LLOYD S Local Global Insurer

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2 < Picture to go here > LLOYD S Local Global Insurer Adrian Humphreys Managing Director - Lloyd s Australia February 2014

3 AGENDA Disneyland for brokers Can Lloyd s pay? Policies in and claims out Are Lloyd s local? Current market Australia vs London 6

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5 Lloyd s 325 years How did we get here? < Picture to go here >

6 325 Years of Lloyd s 1688: Edward Lloyd s coffee house is first mentioned in the London Gazette. It is frequented by ship owners and merchants seeking shipping news, which attracted those providing insurance for ships and cargo the underwriters

7 Lloyd s modern Market Structure CORPORATION OF LLOYD S Management Australian Broker Direct Reinsurance 191 Lloyd s Brokers Service Companies* Coverholder 54 Managing Agents 89 Syndicates Underwriting Members Agents Members Corporate Individual < Picture to go here > BUSINESS FLOW CAPITAL PROVISION Source: Lloyd s Relationship Management, January Includes 11 Special Purpose syndicates

8 Lloyd s Business > Subscription market

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11 Can Lloyd s pay? < Picture to go here >

12 LLOYD S > Chain of security Insurance is a promise to pay, understanding the security behind your policies is vital when securing your clients future.

13 Disciplined underwriting with modest rate improvements in 2012 Financial results (in USD million) Dec 2011 Dec 2012 Gross written premiums 37,563 40,500 Combined ratio 106.8% 91.1% Investment return 1,528 2,084 (Loss) / Profit before tax (800) 4,517 Return on capital (pre-tax) (2.8)% 15% Market ratings reaffirmed and apply to each policy issued by lloyd s Source: Lloyd s pro forma financial statements, 30 June 2012 Fitch Ratings A+ (strong) Standard & Poor s A+ (strong) A A.M. Best A (excellent) + A < Picture to go here >

14 Core strength > Security rating Lloyd s strengthened position is recognised by the rating agencies S&P rating actions since January Lloyd s IFS rating has been upgraded to A+, despite downgrades in the wider market Upgraded Unchanged Downgraded Negative outlook Sources: Source: AM Best, Fitch and S&P, 2009

15 Policies in & Claims out < Picture to go here >

16 Policyholder Lloyd s Business > Market Access Routes to the Lloyd s market Underwriting Agency Management Australian Broker (Direct or Re-insurance) Service Companies London Broker Acct & Settlement Xchanging 57 Insurance Companies 88 Syndicates Arch Ironshore Beazley Newline Catlin Starr Sportscover Underwriting Source: Lloyd s Australia, (2013)

17 Policyholder Lloyd s Business > Paying claims Routes to the Lloyd s market Local claims handling ECF and segmentation Australian Broker (Direct or Re-insurance) Underwriting Agency or TPA Service Companies Lloyd s Broker Acct & Settlement Xchanging Management 57 Insurance Companies 88 Syndicates Underwriting Arch Ironshore Beazley Newline Catlin Starr Sportscover Source: Lloyd s Australia, (2013)

18 LLOYD S > Claims Nine out of 10 Nat Cat and all in the last eight years Year Event US$ bn 2005 Cyclone KRW US & Gulf of Mexico Terrorism WTC US Superstorm Sandy Thailand Floods Cyclone Ike US & Gulf of Mexico Japan Earthquake & Tsunami Cyclone Rita US & Gulf of Mexico Chile Earthquake New Zealand Earthquake Cyclone Wilma US Australian floods 0.4 Source: Lloyd s Australia, (2013)

19 US major claims events > dominate 2012 LLOYD S MAJOR CLAIMS: NET ULTIMATE CLAIMS , m YEAR AVERAGE 1,436m 2,290 1,816 < Picture to go here > US Non-US Source: Lloyd s pro forma basis. Indexed to December 2012 Claims in foreign currency translated at the exchange rate prevailing at the date of loss

20 Are Lloyd s local? < Picture to go here >

21 LLOYD S Australia > key facts Lloyd s is ranked as 5th in terms of Gross Signed Premium and Australia is 3rd largest market for Lloyd s globally 2012 MARKET PLAYERS: TOP 7 General Insurers (Excluding global business; *Includes subsidiaries) 6.6* 6.8* 2012 Non Life Insurance premiums US$ 40.1bn GWP (US$ 29.8bn NWP) Others* ** **On a country of origin basis. May differ from APRA statistics. Please see Appendix for further details Lloyd s is local Licenced General Insurer Principal Strategic Partner of UAC Board member: Insurance Council of Australia Insurance Code of Practice Insurance Advisory Committee (FSL) Aon 2012 Survey (350 Companies) Lloyd s ranked: Top insurer for >$1bn revenue companies (up 7 places), takes top spot from Allianz 2 nd for mid-sized ($100m - $1bn) companies (up 4 places) 3 rd for smaller companies, (up 3 places) Source: Aon Survey and J.P. Morgan General Insurance Industry Survey (2012); APRA, (2012); Company Annual Reports, (2013); Exchange rates as per Appendix

22 Lloyd s premiums are dominated by Property and Liability classes. Accident & Health experienced the most significant % growth during 2011, more than doubling to US$ 242m LLOYD S PREMIUMS: BY CLASS Gross Signed Premiums in: million US$ Casualty 1600 PA & Health Property Treaty Property (D&F) Energy Casualty Treaty Marine Overseas Motor Aviation Source: Market Intelligence calculation on Xchanging figures. Rates of exchange calculated as per Appendix! Lloyd s data is based on Xchanging REG 258, (2010); unaudited figures based on country of origin and processing by calendar year; please refer to Appendix for detailed summary of Lloyd s Data Limitations.

23 Lloyd s > Agency Overview Australian Territorial Extensions Total GSP for U/w agencies SOURCE: Lloyd s Australia, (March 2012) SOURCE: Market Intelligence based on Gross Signed premiums; Xchanging (2012) Number of Binder by Class Aviation Casualty Energy Marine Motor PA & Health Property Grand Total SOURCE: Lloyd s, Delegated Authority, (2012) Total # of Individual U/w agencies SOURCE: Lloyd s, Delegated Authority, (2012) Lloyd s data is based on Xchanging REG 258, (2011); unaudited figures based on country of origin and processing by calendar year; please refer to Appendix for detailed summary of Lloyd s Data Limitations.

24 LLOYD S AUSTRALIA > Underwriting Agencies Number of Coverholders Number of Binders Total Number of Coverholders 304 Total Number of Binders Number of active coverholders by region 0 64 Number of active binders by region Source: Lloyd s Delegated Authority, (February 2013)

25 LLOYD S AUSTRALIA > Underwriting Agencies Lloyd s agencies and service companies you may recognise.. AFA Affinity Risk Partners Brokers AIS Insurance Brokers Altiora Insurance Solutions Aon Risk Services Arch Underwriting at Lloyd s Asia Mideast Insurance & Reins. ASR Underwriting Agencies ATC Insurance Solutions Austagencies Australian Income Protection Australian Insurance Agency Pool Australian Reinsurance U/w Svs Australis Group Underwriting Austruck Insurance Axis Underwriting Services Beazley Underwriting Bizcover Blue Sky Brooklyn Underwriting Brooks Inglis Insurance Brokers Catlin CBD Underwriting CEMAC Cerberos Brokers Cerberus Special Risks Cheap Travel Cinesure CKA Risk Solutions Columbus Direct Travel Ins. Coverforce Underwriting Coversure Dolphin Insurance Dual Australia East West Insurance Brokers Elkington Bishop Molineaux Epsilon Insurance Broking Services Fenton Green & Co FP Marine Fitton Insurance Brokers Freeman McMurrick General Security Insurance Brokers Go Unlimited Gow-Gates Insurance Brokers Guardian Underwriting Services High Street Underwriting Agency H W Wood IBL (Planned Professional Risks) Insurance Advisernet Insurance Facilitator Insure That Ironshore Australia IRS Steadfast Jardine Lloyd Thompson JMD Ross Insurance Brokers JUA Underwriting Agency Latitude Lawsons Underwriting Australasia Leisureinsure Logan Livestock Insurance Agency London Underwriting Macquarie Underwriting Magic Millions Insurance Brokers Mansions of Australia Manufactured Homes Ins Agency Marsh Millennium Underwriting Miller & Associates Ins Broking Miramar Underwriting Agency Mobius Underwriting National Underwriting Agencies Nautilus Marine Insurance Agency Newline Insurance Newmarket Insurance Brokers Nova Underwriting OAMPS Australia Online Insurance Brokers Panoptic (Midas) Pantaenius Parmia PI Direct Insurance Brokers Professional Risk U/w QBE Placement Solutions Resource Underwriting Pacific Richard Oliver Southern Cross Underwriting Suresave Transcorp Underwriting Tasman Underwriting Sterling Insurance Savannah Insurance Agency SLE Worldwide Sportscover SRS Underwriting Agency Starr Underwriting Strathearn Specialist Underwriting Agencies Trafalgar Risk Management Travel Insurance Direct Trident Insurance Group Trinity Pacific U/w Agencies Willis Windsor Income Protection Winsure Insurance Group Woodina Underwriting World Nomads Source: Market Intelligence based on: Lloyd s Delegated Authority Team 2013

26 London vs. Australia < Picture to go here >

27 Soft market + low returns Year of account Combined ratio ROE % 12% % 12% % 12% = Managing the cycle, Costs & look for growing markets

28 Lloyd s gross written premium >2012 US & Canada 41% (Total US &Canada) 41% % % 2009 Other Americas 8% 8% % % 2009 Europe (including UK) 33% Rest of the World 5% Central Asia & Asia Pacific 13% 12% % % % % 2007 < Picture to go here > 46% % % % 2007

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30 Conclusions < Picture to go here >

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32 Strategy and Regulation 32