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Request for Proposal

Recovery Services

Associated Marine Insurers Agents Pty Ltd &

Zurich Australian Insurance Limited

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Table of Contents

Table of Contents 2

Executive Summary 4

1. Introduction 4

2. Appointments to the Panel 4

3. Selection Process Overview 4

4. Questions 4

5. Instructions to Proposers 5

6. Lodgement of Proposals 5

Proposals will not be accepted by any other method of delivery. 5

7. Disclaimers and Acknowledgements 6

Request for Proposal (RFP) 8

1. Firm Profile 8

2. Existing and Predicted Capacity 8

3. Quality Control 8

4. Operational Reviews 9

5. Value-Added Services 9

6. Information Technology & Data Security 9

7. Fees and Disbursements 10

8. Key Performance Indicators 11

9. Governance and Reporting 11

10. Due Diligence 12

11. Code of Conduct 12

12. Business Continuity Management 12

13. Insurance 12

14. Privacy 13

Appendix A: Service Standards 14

Appendix B: Operational Reviews Agenda 15

Appendix C: Reporting Template 16

Appendix D: Code of Conduct 17

Appendix E: ZFSA Corporate Fact Sheet 19

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Assessment Team

Lead: Suzi Huynh, Vendor Manager

Team:

Stephen Brooks, Executive General Manager, Claims

Andrew Bunting, General Manager, Claims

Leon Longhurst, Technical Head – Motor, Marine & Property

Simone Mealyea, AMIA Claims Operations Centre Manager

Peter Mackay, National Recoveries Manager

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Executive Summary

1. Introduction

Associated Marine Insurance Agents (AMIA) ABN 41 006 104 007 carries on an insurance business in Australia as

underwriting agent and broker of Zurich Australian Insurance Limited (ZAIL ) 13 000 296 640. Both AMIA and ZAIL are

subsidiaries of Zurich Financial Services Australia Ltd (ZFSA) ABN 11 008 423 372. For more corporate information about ZFSA

please refer to the Corporate Fact Sheet in Appendix E.

This Request for Proposal (RFP) invites you/your firms (Proposer) to tender for all recoveries work arising from AMIA’s portfolio

of claims.

Instructions on how AMIA would like all Proposers to respond to this RFP have been set out below.

2. Appointments to the Panel

Appointments to the Panel are for over two (2) years, commencing 1 August 2012 and ending 31 December 2014.

3. Selection Process Overview

Issue of RFP Monday, 18 June 2012

Last date for questions Friday, 29 June 2012

Last date for lodgement of all Proposals (Closing Date) Friday, 13 July 2012

Communication of result to Proposers (Results) prior to Tuesday 31 July 2012

Shortly after the Closing Date, an evaluation panel drawn from all the interested areas within AMIA (Evaluation Panel) will

convene to evaluate all compliant Proposals. Upon completion of the evaluation process, the Evaluation Panel may decide to

enter into negotiations with one or more Proposers with a view to documenting the terms on which a Proposer will be

appointed to the Panel in a formal agreement executed by the Proposer and AMIA.

4. Questions

All questions in relation to or in connection with this RFP are to be submitted by email to Ms. Suzi Huynh, Vendor Manager at

suzi.huynh@zurich.com.au.

Questions received after 5:00pm Australian Eastern Standard Time, Friday 29 June 2012 may not be responded to.

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5. Instructions to Proposers

All Proposals must:

1. be set out according to the headings in the RFP and each Appendix;

2. conform to the requirements of this RFP;

3. not exceed 10 pages (excluding appendices); and

4. address all issues covered in RFP.

.

6. Lodgement of Proposals

All Proposals must be:

- submitted by email to Ms. Suzi Huynh, Vendor Manager at suzi.huynh@zurich.com.au; and - received by 5:00pm Australian Eastern Standard Time, Friday 13 July 2012.

Proposals will not be accepted by any other method of delivery.

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7. Disclaimers and Acknowledgements

By submitting a Proposal to this RFP, each Proposer acknowledges and agrees to be bound by the terms and conditions of this

RFP, including without limitation:

- that AMIA and its related entities gives no guarantee that any Proposal will be selected;

- that AMIA and its related entities retains the right not to proceed with this RFP at any time;

- that all costs and expenses incurred by a Proposer in relation to or in connection with preparing a Proposal will be the

responsibility of the Proposer;

- AMIA reserves the right to terminate negotiations with a Proposer at any time prior to the entry into a binding written

agreement;

- the cost of services will only be one of a number of factors to be considered when evaluating Proposals, and AMIA

reserves the right not to be bound to accept the lowest price in any Proposal;

- AMIA is entitled to distribute any replies to questions it receives in connection with this RFP to all Proposers

participating in this RFP;

- Proposals received by AMIA become the property of AMIA and need not be returned to a Proposer;

- AMIA reserves the right to accept any Proposal in whole or in part;

- AMIA does not guarantee that a minimum amount of work will be directed to any Preferred Vendor.

- should AMIA not be able to reach agreement with a preferred Proposer, or if negotiations become protracted, AMIA

reserves the right to then negotiate with any other Proposer. In any event, AMIA will not be bound to accept any

Proposal, and an agreement will not be deemed to have been entered into until both parties have executed a binding

written agreement.

- while all reasonable care has been taken by AMIA in compiling this RFP and the contents of this RFP are presented in

good faith, no warranty (express or implied) is given by AMIA as to the completeness or accuracy of this RFP and

AMIA will not be liable (in contract or tort) to Proposers or any other party or person if, and to the extent that, they

rely on any information provided by AMIA;

- the Proposer indemnifies AMIA against all claims, expenses, demands and liability however arising out of any act or

omission of the Proposer in connection with this RFP;

- information provided in this document is given solely for the purposes of assisting a Proposer submit a Proposal and

may not be used by the Proposer for any other purpose.

- AMIA may change the information in this RFP at its discretion and at any time – if AMIA does so, it will inform the

Proposers of any relevant changes;

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- all Proposers acknowledge that this RFP, the preparation and submission of a Proposal, receipt and evaluations of a

Proposal by AMIA does not commit AMIA to award a contract to a Proposer, notwithstanding that the requirements

in this RFP have been fully satisfied by the Proposer; and

- Proposer must not disclose the existence of this RFP or its contents to any third party without prior written approval

from AMIA.

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Request for Proposal (RFP)

1. Firm Profile

The Associated Marine Insurers Agents Pty Ltd (“AMIA”) claims function is looking to improve its recovery rate and

explore alternative options in terms of the management of its cargo marine recovery claims. The engagement of a

proactive and innovative external recovery provider is being sought to assist in the achievement of AMIA’s recoveries

strategy.

AMIA and ZAIL will require the successful firm to appoint a relationship manager who will be responsible for the overall

maintenance of the AMIA/ZAIL account.

Please provide details of the following:

(a) your firm’s profile;

(b) your firm’s experience in the area of marine recoveries, specifically cargo recoveries;

(c) areas of particular specialty, and a short description of the backgrounds, experience (years) and any special

qualifications of the professionals working in each area of specialty;

(d) industry and legal affiliations (e.g. associations with any national or international organisations);

(e) nominated relationship manager, their availability and accessibility;

(f) nominated manager responsible for areas of work including level and range of experience (years) and

expertise;

(g) how conflict issues will be dealt with; and

(h) how your firm would promote the AMIA and ZAIL brand.

2. Existing and Predicted Capacity

Please provide details of the following:

(a) Current numbers of files handled by professionals of your organisation who are proposed to be dealing with

AMIA matters;

(b) Maximum number of files each professional could comfortably handle;

(c) Your firm’s ability and contingencies to deal with excess work beyond your existing capacity; and

(d) Your current quality control procedures and methods employed to ensure compliance.

3. Quality Control

In an effort to achieve best practice and maintain its good claims handling reputation, AMIA and ZAIL have developed

service standards which outline the minimum service standards required for our preferred recoveries provider. A copy of

the current service standards is attached at Appendix A.

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Please provide details of the following:

(a) Confirmation that your firm is able to meet these all service standards;

(b) Your proposal for implementing these service standards when conducting AMIA matters; and

(c) Details of your internal quality control processes to ensure compliance with all service standards.

4. Operational Reviews

AMIA typically holds six monthly relationship meetings and operational review meetings with all Preferred Vendors in

order to provide a general forum for information sharing, feedback exchanges, analysis of data, and updates on any

developments. These meetings are intended to enhance the relationship between AMIA and Preferred Vendors,

encourage an environment of open communication and sharing of ideas.

Meetings will be arranged by the relevant claims managers at AMIA and will follow a set agenda.

Annexed at Appendix B is a copy of the proposed agenda to be followed at operational review meetings.

5. Value-Added Services

AMIA considers their Preferred Vendors as partners and aims to foster a relationship that would mutually benefit all

parties.

We welcome any ideas that you may have as to other value-added services that you can offer AMIA and ZAIL.

6. Information Technology & Data Security

AMIA and ZAIL are continuously striving to improve its claims handling procedures in conjunction with its service providers

by making better use of existing and new information technology.

Please provide details of:

(a) Your firm’s current IT capabilities;

(b) How your firm’s current capabilities will improve communication between AMIA and your firm; and

(c) Your firm’s data security procedures.

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7. Fees and Disbursements

AMIA seeks to obtain the best available legal services at a realistic, competitive and cost-effective price. With our focus on

early resolution, we wish to obtain commitment from your firm to resolving matters at the earliest opportunity.

AMIA acknowledges that in order for any relationship between AMIA and its Preferred Vendors to succeed, the

arrangements need to reflect the business imperatives of both parties. The rates determined through this process will

apply for the duration of the contract term. AMIA endeavours to meet your accounts within 30 days of receiving a

correctly rendered tax invoice.

AMIA are currently considering outsourcing the entirety of the cargo claims recoveries process for the AMIA business.

For this model, the pricing sought is to be made on the following assumptions:

1. The total claim volume reported to AMIA in 12 months is shown in the below table. A portion of these claims will

be valid recovery opportunities and the Firm is asked to base estimated recovery identification volumes based on

the below data:

Total Claim Volume Per Year

Line of Business 2010 2011 2012 (Q1)

CARGO 5640 5404 1654

HULL 315 319 78

LIABILITY 79 108 97

PLEASURECRAFT 246 266 97

MARINE - CARGO 60 41 12

Grand Total 6340 6138 1938

2. That the recovery provider will be required to manage all assigned recoveries from identification;

3. AMIA reserves the right to retain any file(s) at our discretion;

4. If a commission-based model is being considered, it is expected that caps will be in place for larger recoveries.

Based on the assumptions provided above, we ask that pricing options be provided as follows:

Flat fee per file; and

Contingent fee – i.e. a commission payable on each recovery made. This may be split between insured /

uninsured or a flat commission rate.

Should there be any other models / structures that you believe appropriate, please do not hesitate to provide us with more

information and pricing options.

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For the abovementioned model, and any other structures that you may nominate, it is assumed that the following will

apply:

Definitions of ‘insured debt’ versus ‘uninsured’ are to be agreed;

Litigation will be charged out separately;

Registration searches, license searches, police reports will be billed separately; and

The ‘legal’ letter of demand will not incur a charge.

8. Key Performance Indicators

As part of our continuous improvement program to achieve best practice, a regular review of performance will be

undertaken of our Preferred Vendors to ensure service standards and Key Performance Indicators are met. The recoveries

target which the Preferred Vendor will be measured against is a gross recovery ratio of 10% per calendar year for the

cargo portfolio.

AMIA conducts monthly quality assurance reviews on Preferred Vendors and encourages feedback to be provided from

claims staff as to the performance of Preferred Vendors. Results from the quality assurance reviews and claims staff

feedback will be conveyed and discussed at the operational reviews.

AMIA reserves the right (at its absolute discretion) to remove Preferred Vendors that fail to meet service standards or that

deliver unsatisfactory performance.

9. Governance and Reporting

The Preferred Vendor will be required to agree to the following:

The Preferred Vendor must seek authority from AMIA / ZAIL prior to agreeing to any settlement where our

recovery is reduced by a factor of 20% OR MORE

Any matters which require litigation or legal advice must be referred to AMIA / ZAIL so that our preferred legal

panel can be utilized;

Reporting will be required on a monthly basis, utilizing the template at Appendix C.

AMIA / ZAIL to have the right to conduct a technical audit annually; and

Any matters which fall into general average, salvage or piracy claims will require ongoing and case-by-case

authorization by AMIA / ZAIL. This is due to unique internal reporting requirements within our claims protocols.

Your agreement to the above is required. Please note that the above terms will be built into the contract between AMIA /

ZAIL and the Preferred Vendor.

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10. Due Diligence

All AMIA vendors will be subject to due diligence prior to contracts being entered into and periodically throughout the

contract term.

The successful Proposer will be required to undergo due diligence prior to the issuance of contracts. Please provide your

agreement to undergo the due diligence process.

11. Code of Conduct

All AMIA vendors are required to adhere to the ZFSA Code of Conduct policy

Annexed as Appendix D is a copy of the ZFSA Code of Conduct policy.

Please indicate:

(a) Your agreement to adhere to the ZFSA Code of Conduct policy; and

(b) What processes your firm has in place or will have in place to ensure compliance with the ZFSA Code of Conduct.

12. Business Continuity Management

AMIA has in place a Business Continuity Plan which enables its businesses to continue to operate in the event of any

significant event. It is essential to AMIA that our key partners and Preferred Vendor also have appropriate Business

Continuity Plans should any significant event take place.

Please provide high level details of any Business Continuity Plan that is currently in place within your organisation that

would effectively manage any event that may interrupt or adversely impacting your normal business operation.

13. Insurance

AMIA requires all Preferred Vendors to maintain the following insurance coverage:

- Professional Indemnity Insurance for at least $10m;

- Public Liability Insurance for at least $10m; and

- Workers Compensation in accordance with relevant legal requirements.

Note that insurance coverage is to be confirmed as part of the Due Diligence questionnaire.

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14. Privacy

AMIA is required to comply with the Privacy Act 1988. It is our expectation that our Preferred Vendors will also comply

with the Privacy Act 1988 and the ZFSA Privacy Policy. The ZFSA Privacy Policy is available on our website at

www.zurich.com.au.

Please indicate:

(d) Your agreement in complying with the Privacy Act 1988 and the ZFSA Privacy Policy; and

(e) Your processes and procedures to ensure compliance with the Privacy Act 1988 and the ZFSA Privacy Policy.

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Appendix A: Service Standards

The firm will:

1. Complete the first action on an assigned file within three full days of receipt. This requires an initial documented

strategic review of a file in addition to first contact of tortfeasors

2. Complete meaningful contact with a Third Party within three days of file load

3. Complete meaningful contact with any other party (witness, insured, police) within three days of file load

4. In sufficiently complex matters, the firm will verbally coordinate investigation and recovery efforts with the AMIA

claims staff where required.

5. Notify AMIA in the event physical evidence is to be preserved

6. Advise AMIA if any matters are suspected as being fraudulent

7. Attend to any correspondence within three days of receipt

8. Manage all debts in a proactive manner with clearly documented escalation steps in the event recovery is not received

9. Properly document rationale for decisions on files

10. Maintain litigation strategies and budgets where applicable

11. Maintain investigation strategies and budgets where applicable

12. Properly document strategy/rationale for resolution of file

13. On sufficiently complex matters (threshold to be agreed), provide a case summary every 120 days

14. Comply with specific customer process/protocol requirements

15. Operate within stated authority limits at all times

16. Demonstrate proactivity in file management, driving the file to successful resolution with each action.

17. Adhere to, or support the delivery of five key stages of Best Practice claims management as per the following:

18.

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Appendix B: Operational Reviews Agenda

Firm: Attendees: Date:

Item

Discussion

Action

Firm Update

Market Intelligence

Industry Trends

QA Results/Service Standards

AMIA/Zurich Staff Feedback

Conflicts of Interest

Disputes

AMIA/Zurich Business Update

Reporting

Code of Conduct

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Appendix C: Reporting Template

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Appendix D: Code of Conduct

Zurich Financial Services Australia Limited and each related body corporate (collectively “Zurich”) considers it essential that we,

and our vendors, conduct ourselves at all times with integrity and in full compliance with all laws and regulations that govern

our business activities. As such, Zurich has established a set of company standards which is an extension of the Zurich Basic’s

and our commitment to ethical business practices and regulatory compliance.

Zurich expects that our vendors will share and embrace the letter and spirit of our commitment to integrity. We understand

that Vendors are independent entities; however, the business practices and actions of a vendor may impact and/or reflect

upon Zurich. Because of this, Zurich expects all Vendors and their employees, agents, and subcontractors (Vendors’

employees, agents, and subcontractors shall hereinafter be referred to collectively as “Representatives”) to adhere to the

below Code of Conduct while they are conducting business with and/or on behalf of Zurich. All Zurich Vendors should

educate their Representatives to ensure they understand and comply with the Code of Conduct.

1. All Zurich Vendors and their Representatives shall conduct their business activities in full compliance with all applicable

laws and regulations of their respective countries while conducting business with and/or on behalf of Zurich. 2. All Zurich Vendors and their Representatives shall conduct their business activities with integrity in accordance with their

obligations under this specific agreement with Zurich. In addition, all Vendors shall, without limitation:

a) Record and report all business information honestly and accurately, complying with all laws that govern the jurisdictions in which they conduct business;

b) Create, retain and dispose of business records in full compliance with all applicable legal and regulatory

requirements;

c) Protect and responsibly use both the physical and intellectual assets of Zurich;

d) Be prohibited from speaking to the media on Zurich’s behalf in all circumstances and refer any media enquiries to Zurich for comment; and

e) Use good judgment, discretion and moderation when offering gifts and/or entertainment to Zurich employees.

3. Treat all persons equally, without fear or favour, regardless of their race, ethnicity, disability, sex, religious belief, political

persuasion or social standing. 4. Treat all persons with respect and equity. 5. Be truthful and honest at all times. 6. Preserve impartiality and recognise the legal equitable rights of all parties at all times. 7. Where a potential or actual conflict of interest arises advise Zurich immediately and seek instructions before proceeding

further. 8. Not either directly or indirectly receive a gratuity, benefit or reward in connection with any work conducted on behalf of

Zurich without the knowledge and approval of Zurich. 9. Not by word or action, either directly or indirectly, issue critical comment about Zurich in any manner or form.

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10. At all times maintain the confidentiality of any information obtained during the course of any work undertaken, and not discuss with any third party the details of any instruction or document without the knowledge and written approval of Zurich.

11. Not advertise, provide information to the media or promote itself in connection with Zurich without prior written approval

being obtained from Zurich. COMPLIANCE WITH THE ZURICH VENDOR CODE OF CONDUCT

It is the responsibility of the Vendor to ensure that its Representatives understand and comply with the Zurich Vendor Code of

Conduct and to inform its Zurich contact (or a member of Zurich management) if and when any situation develops that causes

the vendor to operate in violation of the code set forth in this document.

Zurich Vendors are expected to self-monitor their compliance with this Vendor Code of Conduct. In addition to any other

rights Zurich may have under its agreement with vendor, Zurich may request the immediate removal of any representative

who behaves in a manner that is unlawful or inconsistent with this Code or any Zurich policy.

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Appendix E: ZFSA Corporate Fact Sheet

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