Knowledge Area Review Commercial Insurance Innovation January 2012

Knowledge Area Review Commercial Insurance Innovation January 2012 Final Deliverable 1

Disclaimer ICG has made good faith efforts to ensure that this Knowledge Area Review (KAR) is a high-quality publication, and a reasonable interpretation of the material it purports to review. However, ICG does not warrant completeness or accuracy, and does not warrant that use of the KAR through ICG’s provisioning service will be uninterrupted or error-free, or that the results obtained will be useful or will satisfy the user's requirements. ICG does not endorse the reputations or opinions of any third party source represented in the KAR. Confidentiality Our clients’ industries are extremely competitive. The confidentiality of companies’ plans and data is obviously critical. ICG will protect the confidentiality of all such client information. Similarly, management consulting is a competitive business. We view our approaches and insights as proprietary and therefore look to our clients to protect ICG’s interests in our proposals, presentations, methodologies and analytical techniques. Under no circumstances should this material be shared with any third party without the explicit written permission of ICG. Copyright Notice While third party materials have been referenced analysed in this KAR, the content represents the original work of ICG's personnel. This work is subject to copyright. ICG is the legal copyright holder. No person may reproduce the KAR without the explicit written permission of ICG. Use of the copyright material in any other form, and in any medium whatsoever, requires the prior agreement in writing of the copyright holder. The user is allowed "fair use" of the copyright material for non-commercial, educational, instructional, and scientific purposes by authorised users. 2 © Internal Consulting Group 2015

Knowledge Area Review Components Section Component Description 1 Key messages for this KAR based on the research available 2 Structured Knowledge References All openly published consulting materials, structured by topic 3 Knowledge Components Frameworks, key insights, highlighted case studies, benchmarks 4 Additional Material Potentially useful additional items 3 © Internal Consulting Group 2015

Key messages Section 1 4 © Internal Consulting Group 2015

Key messages 1. New products are the source of the majority of innovations in commercial insurance 2. Within products, most innovations are evolutionary in the form of emerging and new risks and niches; for example cyber security, nutraceuticals, and solar power 3. Step change to innovation is occurring in three product areas: seamlessness between commercial and retail customers, increasing segment granularity, and bundling of solutions 4. In marketing, the focus is in new niches, such as a website to help charities 5. Innovations in distribution appear limited, with research pointing to channel focus, such as specialist services for agriculture 6. Innovations in underwriting are similarly limited, focussing on improvement opportunities such as a global, fact-based, property risk-quality benchmarking tool 7. Claims innovations are focussed in two areas: technology, such as the need for claims transparency and tracking; and customer value, such as claimants receiving service based on their lifetime value 8. In technology, the twin focal points are end-to-end integration along the value chain, and closer communication with customers; for example a complete underwriting guide, rating and policy administration system, and a redesigned agent portal 9. Mobility is a focus for consumers in the retail sector, with interest starting to occur in the commercial insurance sector; for example telematics, convergent apps, and self-service 5 © Internal Consulting Group 2015

Structured Knowledge References Section 2 6 © Internal Consulting Group 2015

Structured knowledge references: a selection of industry journals and websites Journal/website About Asian Insurance Review Meets the information needs of insurance practitioners in Asia in particular and the rest of the world in general. Best’s Review Magazine Best's Review, AM Best's insurance news magazine, is a leading source of information Business Insurance serves business executives who are responsible for the purchase General Insurance Code of Practice From the Australian Securities and Investment Commission Insurance Age delivers in-depth news analysis and features, interviews, round tables, Insurance and risk management terms A glossary from the International Risk Management Institute, Inc. Insurance Hound is a resource centre which provides insurance professionals with a free and easy-to-use digital library of briefings, white papers and reports that is updated on an hourly basis. Insurance News insurance. NEWS. com. au is a free national online news bulletin specifically for Australasia’s general insurance industry and the wider financial services community. for the insurance industry. View the Innovator’s Showcase. and administration of corporate insurance/self-insurance programs, encompassing both property and liability insurance and employee benefit programs, including life, health and pensions. Each week, the printed publication includes news and feature articles related to these key functions. From its Website, BI also delivers current news and information on a daily basis. all the product launches and news in the market as well as keeping readers up to date on the management skills required to run a successful business in the modern age. 7 © Internal Consulting Group 2015

Structured knowledge references: a selection of industry journals and websites Journal/website About Journal of Insurance Operations The Journal of Insurance Operations is designed to provide senior management at Leader’s Edge Magazine Leader’s Edge serves commercial property-casualty brokers and group benefits Lloyd’s Market Intelligence The Market Intelligence team provides analysis of the world’s insurance industry from a geographic perspective for the benefit of Lloyd’s Managing Agents, Brokers and Coverholders to help them develop their business internationally. Power. Place is a UK web-based full-cycle trading marketplace. It was launched in 2009 in a bid to increase efficiency by streamlining the commercial business process. View the UK product schedule. Risk and insurance acronyms A list compiled by the International Risk Management Institute, Inc. insurance companies with in-depth coverage of important innovations in the management techniques, organizational designs and enabling technologies that characterize excellent operations. consultants. View the Edge Market Flyer. 8 © Internal Consulting Group 2015

Structured knowledge references: featured in ICG Industry Insights Reviews Reference Issue date Source Relevance Insurance Tech Trends 2011: Insights for Insurers on the Natural Convergence of Business and IT July 2011 Deloitte This excellent report identifies the most important technology trends (borrowed from Deloitte’s technology group) and applies them to the insurance industry. Five Ways That Standardization Can Lead to Innovation September 2011 Monitor A thoughtful article which reminds us that innovation includes anything that is new and substantially better, whether just a proposition, or more substantively a firm’s business model or indeed a whole industry. Flipping Orthodoxies: Overcoming Insidious Obstacles to Innovation September 2011 Monitor Six pages of why it can make great sense to challenge both internal and external orthodoxies (entrenched wisdom and biases). Daring to be Different October 2011 PWC This is a short follow-up article (see September Insurance 2011) on the outlook and strategies for reinsurers. It provides a comprehensive, up-to-date and useful summary of technology trends (described for the non-technical reader) divided into two segments: those that create opportunity through disruptions, and those that continue to enable business and IT convergence. It contains a useful high-level STEEP analysis (Social, Technological, Economic, Environmental and Political analysis) for the insurance industry as a whole. 9 © Internal Consulting Group 2015

Structured knowledge references: featured in ICG Industry Insights Reviews Reference Issue date Source Relevance Maximising Value from Your Reinsurance Spend October 2011 PWC A short, high-quality article pointing out that improvements in economic capital modelling analysis, when applied to reinsurance treaties, can provide a useful assessment tool and possible negotiation lever. Delivering results through claims technologies December 2011 Ernst & Young This report examines the many pressures on claims management functions today and assesses how insurers are responding to new and emerging issues in the claims environment, particularly with technology solutions. 10 © Internal Consulting Group 2015

Structured knowledge references: by topic Reference Source Relevance The Journal of Insurance Operations, January 2011 This web article examines the shift in insurance away from the agent/broker and insurance company to the consumer. Mostly retail-focussed, but insights that may be applied to commercial insurance. Vertical Snapshot: Mobility in Insurance Tata Consultancy Services, November 2011 This web article identifies mobility as an important technological advancement for the insurance market, offering unique opportunities for different types of insurance. Industry innovations: A mobile applications interview with Bob Evans The Journal of Insurance Operations, January 2011 This web article looks at how insurance operations can use mobility, the challenges and considerations. Mostly retail-focussed, but insights that may be applied to commercial insurance. Insurance Age, November 2011 The SME space (potentially 99% of business) is much fought over, but what is it that this disparate group of businesses want from insurers and brokers, 
and what do brokers need from insurers in order to deliver now and in the future? Consumer focus The insurance tipping point: Innovation and transformation Mobility SMEs What SMEs want 11 © Internal Consulting Group 2015

Knowledge Components Section 3 12 © Internal Consulting Group 2015

Knowledge Components are structured by the most relevant value chain component Insurance value chain (and number of innovations cited) Corporative management Marketing (2) Distribution (2) Products (52) Underwriting (1) Operations Claims (4) Services Risk management Compliance Organisation and quality Financials and accounting Human resources Information technologies (7) Procurement and logistics 13 Source: adapted from the RAID Integrated Assurance Framework, wedotechnologies. com © Internal Consulting Group 2015

Each innovation is categorised and numbered using an innovation code The format is VC-nn, where V is the value chain component, C is the category, and nn is the innovation number; eg. PER-01 Innovation code prefixes Value chain component Category Innovation code prefix Marketing New niches MNN Distribution Customising a channel to a particular customer segment DCC Portals > white-labelling DPW New or emerging risks PER New or emerging niches PEN Process change PPC Increasing segment granularity PSG Products Seamlessness between retail and commercial customers PS Bundling of solutions PB Underwriting Prioritising improvement opportunities UIO Claims Technology CT Technology Customer focus CCV Product integration TPI New tools TNT Portals > social media TPS Portals > general TPG © Internal Consulting Group 2015 14

Innovations are segmented using fishbone (Ishikawa) diagrams Marketing (2) Products (52) Distribution (2) PEN: Emerging or new niches DCC: Customising a channel to a particular customer segment PER: Emerging or new risks PSG: Increasing segment granularity PPC: Process change MNN: New niches PB: Bundling of solutions DPW: Portals > white-labelling PS: Seamlessness between retail and commercial customers CT: Technology TPI: Product integration TNT: New tools UIO: Prioritising improvement opportunities TPS: Portals > social media CCV: Customer value Underwriting (1) Claims (4) TPG: Portals > general Technology (7) 15 © Internal Consulting Group 2015

Product innovations by category (1) Emerging or new niches Emerging or new risks PER-01: cyber security product PER-06: how people will drive in the future and how this will change insurance needs PER-02: cyber liability for academic medical centres and affiliate hospitals PEN-01: product for the plastics industry PER-07: commercial property policy for acute care medical facilities PER-09: policy to limit the financial fallout from negative public relations exposure for hotels PER-04: product liability coverage for the manufacturers of nutritional and dietary supplements PER-10: scheme for when the ‘wrong’ kind of weather hits PER-05: stand-alone Employment Practices Liability policy PEN-12 area-rated hotel and guesthouse product PEN-13: appeal to environmentallyconscious policyholders PEN-14: home insurance scheme for psychological professionals who see clients at home PEN-15: insurance coverage for fire departments PEN-07: charity policy PEN-02: equine delegated authority scheme PER-08: a product that detects employees accessing and distributing sensitive data PER-03: coverage for the nutraceutical industry PEN-16: solar contractors' protection coverage PEN-06: event cancellation product PEN-03: focus on cleaning contractor businesses PEN-09: recall coverage and recall liability insurance PEN-10: target firms with particular range of assets under management PEN-04: scheme for the security industry PER-11: renewable energy risks PEN-17: policy for printers' errors PEN-18: concentrator photovoltaic (CPV) coverage PEN-08: cover exposures related to mergers and acquisitions PEN-22: focus on generic pharmaceuticals, medical devices and nutritional supplements PEN-21: Accountants Professional Liability Insurance Program Emerging or new niches PEN-25: specialised policy for home -and garage-based businesses PEN-26: green insurance product line for the hospitality industry PEN-27: policies for the weather PEN-28: Commercial Specific Liability (CSL) PEN-23: specialised ambulance insurance PEN-19: World’s first restriction of hazardous substances insurance PEN-24: mobile food vendor program PEN-20: Landscaper Program PEN-11: cover for tour operators against being ‘caught out’ PEN-05: errors and omissions coverage PEN-29: business interruption policy for home-based legal businesses PEN-30: No-show coverage PEN-31: Homeworkers’ compensation Emerging or new niches © Internal Consulting Group 2015 16

Product innovations by category (2) Process change Increasing segment granularity PPC-01: pay-as-you-go plan allows workers’ compensation policyholders to pay their premium one payroll period at a time PPC-02: a quicker solution to Contractors cover with a simple execution policy with considerably wider scope PSG-01: combined policy for the manufacture of metal products PSG-02: Equipment policy for the assembly of parts which interact in operation to provide mechanical function PPC-03: product that will independently review and store loan paperwork for a fee PS-01: property owners product aimed at smaller risks PS-02: a residential and commercial landlords product Seamlessness between commercial and retail customers PSG-03: SME products for specific trades and niches PB-01: amalgamate the property and liability insurance sectors with the engineering insurance sector to the benefit of SMEs PB-02 combined Marine Cargo and Marine Stock Throughput policy Bundling of solutions 17 © Internal Consulting Group 2015

Global product launches, at a glance RT-Specialty, USA PER-03: coverage for the nutraceutical industry Beazley, UK PER-02: cyber liability for academic medical centres and affiliate hospitals Lexington Insurance Co. , USA PER-04: product liability coverage for the manufacturers of nutritional and dietary supplements PER-07: commercial property policy for acute care medical facilities Marchant Mc. Kechnie, UK PER-08: a product that detects employees accessing and distributing sensitive data Arch Insurance Group, USA PER-05: stand-alone Employment Practices Liability policy Arch Insurance Group, USA PER-11: renewable energy risks Eastern Alliance Insurance Group, USA PPC-01: pay-as-you-go plan allows workers’ compensation policyholders to pay their premium one payroll period at a time AIG, USA PPC-03: product that will independently review and store loan paperwork for a fee Chubb, Europe PER-01: Cyber security product Zurich, Switzerland PER-06: how people will drive in the future and how this will change insurance needs Markerstudy Group, UK PSG-03: SME products for specific trades and niches RSA, UK PB-02 combined Marine Cargo and Marine Stock Throughput policy Willis, UK PER-09: policy to limit the financial fallout from negative public relations exposure for hotels Weather. Brokers. com, UK PER-10: scheme for when the ‘wrong’ kind of weather hits APC, UK PPC-02: a quicker solution to Contractors cover with a simple execution policy with considerably wider scope PS-02: a residential and commercial landlords product Aviva, UK PSG-01: combined policy for the manufacture of metal products PSG-02: Equipment policy for the assembly of parts which interact in operation to provide mechanical function NIG, UK PS-01: property owners product aimed at smaller risks PB-01: amalgamate the property and liability insurance sectors with the engineering insurance sector to the benefit of SMEs © Internal Consulting Group 2015 18

Global product launches, at a glance Optimum Insurance Company, Canada PEN-13: appeal to environmentallyconscious policyholders Travelers, USA PEN-01: product for the plastics industry UK Insurance Solutions, UK PEN-02: equine delegated authority scheme Fireman’s Fund Insurance Company, USA PEN-15: insurance coverage for fire departments Think. Risk Underwriting Agency, USA PEN-05: errors and omissions coverage Groupama, UK PEN-03: focus on cleaning contractor businesses Energi Insurance Services, USA PEN-16: solar contractors' protection coverage One. Beacon Insurance Group, USA PEN-06: event cancellation product CNA Insurance Cos. , USA PEN-17: policy for printers' errors Central Insurance, UK PEN-07: charity policy Munich Re, USA PEN-18: concentrator photovoltaic (CPV) coverage Kite Warren & Wilson, UK PEN-10: target firms with particular range of assets under management Brownyard Group, USA PEN-20: Landscaper Program Touchstone Underwriting, UK PEN-11: cover for tour operators against being ‘caught out’ Landy Insurance Agency, USA PEN-21: Accountants Professional Liability Insurance Program APC, UK PEN-12 area-rated hotel and guesthouse product Ryan Specialty Group, USA PEN-22: focus on generic pharmaceuticals, medical devices and nutritional supplements National Interstate Insurance, USA PEN-23: specialised ambulance insurance Markel Programs, USAK PEN-24: mobile food vendor program Macmillan Sheikh, UK PEN-04: scheme for the security industry The Climate Corporation, USA PEN-27: policies for the weather Revelers Insurance, USA PEN-29: business interruption policy for home-based legal businesses Barkely Insurance, USA PEN-25: specialised policy for homeand garage-based businesses Handover Insurance, USA PEN-30: No-show coverage Fulcrum Insurance Programs, USA PEN-26: green insurance product line for the hospitality industry The Harmfort, USA PEN-31: Homeworkers’ compensation Oxygen Insurance Brokers , UK PEN-14: home insurance scheme for psychological professionals who see clients at home Ironshore, Australia PEN-08: cover exposures related to mergers and acquisitions Asia Capital Reinsurance Group, Taiwan PEN-19: World’s first restriction of hazardous substances insurance PEN-09: recall coverage and recall liability insurance PEN-28: Commercial Specific Liability (CSL) © Internal Consulting Group 2015 19

Products Category Innovation Description Emerging or new risk 1 (PER-01) Cyber security product Chubb has launched a new cyber security insurance product for companies in Europe that own or control confidential, personal, sensitive financial information or private health data. It is also targeted at companies that transact business via the internet. The move follows a similar offering in the US and the insurer claims there has been a significant upswing in demand in Europe. The policy, which provides coverage for financial loss arising out of a data security breach by offering cover for associated first party and third party liability losses, has been based on Chubb’s US offering. Michael Thyssen, European product manager at Chubb, commented that current buying patterns suggested the cyber insurance market was in its infancy in Europe but that the insurer had noticed a significant upswing in enquiries. Read the full article | See the features of Cyber. Security by Chubb Emerging or new risk 2 (PER-02) Cyber liability insurance Beazley, a leading insurer of data privacy and network security risks, has been selected by UHC as the preferred cyber liability insurer for UHC's 114 academic medical centers and 255 affiliate hospitals. UHC will offer Beazley's flagship product, Beazley Breach Response is a complete privacy breach response management and information security insurance solution which includes coverage for breaches affecting up to 4, 000 individuals, including notification and credit monitoring. The product is tailored to the needs of healthcare organizations as well as higher education, retail, and hospitality businesses. Read the full article 20 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new risk 3 (PER-03) Coverage for the nutraceutical industry R-T Specialty also developed broad coverage for the nutraceutical industry, specifically for the American Herbal Products Assn. , for the products and dietary supplements that lack a Food and Drug Administration approval process. Product liability coverage for the manufacturers of nutritional and dietary supplements The nutraceutical industry has responded to underwriters’ concerns about product liability coverage for the manufacturers of nutritional and dietary supplements, which experts say has led to steady capacity and stable pricing. Emerging or new risk 4 (PER-04) Read the full article “The insurance market has come back pretty strongly; and actually, there are some new entrants in that world that, frankly, have made our placements in the last year or so actually a little easier than they have been, ” Mr. Walters said. Lexington Insurance Co. re-entered the nutraceutical insurance market in 2009 after taking some ephedra-based losses following the 2004 scare, said John Parente, senior science adviser for Lexington in Boston. Read the full article 21 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new risk 5 (PER-05) Stand-alone Employment Practices Liability policy Arch Insurance Group announces the immediate availability of Arch Essential EPL(sm), a new stand-alone Employment Practices Liability policy from Arch's Executive Assurance Division. The new policy was developed by Arch to help employers of all sizes and industries mitigate today's most pressing employment-related risk issues. With Arch Essential EPL(sm), employers have a cutting-edge tool in their risk management portfolio. Coverage includes late notice protection for EEOC Charges and Written Demands and coverage for Wrongful Acts carried out over any medium, including the Internet and Social Media. Arch Essential EPL(sm) coverage features include: State-of-the art "EEOC Charge & Written Demand Continuity Protection“ Broadened definition of Employment Practices Wrongful Act, including: Discrimination based on military or veteran status or political affiliation Workplace bullying Retaliation, including negative treatment of employee Internet and Social Media harassment and discrimination coverage, with coverage for individual defendants "Loss" definition includes explicit defense costs carve-back Emotional distress and mental anguish carve-back to bodily injury exclusion No intentional conduct exclusion Non-rescindable policy The new Arch policy offers a significant value-added benefit: Arch has arranged for workplace law expert Jackson Lewis LLP to provide a call-in help line to assist Arch insurance with basic employment law questions and advice; complimentary attendance at Jackson Lewis breakfast series conferences and similar programs; a discount of ten percent for the firm's regular hourly rates for risk management services; and, unlimited access to the firm's informational website. 22 Read the full article © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new risk 6 (PER-06) A better understanding of how people will drive in the future and how this will change insurance needs Zurich announced it will be collaborating with innovative Swiss car manufacturer Rinspeed on initiatives to develop a better understanding of how people will drive in the future and how this will change insurance needs. This is an example of the lead-user approach to innovation, to partner with the risk customer of tomorrow. Emerging or new risk 7 (PER-07) Commercial property policy for acute care medical facilities New environment-friendly technologies and materials are playing an increasingly important role in the construction of cars. In the future, it is likely that insurance coverage will focus less on mere horse power and more on built-in technologies. While new technologies open up a wide range of opportunities, at the same time new risks arise for which innovative insurance solutions are needed. Close cooperation between partners from the different industries is therefore vital during the product development stage. Read the article Lexington Insurance Co. Pandemic Rx is an enhancement available to Lexington’s commercial property policy for acute care medical facilities. It provides coverage for business-income loss sustained and extra expense incurred by these facilities during a declared influenza publichealth emergency. Read the full article 23 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new risk 8 (PER-08) A product that detects employees accessing and distributing sensitive data A new product that could detect employees accessing and distributing sensitive company data has been launched. Cyber Protect has been set up by Marchant Mckechnie Insurance Brokers under the banner of Digital Forensic Insurance Services with the assistance of former Smart and Cook CEO and Axa customer services director, Paul Meehan. Covers clients for the cost of forensic investigation, which could run in to the tens of thousands of pounds. The policy provides £ 50, 000 worth of cover in any one year forensic investigation costs and £ 10, 000 cover for data recovery. Read the full article Emerging or new risk 9 (PER-09) Policy to limit the financial fallout from negative public relations exposure for hotels Willis has teamed up with Lloyd’s of London underwriter Kiln to create Hotel Reputation Protection 2. 0, a new policy designed to limit the financial fallout from negative public relations exposure for hotels. The cover protects against brand damage from a range of potential incidents including the death or permanent physical disability of a guest, and food poisoning caused by malicious or accidental contamination. The policy, which will respond whether the incident is reported via traditional or new media, uses a hotel industry measure of lost revenue based on revenue available per room. It will pay up to € 25 m for hiring a crisis management consultant in the first weeks of an incident along with reimbursing falls in revenue. Read the full article 24 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new risk 10 (PER-10) Scheme for when the ‘wrong’ kind of weather hits Weather. Brokers. com has teamed up with ex-BBC presenter John Kettley to launch an insurance scheme designed to compensate companies and institutions when the ‘wrong’ kind of weather hits. The solution offers insurance (minimum sum insured £ 100, 000) against adverse variations in the seasonal norms of temperature, precipitation, snow and sunshine – locally, regionally, nationally or internationally. The schemes cover any given year, season, month or named period. Therefore, the company claimed, it would be possible to marry up the precise weather risk a company or institution may face with a bespoke solution. Read the full article Emerging or new risk 11 (PER-11) Renewable energy risks Ryan Specialty Group, LLC (RSG) introduces PER se (Power. Energy. Risk, 'securing the environment') - an MGU specializing in the energy and power sector, with a primary focus on renewable energy risks. PER se offers agents, brokers and their energy clients CAT and non-CAT property and casualty coverages for wind, solar, bio, hydro and all other forms of renewable energy power facilities. Coverage is provided for all phases of the project exposure cycle, including cargo/transit, delay in start-up, construction, machinery breakdown, business interruption, operational and other liabilities. Read the full article 25 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 1 (PEN-01) Product for the plastics industry Travelers has launched a new insurance product for the plastics industry providing a range of commercial covers including property damage, business interruption, employers’ liability, public and products liability and professional indemnity. The insurer claimed the package was suitable for a wide range of businesses within the plastics and rubber industry, from injection to slush moulding and thermoforming firms. Read the full article Emerging or new niche 2 (PEN-02) Equine delegated authority scheme Rural Insurance and broker UK Insurance Solutions have teamed up for the launch of the provider’s first equine delegated authority scheme. The agricultural arm of UK General Insurance said the scheme, named Equine Insurance Solutions, was targeted at both existing clients who wanted a simpler, value product and new customers who found current offerings too expensive. Chief operating officer Mike Ellis commented: “The UK’s agricultural insurance market needs to change, and we want to be the company brokers see leading the changes. ” Read the full article 26 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 3 (PEN-03) Focus on cleaning contractor businesses Groupama has released Exclusively Cleaning, the third niche commercial product in the range following the launch of Exclusively Recruitment and Exclusively Security. Aimed at cleaning contractor businesses, a market segment which the insurer estimated has a turnover of £ 5. 3 bn, the product is available for open market trading and offers cover for damage to premises being cleaned and misuse of customer telephones as standard. Exclusively Cleaning also offers variable commission of up to 30% for brokers and Groupama added it was open to discussions for special deals and schemes for volume business. The types of businesses the new offering can cover includes contractors providing cleaning services to private residential properties, offices, shops, hotels, public houses and schools. The core cover is public liability, with a minimum premium starting at £ 400 plus IPT. Employers’ liability with an indemnity limit of £ 10 m and loss of keys can be covered as optional extras. Read the full article Emerging or new niche 4 (PEN-04) Scheme for the security industry Macmillan Sheikh has launched its first scheme for the security industry. The firm will administer the scheme under a delegated authority binder agreement which has been developed with specialty insurer Inter Hannover. According to the broker, it will provide insurance for a variety of firms including security, alarm and fire protection companies on a bespoke basis. Lord Sheikh said: “This is a sector with very particular 
needs and challenges which therefore benefits greatly from a bespoke, specialist insurance approach. ” Read the full article 27 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 5 (PEN-05) Errors and omissions coverage Think. Risk Underwriting Agency L. L. C. , focuses on errors and omissions coverage in the converging areas of media, advertising, technology, privacy and network security. It has developed a program responding to California’s Proposition 65 for food and drug labeling. Read the full article Emerging or new niche 6 (PEN-06) Event cancellation product One. Beacon Entertainment, a member of One. Beacon Insurance Group, today announced that it is expanding its offerings to include an event cancellation product--Event. Shield(R) provides protection for associations and organizations that host conventions, conferences, trade and consumer shows, and is available nationwide on a surplus lines basis. Coverage is available for indoor and outdoor events held nearly anywhere in the world. Perils covered under the Event. Shield(R) product include adverse weather, such as blizzards, floods, tornados and hurricanes; fire, collapse or destruction of the event site; power failures; and strikes. Supplementary coverages include non-appearance of a key speaker or entertainer; failure to vacate the event facility; and physical loss of personal property and door registration receipts. Additionally, there are options for acts of terrorism coverage. Read the full article 28 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 7 (PEN-07) Charity policy Central Insurance has joined forces with Hiscox to launch a new charity policy. It is the first tie-up between the Aberdeen-based broker and the specialist insurer in a move the two claimed was designed to meet the entire spectrum of insurance needs for Scottish non-profit organisations in a single policy. They highlighted that while charity insurance products traditionally provided liability and property cover, other risks such as event cancellation were not necessarily included, leaving potential gaps. John Heaney, head of professions and specialty commercial division at Hiscox, explained: “This product combines the financial protection that trustees should have, such as professional indemnity and trustees liability cover, with conventional commercial cover that every charity needs. ” Read the full article Emerging or new niche 8 (PEN-08) Cover exposures related to mergers and acquisitions Ironshore Australia has developed coverage for exposures related to mergers and acquisitions throughout the Asia/Pacific region. The coverage, designed to address increased M&A activity in the region, will be available through select insurance brokers. Read the full article 29 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 9 (PEN-09) Recall coverage and recall liability insurance When it comes to product liability, global manufacturers typically have a high self-insured retention and purchase product liability insurance with excess layers of coverage, experts say. “(Large manufacturers) buy insurance typically in an umbrella or excess form that covers general liability and auto liability and a broader set of liability risks, not just product liability specifically, ” said Mike Stankard, managing director of Aon Risk Solutions’ automotive practice in Detroit. While product liability insurance is litigation-oriented, product recall policies are a separate coverage that are tied to a company’s business processes. Product recall coverage and recall liability insurance are in demand as the entire chain — growers, processors, suppliers, co-packers and distributors. Read the full article | Read the full article on food safety law Emerging or new niche 10 (PEN-10) Target firms with particular range of assets under management Broker Kite Warren & Wilson (KWW) has targeted the high end SME asset manager and Lloyd’s managing agent market with a suite of new liability products. The broker has hired former Willis FINEX national executive director Ed Williams to head up the operation which will target firms with assets under management of between £ 500 m and £ 100 bn. The new unit will also be offering professional indemnity and directors’ and officers’ business for professional firms. Read the full article 30 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 11 (PEN-11) Cover for tour operators against being ‘caught out’ Touchstone Underwriting, on behalf of RSA and Zurich, is offering cover for up to £ 25 m public liability includes corporate manslaughter proceedings and tour operators’ liability arising from use of any vehicle, vessel or aircraft. The concept fills a potential need for tour operators to maintain cover against being ‘caught out’. Key benefits: Avoids multiple renewal dates with various providers and gaps in cover Includes inadvertent breach of civil aviation licensed activities Crisis costs included PR costs extend across employers’ and public liability and directors’ and officers’ coverage 24/7 Emergency Line Read the full article Emerging or new niche 12 (PEN-12) Area-rated hotel and guesthouse product Commercial insurance underwriting agency, APC, is to launch a new area-rated hotel and guesthouse product to help UK proprietors take advantage of the expected surge in tourist numbers resulting from the Olympics. The new product will cover a wide range of risks up to £ 10 million sum insured with no limit on bedroom numbers. The minimum premium is £ 400. APC is offering significant discounts for better quality risks that have invested in loss prevention facilities or have not previously experienced a claim. The product has a wide definition of hotel – including self-catering complexes. It covers inner city and rural locations and the TSI is £ 10 m per location. With modern policy wording, the product covers a wide range of cover as standard. Quotes available online in rapid time – five minutes and non-standard quotes are responded to within two to three hours. (Lloyd’s and London Company underwriters) Read the full article © Internal Consulting Group 2015 31

Products Category Innovation Description Emerging or new niche 13 (PEN-13) Appeal to environmentally -conscious policyholders Green Home Endorsement for homeowners policies is designed to appeal to a growing number of environmentally conscious policyholders. It is a bundled package designed to reduce the home’s carbon footprint and promote the use of environmentally friendly materials as an alternative choice in repair or replacement materials. Read the full article While this is a retail product, the innovation has potential for commercial applications. Emerging or new niche 14 (PEN-14) Home insurance scheme for psychological professionals who see clients at home Oxygen Insurance Brokers has launched an exclusive home insurance scheme for psychological professionals in the UK who see clients at home. The Oxygen Psychological Professionals Home Insurance Scheme is underwritten by Ecclesiastical. The broker claimed that the new scheme was launched due to demand from counsellors and psychotherapists in particular, who had found 
issues getting cover when they declared they had clients visiting them at home. The new Defaqto-rated household product with a work from home extension provides cover for business interruption and business money. It also offers theft and malicious damage cover that does not have forcible and violent entry restrictions for business visitors. Read the full article 32 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 15 (PEN-15) Insurance coverage for fire departments Fireman’s Fund Insurance Company is partnering with Fire Insurance Risk Enterprise, LLC, to offer comprehensive insurance solutions to fire departments and districts. Insurance products include professional liability, medical malpractice, property (includes equipment and vehicles), and umbrella. “In working with fire departments, our real goal is prevention – to help reduce claims in the first place, ” said Jeff Griffin with Fire Insurance Risk Enterprise. “We are placing a heavy emphasis on auto driving safety and offering appropriate coverages to protect the departments and districts. ” Currently, this insurance is available to any public fire department or district in 11 states. Fireman’s Fund and Fire Insurance Risk Enterprises plan to expand the program nationwide. “We have a long history and connection with the fire service and are very forward-focused on safety and prevention, ” said Lori Fouché, president of Commercial Insurance at Fireman’s Fund. “Fire departments across the country have long asked us to create an insurance product designed just for them. With the expert claims service provided by Fireman’s Fund, fire departments will not only receive the best coverage, but also the best claims response should something happen. ” Read the full article 33 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 16 (PEN-16) Solar contractors' protection coverage Energi Insurance Services of Peabody, Mass. , has introduced its Solar Installation Performance Warranty, underwritten through International Insurance Company of Hannover Ltd. , a unit of Hannover Re. The coverage insures against lost revenue from a solar array in case a solar contractor's design or installation causes reduced output. The warranty, purchased by the contractor, provides project owners, developers and lenders additional security for the electricity and Solar Renewable Energy Credit revenue generated by commercial solar installations. Coverage is available through agents and brokers in all 50 states for U. S. -based solar contractors following best practices. Read the full article Emerging or new niche 17 (PEN-17) Policy for printers' errors CNA Insurance Cos. has enhanced its printers-and-publishers' protection with its new Correction of Work endorsement, part of CNAs Printing and Graphic Imaging program. The endorsement reimburses printers and publishers for expenses in making corrections to their work products, and defends and pays thirdparty claims arising when a customer retains a different printer to correct work, then sues the original printer for reimbursement. 34 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 18 (PEN-18) Concentrator photovoltaic (CPV) coverage Munich Re has introduced the first coverage in the United States for the photovoltaicproducing segment of the solar module industry, and first of its kind in the world for concentrator photovoltaic systems. CPV technology uses innovative optics to concentrate sunlight onto a small area of high-efficiency solar cells. By extending coverage to this promising solar technology, Munich Re provides solar plant operators and investors greater planning security and permits these firms to remove long-term, technical-guarantee risk from their balance sheets. Munich Re already makes performance-guarantee coverage available to manufacturers of photovoltaic cells based on other technologies. Read the full article Emerging or new niche 19 (PEN-19) World’s first restriction of hazardous substances insurance Asia Capital Reinsurance Group (ACR) is reinsuring Union Insurance for the first Restriction of Hazardous Substances (Ro. HS) Insurance in Taiwan. The Ro. HS Insurance is the first of its kind in the world, offering an integrated solution to manage manufacturers’ risk exposure to the non-compliance of Ro. HS directives in the EU, ACR said in a statement. Read the full article 35 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 20 (PEN-20) Landscaper Program Brownyard Group, a program administrator providing specialized insurance coverage for select industry groups, announced today that it has launched Ground. Cover, a new insurance program for landscape professionals. The program provides General Liability and Property coverage for landscape contractors such as landscape gardeners and lawn care services, with coverage also provided for incidental exposures related to the insured's business. "Ground. Cover is a natural extension of the experience and expertise that we have gained through our Pest Control program, in which landscaping was an incidental exposure that many pest control operators firms provide and we insure, " said Tory Brownyard, president of Brownyard Group. Read the full article Emerging or new niche 21 (PEN-21) Accountants Professional Liability Insurance Program The Herbert H. Landy Insurance Agency, Inc. announces their partnership with The Navigators Management Company, Inc. , the principal underwriting subsidiary of The Navigators Group, Inc. , to offer a national program for accountants professional liability insurance beginning November 1, 2011 for accounting firms with revenues of one million dollars or less. The Landy Agency will also have access to Navigators Pro open brokerage division for larger accounting practices. In addition to expanded coverage options and features, the program will now offer an "EXPRESS" application with a two year policy option. The client qualifies for coverage by answering a brief series of questions on the self-rating application, making the process quick and easy for insureds and producers alike. Read the full article 36 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 22 (PEN-22) Focus on generic pharmaceuticals, medical devices and nutritional supplements Ryan Specialty Group, LLC (RSG) today announced the launch of Life. Science. Risk, a Managing General Underwriter specializing in generic pharmaceuticals, medical devices and nutritional supplements. Insurance products include commercial general liability or monoline products liability for manufacturers, contract manufacturers, repackers and distributors of these life science related products. Available on a non-admitted basis in all states other than Delaware and Rhode Island, the program is underwritten by Catlin Specialty Insurance Co. , currently rated "A XV“. Read the full article Emerging or new niche 23 (PEN-23) Specialised ambulance insurance National Interstate Insurance Company ("National Interstate"), a leading provider of transportation insurance, announced it has entered the ambulance insurance market through a relationship with Mc. Neil & Company, Inc. ("Mc. Neil"). The Ambulance Services Insurance Program ("ASIP") is an insurance solution created specifically for emergency and non-emergency medical transportation operators. ASIP is administered by Mc. Neil, with insurance coverages and claims services being offered jointly by National Interstate and Mc. Neil also provides loss control and risk management services. This specialized insurance program was designed for best-in-class for-profit emergency and non-emergency medical transportation companies with a commitment to safety excellence. The ASIP program provides a comprehensive coverage package, superior claims management and extensive loss control services. Through the new relationship between Mc. Neil and National Interstate, members will enjoy several product enhancements. Read the full article 37 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 24 (PEN-24) Mobile food vendor program Markel Programs announced today that it has partnered with Whorton Insurance Services, Inc. , a managing general agency, to offer immediate availability of a multi-line admitted program for independent mobile food vendors through Markel's network of appointed retail agents. Coverages available include general liability, auto, umbrella, crime, inland marine, and excess limits up to $5 million. Frank Noyes, Executive Underwriter at Markel Programs, stated, "We are excited to be getting in on the ground floor of this emerging food industry niche with Ron Ortega and the experienced, professional staff of Whorton Insurance Services. ” Target classes for the program include small-to-medium size mobile food vendors that are individually owned or operated, such as licensed hot food and cold lunch trucks, gourmet coffee vendors, and catering trucks. Read the full article Emerging or new niche 25 (PEN-25) Specialised policy for home-and garage-based businesses Barkley is selling a product liability policy for home or garage-based businesses that manufacture cosmetics, clothing, jewelry, toys, computers, beer, firearms, scuba gear, musical instruments, motor vehicles, mobile homes or other products using primarily recycled, upcycled, natural or organic materials. Read the full article 38 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 26 (PEN-26) Green insurance product line for the hospitality industry Mainstay Insurance Group (now Fulcrum Insurance Programs) has expanded its Program Division with the creation of insurance products and services specifically catered to the Hospitality industry. This new market appetite includes limited service, full service, upscale and luxury hotels and resorts in all 50 states, and will offer an innovative program to support the industry in its commitment to going green. Mainstay's Hospitality Program will offer industry-focused insurance for qualifying accounts generating a minimum of $10, 000 in written premium. Available lines of coverage include: General Liability, Property, Liquor Liability, and Umbrella Liability with limit options from $5 M to $100 M. Supporting carriers are A rated offering both admitted and non-admitted options. What's more, the addition of Hospitality to Mainstay's Program Division is in synch with its dedication to the Green Movement and support of The Association of Green Property Owners and Managers (AGPOM). The program will not only offer a competitive insurance proposal, but also provide tools and services that help clients leverage the financial benefits of the Green Movement. "When you look at what has taken place within the Green Movement in the past ten years or so with entrepreneuring hoteliers implementing conservation programs, as well as the boom of green, ecofriendly hotels, you see that this industry is at the forefront among the real estate segments in making significant strides in terms of capital investments and behavioral changes within their buildings and sites, “ said Mr. Rowland. "Yet there are still many hotels and resorts looking for ways to get involved and go green. We see our program as an opportunity to offer them the same type of multi-faceted value the AGPOM platform offers property owners. “ Read the full article 39 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 27 (PEN-27) Policies for the weather Weather. Bill (now The Climate Corporation), an online general agency providing weather insurance, has a suite of products that protect small business, agriculture, tourism, municipal governments and commercial aviation from "the increased incidence of extreme climate events. " Policies are available nationwide and are underwritten by State National Insurance Co. of Bedford, Texas. Plans cover drought, heat, freeze, excess rainfall and snowfall or any other measurable weather. Weather. Bill policies pay out automatically, based solely on measured weather conditions, requiring no claims process or loss adjustment. Read the full article Emerging or new niche 28 (PEN-28) Commercial Specific Liability (CSL) A low-cost option to the Commercial General Liability (CGL), the CSL lets business owners specify the exposures they want covered. The final ISO form is not expected until June but some examples of actions expected to be covered include: nailing into a water pipe, electrical wiring or cable; causing a fall due to the failure to remove or warn of water, change in elevation (a step), or intoxication; and releasing a pollutant that the insured did not bring to the job site. Read the full article 40 © Internal Consulting Group 2015

Products Category Innovation Description Emerging or new niche 29 (PEN-29) Business interruption policy for home-based legal businesses Revelers Insurance has a business interruption policy for any legal service business conducted from the home, from hackers and day traders to massage therapists and insurance agents. Covers loss of Internet connection, telephone service, HVAC and refrigerator. Key family interruption provision covers time lost due to family emergency, including injury, sickness, potty training accident, or the “Daddy, I’m bored” syndrome. No-show coverage There is coverage for shoddy work, but what about when the plumber, electrician, roofer or other contractor doesn’t even show? Handover Insurance now covers damage caused by old pipes, leaky roof, frayed wiring or other conditions that did not get fixed on schedule as promised. Emerging or new niche 30 (PEN-30) Read the full article Emerging or new niche 31 (PEN-31) Homeworkers’ compensation The Harmfort has developed injured worker coverage specific to hazards of the home-based workplace. Includes injuries related to solitary worker syndrome (where individuals exhibit reduced social skills), excessive weight gain, unnatural pet attachment, and deterioration of driving skills. Read the full article 41 © Internal Consulting Group 2015

Products Category Innovation Description Process change 1 (PPC-01) Pay-as-you-go plan allows workers’ compensation policyholders to pay their premium one payroll period at a time Parallel. Pay, a pay-as-you-go plan, allows workers’ compensation policyholders to pay their premium one payroll period at a time. Since its inception in 2009, the program for the middle market has written more than 1, 000 policies for approximately $38 million in direct written premium. A quicker solution to Contractors cover with a simple execution policy with considerably wider scope APC has responded to broker demand for a quicker solution to Contractors cover by launching a new simple execution policy with considerably wider scope. Process change 2 (PPC-02) Read the full article APC will release a brand new product that caters for the standard requirements of medium and large sized contractors as well as providing a wide range of optional extensions including Contractors All Risks. This will enable clients to choose the level of cover they require. A range of useful benefits include covering clerical employees free of charge and not reducing commission for Employers Liability cover. APC underwriting director Ian Russell said: “Placing Contractors business is often tougher than standard SME. ” Read the full article 42 © Internal Consulting Group 2015

Products Category Innovation Description Process change 3 (PPC-03) Product that will independently review and store loan paperwork for a fee American International Group Inc. 's mortgage-insurance subsidiary plans to launch a product next month that will independently review and store loan paperwork for a fee, the latest attempt to cut down on the battles between banks and insurers over bad mortgage loans. Banks that agree to use United Guaranty Corp's "Cover. Edge" will pay a 10 to 15 percent fee in exchange for a full review of mortgage documents, both before and after loan closing. The fee will likely be passed on to borrowers as part of closing costs. Read the full article 43 © Internal Consulting Group 2015

Products Category Innovation Description Increasing segment granularity 1 (PSG-01) Combined policy for the manufacture of metal products The Aviva Metal policy is essentially a business combined policy designed for businesses involved in the manufacture of metal products ranging from single pieces of metal - nuts and bolts or structural steel - through to finished products such as window frames and metal furniture. Cover for assets can be arranged on an all risks or specified peril basis and there are options to include useful extensions such as contract works, directors' and officers' insurance and engineering. The policy automatically includes cover on moulds, models, patterns, tools and dies at the insured premise, while in transit to any situation in the UK up to £ 100, 000. The metal workers extension is also worthwhile, covering up to £ 50, 000 of stock or materials per third-party location, with a limit of £ 250, 000 during any one period of insurance. The standard cover also includes insurance for non-ferrous metals up to £ 10, 000. Policyholders have free access to Aviva's ‘cut red tape' website that provides businesses with advice on health and safety, HR and risk management. Policyholders have access to a 24 hour claims notification phoneline, however some brokers may find the lengthy proposal form off-putting especially for a smaller sized risk. Read the full article 44 © Internal Consulting Group 2015

Products Category Innovation Description Increasing segment granularity 2 (PSG-02) Policy for the assembly of parts which interact in operation to provide mechanical function The Aviva Machinery and Equipment policy is essentially a business combined policy covering the insurance needs of business involved in the assembly of parts which interact in operation to provide mechanical function. Cover for assets can be arranged on an all risks or specified peril basis and there are options to include useful extensions such as contract works, directors’ and officers’ insurance and engineering. Charities and not for profit organisations benefit from a few extra cover extensions, such as insurance for bequeathed property and stock and contents at fund raising events. Policyholders have free access to Aviva’s ‘cut red tape’ website that provides businesses with advice on health and safety, HR and risk management. Although this is a comprehensive combined policy I am of the opinion that, despite the Machinery and Equipment branding, it is not very different from a lot of the competing products. Read the full article Increasing segment granularity 3 (PSG-03) SME products for specific trades and niches As a result of its push into the commercial intermediary arena, Markerstudy is preparing to roll out six new products by the end of summer. The group revealed that its purchase of Blagrove Insurance Brokers was the first purchase in a £ 100 m acquisition spree. “We will be looking at developing SME products for specific trades and niches. Some will have quote online facilities but we tend not to buy online as SMEs value face-to-face. They want to talk about risks with someone and not deal with a faceless website. ” Read the full article 45 © Internal Consulting Group 2015

Products Category Innovation Description Seamlessness between commercial and retail customers 1 (PS-01) Property owners product aimed at smaller risks NIG is celebrating a successful first year of trading for its Premier Property Owners product and has announced plans for an additional Property Owners product aimed at smaller risks. Launched in July 2010 Premier Property Owners was aimed at large UK based property owning clients and managing agents and was available exclusively to a panel of 40 brokers UK wide. NIG has quickly become a 'first choice' property owners insurer for many of the brokers on the panel. In less than 12 months the London based Property Owners Unit has quadrupled in size and the Property Owners account has grown dramatically. From a standing start 12 months ago NIG now boasts an impressive client list and four £ 1 m+ Property Owners broker partnerships. NIG will launch another product, Essential Property Owners, aimed at smaller portfolios. It will be available exclusively to Premier Property Owners broker panel and NIG First brokers. Read the full article 46 © Internal Consulting Group 2015

Products Category Innovation Description Seamlessness between commercial and retail customers 2 (PS-02) A residential and commercial landlords product APC will replace its current Property Owners products with the launch of a new residential and commercial landlords product to help brokers to benefit from the forecast long-term growth of this sector. New products will cover 700 different types of occupant risks up to £ 5 million sum insured any one location. The new products will be available via APC’s on-line trading platform, Quote. Mac. APC underwriting director, Ian Russell said: “This is certainly the right time to launch new residential and commercial let products to support our brokers. With experts predicting a continual rise in demand for residential let property it is essential that brokers have access to the best products to help retain existing and win new landlord clients in this tough economic climate. In the commercial let sector, although the recession is holding back growth somewhat, the demand for quality cover is also remains high as investors look to protect their assets. ” Read the full article 47 © Internal Consulting Group 2015

Products Category Innovation Description Bundling of solutions 1 (PB-01) Amalgamate the property and liability insurance sectors with the engineering insurance sector to the benefit of SMEs NIG has amalgamated the good work of the property and liability insurance sectors with the engineering insurance sector to the benefit of SMEs with some innovative additions. Gone is the need to have a number of policies. Segmented variations will certainly benefit the niche markets of manufacturers, wholesalers and retailers to meet the needs of each sector. Brokers will benefit by being able to offer more bespoke wordings, with enhanced inner policy limits with optional uplifts. Each industry segment policy has improved wordings which will help the broker and insured alike to have a wider and clearer understanding of what is being sold and purchased. One big selling point for brokers is this policy is warranty free (now conditions precedent). Key benefits Commercial Combined is the NIG core wording for SMEs with segmented variations: manufacturers combined, retailers combined and wholesale combined. Significantly enhanced inner policy limits with optional uplifts designed to meet the needs of each industry segment. Warranty free (now conditions precedent). Embedded legal expenses cover and a new option for fidelity guarantee. Liability covers automatically include corporate manslaughter. Wider engineering wording including new machinery movement and hired in plan extensions. Read the full article 48 © Internal Consulting Group 2015

Products Category Innovation Description Bundling of solutions 2 (PB-02) Combined Marine Cargo and Marine Stock Throughput policy RSA has claimed an industry first with the launch of its combined Marine Cargo and Marine Stock Throughput policy. According to the insurer, 
the product is the first in the marine market not to incorporate institute clauses. Traditional marine cargo 
policies reference the institute clauses which can be difficult for non-specialist brokers 
to decipher. The policy, the insurer claimed, is particularly suitable for brokers not used to dealing with traditional marine products. There are no eligibility criteria; brokers just need an RSA agency to trade. Read the full article 49 © Internal Consulting Group 2015

Marketing Category Innovation Description New niche 1 (MNN-01) Cover for driving instructors The contract involves Garratts bringing a new insurance provider, Enterprise Insurance Company, into the niche market, which it claimed would enable Glasgow-based C&A Mackie 
to significantly strengthen 
its operations. According to the broker, the contract is worth £ 500, 000 and will involve providing cover to more than 1, 000 driving instructors. This is an example of opportunities for affinities and schemes, eg. NRMA now has a driving school “C&A Mackie insures 5, 000 driving instructors across the UK and was keen to add a further insurance provider to the existing panel in order to manage its risks more effectively, ” explained Richard Garratt, a director at Garratts. “We used our market knowledge and expertise to approach Enterprise, which has not, until now, had a presence in this segment of the market. As a result, C&A Mackie has been able to access an additional provider, and Enterprise has seen its business develop into a fresh sector. Read the full article New niche 2 (MNN-02) Website to help charities Meanwhile, at the other end of the process, third sector insurance specialists D E Ford have launched a website to help charities “spend less time on insurance and more time fundraising”. The new website allows charities with a turnover of less than £ 500, 000 to source quotes and buy cover. Chris Greenall, director of D E Ford, said: “We are excited to be working with Ecclesiastical to offer this new service and would urge charities to take advantage of this no obligation website to help find an efficient solution for what they need. It’s our way of continuing our ongoing charity support. ” Read the full article 50 © Internal Consulting Group 2015

Distribution Category Innovation Description Customising a channel to a particular customer segment 1 (DCC-01) Specialist services for agriculture Farm. Web is the national network of agricultural intermediaries whose policies are underwritten by commercial insurer NIG. Farm. Web was formed in 1996 and only deals with specialist agricultural brokers. The Farm. Web Underwriting Centre in Gloucester has recently been restructured to mirror NIG's other regional underwriting centres. Farm. Web was formed in 1996 and only deals with specialist agricultural brokers. Working with NIG they have recently strengthened the team bringing in more skilled underwriters, allowing them to give brokers an excellent service with quick access to knowledgeable decision makers. Read the full article Portals > white -labelling 1 (DPW-01) Private-label portal for agents 5 Star devises the insurance product a particular retail agent is seeking with pricing and policy forms through binding authority on behalf of its main partners at Lloyd’s of London, AXIS Capital Holdings Ltd. and Allied World Assurance Co. Holdings A. G. “The portal can be used either in-house to help run the program within the retail agency, or we can private-label it for the retail agent to be sold directly to insureds. ” Mr. Ottley said. “Although the whole site is managed and run by ourselves, it looks and feels as though it’s a part of either the (insureds) or the retailers. ” The website, which offers E&O and employment liability coverage in all 50 states, can accept applications online and quote various options based on applicants’ input. Read the full article 51 © Internal Consulting Group 2015

Underwriting Category Innovation Description Prioritising improvement opportunities 1 (UIO-01) Global, factbased, property riskquality benchmarking tool Risk. Mark, a global, fact-based, property risk-quality benchmarking tool, allows risk managers to define the basis for prioritizing risk improvement and administer scenarios to maximize the impact of their risk improvement budgets. This web-based analytics tool allows risk managers to: Benchmark the risk quality of their locations Define the basis for prioritizing risk improvement Administer scenarios to maximize the impact of their limited risk improvement budgets. The tool empowers risk managers to: Identify risk using the tool as a bottom-line indicator of risk and the potential for major losses; the adaptation of the metric by users aims to drive and even accelerate risk improvement Quantify risk by facilitating risk identification, risk control and risk assessment and providing the business case for why risk improvement may be necessary. Prioritize risk by allowing users to make theoretical improvements using the online tool to see how those improvements will affect the overall score for a specified facility. Users can see risk quality scores for each of their company’s facilities. They can compare their scores to industry peers/competitors across tens of thousands of FM Global-insured locations around the world and the site’s risk improvement potential and past/projected risk improvement. Read the full article 52 © Internal Consulting Group 2015

Claims innovations by category Technology CT-01: significant front-end claims resolution direct with third parties with use of rules-based technology CT-02: claims transparency and claims tracking CT-03: mutli-channel processing: be able to register a claim by email or by post, to be kept informed online or on a mobile of the status of a claim, and to have a personalised contact in call centres CCV-01: claimants receive service based on their lifetime value Customer value 53 © Internal Consulting Group 2015

Technology solutions being considered to address issues faced in claims management 54 © Internal Consulting Group 2015

Technology innovations by category New tools Platform integration TPI-01: Complete underwriting guide, rating and policy administration system TPI-02: Motor fleet telematics TNT-01: accident event recorder TNT-02: adaptive systems TPG-01: redesigned agent portal TPG-02: quick quotes and a pay online feature for special events coverage TPS-01: blog using humour 55 Portals © Internal Consulting Group 2015

Technology Category Innovation Description Platform integration 1 (TPI-01) Complete underwriting guide, rating and policy administration system Integrated Platform is a complete underwriting guide, rating and policy administration system that supports multistate, multilocation and multiline processing. This could challenge the assumption that expertise is always people-based Platform integration 2 (TPI-02) Telematics for motor fleet Launched in 2010, Western World says it is the first carrier to offer a Web-based product in the surplus lines marketplace that provides the flexibility required for writing nonadmitted risks while also optimizing efficiency for the entire underwriting process within a single system. Read the full article Aviva has decided to dip its toe back into the telematics pool with motor fleet but its fingers are obviously still feeling that burning sensation as it is not ready to return to the consumer domain, yet. Read the full article 56 © Internal Consulting Group 2015

Technology Category Innovation Description New tools 1 (TNT-01) Accident event recorder The Accident Event Recorder program provides commercial transportation insurance customers with a valuable loss-control tool that can record both video and audio when a driving incident occurs, can help to improve driver performance, reduce accidents and save lives. Read the full article New tools 2 (TNT-02) Adaptive systems Mr Chuck Johnston of Oracle Corp explores the main concerns of insurers today and urges them to adopt adaptive IT systems so as to be swift and agile, necessary traits for survival today. This is especially so with the changing business environment challenged by both manmade and natural disasters. Change is coming, and insurance companies must be ready to move with it or be left behind. Adaptive systems can help the business move in whatever direction it needs to go, no matter how unexpected the change. 57 © Internal Consulting Group 2015

Technology Category Innovation Description Portals > general 1 (TPG-01) Redesigned agent portal Capitol Insurance Cos. has a redesigned agent portal that provides quicker information to agents. The enhancements are based largely on customer suggestions on how to make working with Capitol easier. New features include a revamped home page with easy navigation; rotating announcements with sales opportunities and information; an optimized underwriting guide; My Quick Link for saving frequently used information; and online claims reporting. Portals > general 2 (TPG-02) Quick quotes and a pay online feature for special events coverage Philadelphia Insurance Companies (PHLY), a leading property and casualty insurance company for the special events industry, now offers online quotes for Special Events insurance coverage. The new, easy-to-use service provides quick quotes and a pay online feature for special events coverage through the company's website, www. phly. com. "Our convenient online system allows agents to apply, bind and pay for Special Events coverage, " said Assistant Vice President of Underwriting Bob Battaglia. "It provides a faster, more efficient turnaround time on quotes. " Currently, the system can accept submissions for General Liability and Liquor Liability. Additional coverages, including Property, Auto, Inland Marine, Crime, and Umbrella coverage cannot be submitted through the online system. These lines of business can still be submitted to PHLY through normal channels. Eligible classes include social events, sporting events/competitions, musical events, trade shows, educational events, fairs, festivals, and many more acceptable classes. Agents can obtain quotes by logging into My PHLY on PHLY. com and selecting "Quotes" on the left side of the screen. Read the full article 58 © Internal Consulting Group 2015

Technology Category Innovation Description Portals > social media 1 (TPS-01) Blog using humour Connoisseur Underwriting, an MGA focused on antique and fine art dealers, auctioneers and collectors, has revamped its website with online product and policy information, such as forms and key fact sheets, along with a new blog. John Wakefield, director of Connoisseur Underwriting, commented: “We have worked hard to make life easier for our brokers throughout the UK and Ireland, at the same time as bringing an interesting, informative and amusing dimension to our website. ” Read the full article 59 © Internal Consulting Group 2015

Technology: opportunities for mobility in the insurance value chain 60 Source: Vertical Snapshot: Mobility in Insurance , Tata Consulting © Internal Consulting Group 2015

Additional Material Section 4 61 © Internal Consulting Group 2015

Additional material Reference Source Of particular interest Approach your risk with clear direction: 2011 insurance market midyear update Marsh, July 2011 pages 5– 7 Appendix — Pacific report, all Appendix — US report, pages 12– 13 Strategy matters: driving claims to the next level of performance Ernst & Young, December 2011 pages 45– 54 Against the grain 2011 Gemini Vehicle Solutions, December 2011 A series of guest articles from expert commentators designed to stimulate fresh thinking and innovation in the motor claims market Brazil market presentation Lloyd’s, October 2011 Section 5: opportunities UK market presentation Lloyd’s, October 2011 Section 3: opportunities The Big Idea: The value of Twitter to business marketing Peninsula, UK A short article on the benefits of using Twitter for business Japan Earthquake: Insurance Industry Impact and Risk Management Lessons Towers Watson, April 2011 pages 5– 7 62 © Internal Consulting Group 2015

Internal Consulting Group Unbundled consulting Project support Capability building Professional association www. internalconsulting. com 63 © Internal Consulting Group 2015