Risk management – a journey from the merely unlikely to the totally unpredictableEnrico Bertagna Head of Southern, Eastern Europe & Africa General Representative for Italy

II Università di Napoli15 April 2012

WHAT Is lloyd’s?

1400s

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1688 2013

Lloyd’s established

1600s

1700s

1800s

1900s

2000s

20131805

Lloyd’s and Nelson

20131800’s

Entrepreneurialism in the 19th Century

1600s

1700s

1800s

2000s

2010s

Lloyd’s is a catalyst forInnovation

Themotorcar TerrorismAviation Commercial

space flight

Lloyd’s firsts

Otherfirsts

•contract Certainty

•Reinsurance

•claims academy

Role ofInsuranceIn society

Lloyd’sinsures against

natural disasters around the world

and its devastating consequences

covering everythingfrom injury to

property damage

Whateverthe force of

nature

Crucial to society

Imagine a worldWithout insurance

insuranceIs notbanking

Insurance is pre-funded

Banks lend before they borrow

Standards

Franchise structure

Risk Management

What we learnt

Underwritingdiscipline

2012 financial results

91,1%

Despite claims from superstorm sandy (€ 1,7mld)

Profit before tax

Combined ratio

€ 3,41 mld

How themarketworks

A dynamic and diverse market

As at 31 December 2012, the Lloyd’s market was home to 57 managing agents that manage 87 live syndicates.

Source: Lloyd’s Annual Report 2012

Market structure

Source: Lloyd’s Annual Report 2012

Our unique structure creates a market based on trusted relationships and expertise

The risk

The broker

Theunderwriters

The capital

The policy

Claims paid

The risk

The broker

Theunderwriters

The capital

Claims paid

The policy

The world isA Risky place……insuranceUnderstanding risk

THE SCIENCE OF RISK

InsuranceA second pair of eyes

Top 10 Risks

0 1 2 3 4 5 6 7

10. Strict Regulation

9.Corporate Liabil ity

8.Infl ation

7. Price of Material Inputs

6. Availabil ity of Credit

5. Changing Legislation

4. Currency Fluctuation

3. Reputational r isk

2. Talent Shortages

1. Loss of Customers

Preparedness Priority

TOP RISKS REGIONALLY

Lowest 10 Risks

0 1 2 3 4 5 6 7

50. Volcanic Eruption

49. Space Weather

48. Threats to biodiversity

47. Drought

46. Windstorm

45. Regime Change

44. Earthquake & Tsunami

43. Expropriation

42. Flooding

41. New Technology

Preparedness Priority

The Insurers of the future

Security Global Reach foresight

Lloyd’s to be the global centre for specialist insurance and reinsurance

Growing premium income from established markets in line with their economic growth with greater growth in new markets.

By 2025 Lloyd’s will be the global centre for specialist insurance and reinsurance

A more diversified capital base, with a greater contribution from high growth economies.

By 2025 Lloyd’s will be the global centre for specialist insurance and reinsurance

A truly internationalised underwriting community.

By 2025 Lloyd’s will be the global centre for specialist insurance and reinsurance

A broker market, utilising brokers’ international networks.

By 2025 Lloyd’s will be the global centre for specialist insurance and reinsurance

With powerful overseas hubs in certain major overseas markets.