Security & Privacy” page on ACT website for TLS info

14. How Does TLS Work? • At transmission time, TLS creates an encrypted communication session between email servers • The email is then sent through a protected “tunnel” • The servers de-crypt the message and send it along to the client

15. How Does TLS Work? Encrypted Agency Partner Carrier Client Client

16. Benefits of TLS • Provides the confidentiality of emails across the Internet • Requires no changes to the client (desktop) • Is a standards-based protocol that is implemented on most email gateways and appliances • It’s free, no additional licensing is needed. Security certificate is required. • Most agencies that have an up-to-date in-house mail server are TLS capable and there are numerous online options. • Required mode & opportunistic mode; carrier issues

17. RA/GA Subgroup: Workflow Improvements • Self-administration tools • Tracking status within the website • Quote submissions, renewal process, endorsement • Access to claim status • Renewal questionnaires

19. RA/GA Subgroup: Workflow Improvements • Renewal Questionnaires and Messaging • 90 Days in Advance is Preferable • The above account is set up to automatically renew this year. You do not need to complete a renewal application. The policy will be issued about 20 days prior to the effective date. Please note this account may receive a pricing increase due to changes in underwriting guidelines. • We want to offer you the best possible terms, conditions and pricing available in the marketplace. To do that, we need a completed ACORD application. If a supplemental application is needed, we will forward it to you.

20. RA/GA Subgroup: Workflow Improvements • Enhance communication • Send initial quotes to requestor • Renewals, underwriting, endorsements to generic email • Send full set of quote documents • Quote, bind request, finance agreement, s/l affidavits, terrorism) • Send indexed policy document pdfs (new, renewal, endorsements) to generic email

21. RA/GA Subgroup: Workflow Improvements • Index Suggestions: • Table of Contents • Line of Business sections • Declarations pages • Forms and exclusions • Interline forms and exclusions • Signature pages • Additional interests

22. RA/GA Subgroup: Workflow Improvements

25. RA/GA Subgroup: Workflow Improvements • Claims Communication • Adjuster assignment • Status updates • Claim payments • First Notice of Loss • Claims Inquiry • Claims Download, including payments

26. RA/GA Subgroup: Workflow Improvements • Future Development (12 – 24 Months): • Download • Commission statement • Policy • Claims • Real-time • Logons and complex non-expiring passwords • Inquiry transactions: billing, policy and claims • Rating • ACORD Activity Notes • Best Practices implementation guide • E-Signatures • Accounting: accept credit cards

27. RA/GA Subgroup: Workflow Improvements • Next Steps: • MGA Unique Identifiers (NPN) • ACORD standard approved November 2012 • Update management systems • User Guide • E-Signatures • ID Federation • Industry effort to move to federated, digital identities • Ongoing Forums

28. E&S Joint Working Group Real Time with E&S Carriers Scott Good

29. Purpose • What are the challenge’s that we are facing? • Exchange of data between wholesalers & carriers is difficult • No agreed upon standard • Low adoption and implementation rates • Exchange of data between wholesalers & carriers is expensive • Custom Interfaces require custom programming • How do these challenges impact us? • Quoting multiple markets is timely & expensive • Maintaining rates and forms increases error rates • Vendor & systems costs escalating

30. Call to Action • The way we’re doing business has to change. • Agree on a standard for sharing data and resist building custom data interfaces. • We must increase efficiencies, thus reduces our expenses. • With ACORD’s help – expand the existing ACORD standard so they meet customer needs. • Implement based on these standards.

31. Goals & Objectives • Further the standards-based electronic exchange of information in the E&S space. • Showcase implementations that represent what we are trying to achieve. • Create discussion and interaction amongst the relevant parties. • Introduce solutions and vendors that may be useful or adaptable to our needs. • Adapt to the input of our base to stay current and relevant.

32. Demo presented in March ‘12

33. Results of the Demo • System worked as designed: • Single XML data request and response utilized • Commercial General Liability Rates Returned • Forms information returned • Minimum premiums returned • Transactions completed in seconds (real time)

34. What is available today? • We were successful in the implementation of: • Commercial General Liability Rate Request/Response • Standard Developed • Group sign-off • ACORD incorporating into the PCS standard Fall 2012 • Approved by ACORD January 2013 (PCS 1.24) • Already in production with one carrier • GL Rating (returning fully developed premiums) • Revised the PCS standard with ACORD to including Rating • Approved by ACORD Program Working Group 2/28/2013. Final approval May 2013. • Carrier’s begin to adopt the GL Web Service Standard

35. 2013 and Beyond • Other Lines of Business • Work on the Property Rate and/or Rating Standard • E&O, D&O, Umbrella, and EPLI • Continue the close collaboration with ACORD • Educate on the new Standard to enable adoption • This begins in the Break-out session where we will walk through the ACORD Technical Specification • This is a targeted document (under 50 pages) that just highlights the E&S Standard !!! • Discuss other forms of Web Service, outside of Rates, such as: • Loss History and Claim Inquiry • Submission • Other ideas that you might have

36. E&S Joint Working Group Real Time in Production Scott Montney

38. E&S Joint Working Group Real Time with Lloyd’s Tammie Miller

39. Lloyd’s Subgroup – Rewind to early 2010 Coverholders were having to provide information on risks, premiums and claims Regulators, reinsurers and investors were asking for more and more information Syndicates were all asking for different information MGAs did not want any more systems Re-keying was commonplace at coverholders, brokers and managing agents

40. Lloyd’s Subgroup – April 2010 – Lloyd’s Vision Standard flows of information between coverholders and the Lloyd's market Data standards which can be used within and outside the Lloyd's market MGAs free to choose their systems

41. Lloyd’s Subgroup – 2013 Lloyd’s reporting standards exist for US property exposures Premiums Claims

42. Lloyd’s Subgroup – where are we now • Lloyd’s have created spreadsheet templates • To assist those manually creating monthly reports • As a guide when designing automated reports • The spreadsheets are for worldwide requirements, just select the columns you need

43. Lloyd’s Subgroup – where are we now? US MGA creates manual spreadsheets or cannot afford to change layout of reports In London new data mapping tools and systems remove the need for consistent formats Managing agents and brokers in London are investing in new systems

44. Lloyd’s Subgroup – where are we now? In London up to date binder systems are designed to receive XML as well as spreadsheets US MGA wants to use automated XML Managing agents and brokers in London are investing in new systems

45. Lloyd’s Subgroup – where are we now? Lloyd’s coverholder reporting standards can be met using ACORD XML

46. ACORD Knowledge Center Binding Authority Premium Reporting Standards 20 February 2013 www.acord.org/knowledge

47. Lloyd’s spreadsheet template • Lloyd’s has developed • Premium & Claims spreadsheet templates • Guide to using them • Content driven by regulatory reporting requirements • Data in the templates fulfills requirements for reporting back to country/state of origin

48. Overview of Enhancements • ACORD XML V1.x message design • Large market penetration in US and Canada for property and casualty reinsurance • Utilization of preexisting XML message design • Notification (Notify) – MGA/GA to carrier for activity which has occurred

49. Basis for design – Lloyd’s spreadsheet standard

50. Design Equivalent XML V1.xMessage Sets • Within AccountingSvcRq and AccountingSvcRs services • Set 1 • BindingAuthorityPremiumTransactionReportNotify • BindingAuthorityPremiumTransactionReportNotifyRs • Set 2 • BindingAuthorityClaimTransactionReportNotify • BindingAuthorityClaimTransactionReportNotifyRs