LLOYDS INITATIVES IN CLAIMS HANDLING

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LLOYDS INITATIVES IN CLAIMS HANDLING

• International Federation of Adjusting
  Associations
• Annual Conference, London Market, 30 April 2009
• Global Best Practice for Loss Adjusting
• Kent Chaplin
• Head of Claims
• Lloyds

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Agenda

• 2008 results
• Lloyds profile
• Why claims?
• Claims Best Practise
• Experts!
• Future claims strategy
• In closing

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Lloyds 2008 Results
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2008 Highlights

• Resilience in testing times
• Market discipline maintained - strong risk
  management and effective oversight
• Solid financial position with strongest ever
  Central Fund
• Global reach extended and strengthened
• Business initiatives continuously improved
• Lloyds Act updated
• Market ratings affirmed

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Strong results in challenging economic conditions
Source Lloyds pro forma financial statements,
Dec 2008
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Lloyds profile
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Market profile
Class of business split
Geographical split
Source Lloyds 2008 Annual Report
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Lloyds vision building the platform of choice
To be the platform of choice for insurance and
reinsurance buyers and sellers to access and
trade both specialist and large property and
casualty risks

• Lloyds produces a rolling Three-Year Plan, which
  sets out
• a package of benefits for an underwriting
  business operating at Lloyds
• how we maintain and develop an attractive trading
  platform for brokers and clients
• the objectives that we need to meet in order to
  deliver the benefits and achieve our vision

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Lloyds five key operating benefits
Our vision is being delivered through the five
principle benefits of operating in the Lloyds
market
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Why claims?
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The value of claims

Effective claims management is at the heart of
Lloyds
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The changing environment is placing greater
pressure on claims
Increased government intervention
Broker requirements business models
Claims Management

Liquidity claims Sub prime/ FINC
Natural catastrophes Ike/ California fires/ UK
floods
Increased claims frequency type
Policyholder expectation performance indices
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Increasing claims frequency

• Softer underwriting environment
• Economic downturn
• Potential for a perfect storm of claims

Source XCS, as at 31/12/08
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CATs and Major Losses

• Lloyds is a CAT exposed market, particularly to
  US windstorm losses
• Managing the underwriting is key, but so is
  managing the outcome in the event of major events
• Lloyds priorities in the even of a major or CAT
  loss are to
• Ensure that the claims response is prompt and
  fair
• Understand the potential exposure as soon as
  possible

Source XCS, as at 31/12/08
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Claims best practise
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What does claims performance mean?

• Delivering our core customer promise to pay valid
  claims promptly
• Protecting the New Central Fund, Lloyds brand,
  international licences
• Disciplined cycle management
• Contributing to business growth by attracting new
  customers
• Admission to new territories/ classes of business
• Benchmarked against global competition

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The Performance Framework

• An enforceable performance framework
• Managing Agents free to choose how to demonstrate
  position against Standards
• Evaluation by experienced claims account managers
  underpinned by commercial common sense
• Remedial action shaped by materiality of the risk
• Lloyds Claims team customer focus - flexibility
  and commerciality

Raising the bar across the market
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Claims Management Principles

• Claims culture embedded claims philosophy from
  top to bottom
• Training development appropriate skills
  resources
• Proactive processes efficient, timely case
  handling
• Documentation appropriate audit trail
• Reserving consistent, timely, accurate
• Expert management disciplined procurement,
  proactive management
• Performance measurement appropriate, regular
• Information sharing effective co-operative
  market claims agreement process

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Lloyds FPD Claims technical services

• Lloyds FPD Claims team roles
• Effective leadership of major losses
• Managing key stakeholder relationships
• Generating informed and positive media coverage
• Creating claims handling infrastructures for
  overseas platforms
• Resolving market disputes

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Electronic Claim Files

• ECF has created far better visibility around
  claims processing and payment
• Not yet the end game, but a significant
  improvement

Source XCS, as at 31/03/09
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Managing Our experts you!
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Expert Services

• Lloyds market expert spend exceeded GBP600m in
  2008
• Ensuring appropriate value is obtained from this
  spend is one of the highest priorities for the
  Lloyds market
• Managing agents are increasingly
• specifying services required, including service
  standards
• monitoring services provided
• insisting on proportionate and competitive price
  of services

Source XCS, as at 31/12/08
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Our Expectations of Experts

• Highest standards of customer service
• Protection of Lloyds global brand
• Clear resolution strategy
• Prompt and accurate reserves and budgets
• Efficiency
• Value for money
• Understanding the service

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Future claims strategy
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Vision for future claims handling
Build on Lloyds reputation for fast and fair
claims handling, establishing claims as the
markets competitive advantage on a par with
underwriting
Lloyds competitive advantage
Excellence in underwriting
Excellence in claims

• Claims on a par with underwriting
• Competitive advantage, not back-office
• Competence of practitioners
• Lloyds reputation for fast and fair claims
  handling

• Supported by
• Excellence in operations
• Capital advantages
• Security and strong market ratings
• Global brand

Vision for claims within Lloyds market
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In closing
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In closing

• Lloyds performance framework is delivering
  positive change
• Market is performing well vs. claims minimum
  standards
• Infrastructure is supporting a world class claims
  platform
• Understanding this will help you better advise
  your clients
• Changes at Lloyds will affect the way you work
  with us

Work with us to ensure our reputation continues
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