Distinctive. Choice. 21 SEPTEMBER 2010 JLT Investor Seminar

21 SEPTEMBER 2010

Distinctive. Choice.

JLT Investor Seminar

21 SEPTEMBER 2010


Growing Aerospace Business

Alan Griffin

Chairman/CEO, JLT Reinsurance Brokers Limited

Our world of “Aviation” – Size and Shape

Aircraft Operators • Large aircraft:

• Small aircraft:

25,814

9,393

16,092

439,253

39,981

72,658

- Jets

- Turboprops

- Bizjets

- Fixed Wing

- Helicopters

- Others

Manufacturing • Large aircraft:

• Small aircraft:

• Components:

33

21

100’s

1,000’s

- Airframe

- Engine

Service and Repair • Repairers: 1,436 (approx.)

Others • Airports: 9,300

Our world of “Aviation” – The Insurance Buyers

Premium Income (USD Bn)

In Scope (USD Bn)

Aircraft Operators• Commercial, private,

pleasure, corporate, agriculture, surveying, police, medivac, government

4.5 3.1

Manufacturing Service & Repair• Engines, Components

• Civil, Military, Space0.8 0.7

Others• Airports, Air traffic control,

Fuelling operations

• Banks, leasing companies and others

• War

0.7 0.7

6.0 4.5

Available Brokerage

• Estimated brokerage available from target sectors– USD 250 million (GBP 160 million)

Aerospace Brokers – A History

Big 3 dominatedFor the last 15 years Aon, Marsh and Willis have shared between 75% and 80% of the business

Small share pre-2004Prior to 2004, JLT had a market share of around 2.5%

JLT become 4th LargestAfter the acquisition of Heath Lambert Aviation in 2004, JLT became the fourth largest broker with a share of circa 10%

A Simple Objective

“To become the leading aviation insurance broker by any measure”

A Strong Springboard

• We had:– A recognised brand– A strong balance sheet– Shareholder pedigree– Recognised leadership– Senior management commitment– A reputation for delivery

Broker Comparison

Based on JLT airline database and known airline account moves

Airline Market Share

As at 1st January 2009

JLT

Strategic Investment Needed

• We lacked:

– Depth of resource

– Distribution

Today’s Global Team

• We have hired senior professionals with proven track records

• We have hired the “next generation” leadership

• Our total dedicated aerospace staff has increased by 40%

• Internationally we are expanding our distribution by having aviation expertise in Group offices (e.g. Singapore, Hong Kong, Taipei, Beijing, Sydney, Jakarta, Dubai, Madrid, Mexico, Rio, Lima, Vancouver, Calgary)

• In the USA we have dedicated Aerospace offices in Herndon, Chicago, Atlanta and Houston

New Wins Since April 2009

Broker Comparison

Based on JLT airline database and known airline account moves

Airline Market Share

As at 16th September 2010

As at 1st January 2009

JLT

Summary

We are on track to meet our objective:

“To become the leading aviation insurance broker by any measure”

“JLT came top in the aviation insurance class which is testament to our growing aviation practice which continues to go from strength to strength.”

21 SEPTEMBER 2010


Delivering Sustainable Growth - Australia

Leo Demer

CEO, Australia & New Zealand

Australasian Operations

• Australasian operations have been a significant contributor to Group profits

Offices ~ 21Staff ~ 850

JLT Australia – Historical Profile

• Historically structured geographically within the region

• Very strong market position in public sector

• But low growth in highly competitive corporate risks business

The Opportunity

• Growing economy

• High-growth sectors including natural resources, which match JLT’s specialist strengths

• Potential to increase penetration in the corporate sector

• Increasing opportunity to market innovative solutions in employee benefits

How JLT is Targeting the Opportunities

1. Restructuring to deliver specialist expertise to high-growth segments, building on the success of London Market initiatives

- Energy and mining

- Aviation

- Financial institutions

- Construction

2. Leveraging strong public sector capabilities to drive growth in corporate sector (e.g. workers’ compensation)

3. Increased focus on employee benefits, transferring UK capabilities including Benpal

Australia Business Mix 2009 Pro Forma revenue

Thistle 23%

Specialty 26% Echelon 10%

Public Sector 38%

Employee Benefits 3%

Opportunities by Operating Division

• Public Sector– Leveraging off our strength in the Local

Authority area to more directly appeal to State and Federal Government instrumentalities. Retains a geographical base.

– Utilising expertise to drive growth in the private sector

– Exploiting opportunities for Australia to export its expertise in public sector type business to other parts of the Group (e.g. Canada)

38%


• Echelon– Exploiting the intellectual capital

developed in the Public Sector for Private Sector including:

• Risk Management• Claims Management• Workers’ Comp /

Employers’ Liability• Loss adjusting

10%


• Specialty– Aligning capabilities to high growth

segments and building out resource

– Re-enforcing collaboration across the Group including joint venture initiatives (e.g. energy)

– Providing clients with access to greater resources and intellectual capital

– Working with other offices to develop a new “Service Approach” which provides 9 tools and services

26%


• Thistle– High volume, low value

business capable of being placed into Thistle underwriting facilities

– The introduction of the Thistle business model

– Expanding affinity marketing products in Australia with new products developed in the UK

23%


• Employee Benefits– Roll-out of innovative

solutions such as BenPal– Transfer of EB expertise to

Australia from the UK– Ambition to add further

resource, both individuals and potentially by acquisition

3%

21 SEPTEMBER 2010


JLT Latin America - Brazil

Vyvienne Wade

CEO, Latin America

JLT Latin America

JLT Offices

JLT Brasil, Rio de JaneiroJLT Brasil, São Paulo

# JLT Sterling Mexico

JLT Colombia Retail, Medellín JLT Colombia Re, Bogotá

JLT Colombia Retail, Cali

JLT Peru Re, Lima

JLT Peru Retail, Lima

JLT Colombia Retail Bogotá

JLT Retail Brazil, Ribeirão Preto

# Lorant

JLT Re Brazil

# - Associates not subsidiaries

Regional Economic Features:

1. Economic Growth – impact of recession, banking crisis

2. Political stability

3. Growing middle class (2002-2008 40m Latin Americans of a total population of 580m lifted out of poverty)

4. Produce commodities and food

5. Main countries Brazil, Mexico, Colombia, Peru and Chile (75% GDP, 70% population)

Latin America

-8

-6

-4

-2

0

2

4

6

8

10

12

2006

2007

2008

2009

2010

*

2011

*

2012

*

Brazil

Colombia

Mexico

PeruFigures in %

* Forecast

GDP growth in JLT LATAM Countries

Peru Brazil Mexico Colombia

ConstructionIndustry/Manufacture

Energy

Group Health/Group Life

Agriculture

Energy

Construction

Industry/Manufacture

Energy


AgricultureAviation

Energy

ConstructionIndustry/Manufacture

Mining

Oil & Gas


Mining

Mining

Oil & Gas

Group Health/Group LifeMiningOil & Gas

Power Oil & GasPower

Telecoms PowerTransport/Roads/Infra

Tourism Telecoms Tourism Structure

Major Economic Sectors within Territories. All economies which have strong growth sector match with JLT Specialisms

for subsidiary LATAM business (Historic)

REINSURANCEAll figures in £ ‘000’sOperation Brazil Peru Colombia Mexico Peru Colombia LATAM REGION

Rev. Actual ’07

Trading Profit ’07

Profit Margin ’07

2,265

261

11.5%

1,910

75

3.9%

4,783

413

8.6%

2,374

(923)

N/A

579

218

37.6%

4,164

1,309

31.4%

16,075

1,353

8.4%

Rev. Actual’08


Profit Margin ’08

2,920

380

13.0%

2,584

310

11.9%

6,270

567

9.0%

2,564

(457)

N/A

1,061

313

29.5%

5,401

2,205

40.8%

20,800

3,318

16.0%

Rev. Actual ’09


Profit Margin ’09

3,400

330

9.7%

3,833

730

19.0%

7,617

1,044

13.6%

3,257

20

0.6%

1,926

787

40.1%

6,244

2,285

36.6%

28,521

5,976

21%

Headcount ’07

Headcount ’08

Headcount ’09

68

64

58

114

82

88

216

230

210

47

31

31

12

13

14

56

52

56

513

472

489

20

07

20

08

20

09

CONSOLIDATED

RETAIL

Brazil Re

N/A

N/A

2,244

780

34.8%

N/A

N/A

32

Additional LATAM revenue to London businesses: 2009 £7.7 million, 12 months to 30/06/2010 £9.1 million.

Profit Margin = Trading Project Margin

1st half 2010 results – showed continuing progress at revenue and pbt line

Regional Financial Statistics

Main Developments since the Beginning of 2009

• Mexico

– restructured ownership of reinsurance business – joined with our retail partners– acquired a small stake in our long term retail partners

• Peru

– continued to improve profit margin– increased market share– innovation – Gas Taxi Finance Scheme (Harvard Business Review)

• Colombia Retail

– continued shift of focus of portfolio towards private accounts– continued to increase market share– continued improvement in profit margin

• Colombia Reinsurance

– recruitment of a couple of senior producers, succession – dominant position for construction risks – won all major construction projects in Colombia in

last 12 months (Reficar US$4.5bn, Hidrosigamoso US$1.5bn, Porce 4 US$1bn, Hidro Ituango US$2.5bn)

– deployment of captives to win and retain large accounts

BrazilMacroeconomic Overview

Key Facts

• 10th largest economy in the world (2009 GDP of US$1.6tn) forecast to be 5 th by the end of the decade

• Population: 192 million – (life expectancy 1980, 61.5 – 2010, 72.3)• High levels of inward and outward FDI (from January to May 2010, US$11.2bn was invested

abroad by Brazilian companies)

Growth Drivers

• Preconditions for growth– Low and stable inflation– Stable currency– Interest rates low by historical standards– Political stability

• Fundamentals– Growing middle class – fuelling domestic demand– Natural resource wealth (oil, gas, agriculture)– Stable democracy– Vibrant private sector following privatisation of major industries (e.g. telecoms, banking) a

decade ago

BrazilGrowth Enablers Match JLT Capabilities

Oil Reserves

• Current Proven Reserves of circa 14bn barrels

• Estimated pre-salt reserves of 50bn barrels

Renewable Energy

• World’s largest producer of ethanol

• Hydro and biomass significant parts in energy mix

Infrastructure Projects

• 857 projects scheduled by 2030 – investments of US$3.8tn

• Government to invest US$492bn through public infrastructure initiatives

• World Cup 2014 and Olympic Games 2016 expected to generate more than US$60bn in investment

Agrobusiness

• 77mn ha cultivated, additional potential 100mn ha

• Largest global producer of sugar, coffee, soya extract, ethanol

Growing Middle Class

• Over 20 million people have moved into “class C” since 2005

• 46% of population middle class

• Rising average incomes

• Significant potential for credit expansion given relatively low levels of consumer borrowing

Specialist Risk & Insurance Expertise

• Opportunities to leverage JLT’s specialist industry expertise in areas such as oil and gas, energy, construction and renewables (e.g. GCube) construction

Innovative Distribution Solutions

• Opportunities to provide innovative distribution solutions for commoditised products (e.g. Thistle)

Employee Benefits

• Opportunities to develop employee benefits presence to serve growing demands for private healthcare from middle-class employees and ageing population

• GDP Growth

• Rising insurance penetration

• Effective regulation (SUSEP)

Brazil: Insurance Market:Low Insurance Penetration: Opportunity

Insurance Penetration (% of GDP)

Sources: Brazil figures from Fenaseg (national insurance association), SUSEP, ANS, IPEADATA. Figures for other countries from Swiss Re.

• Attractive insurance industry growth prospects

3.1% 3.1% 3.1% 3.2%3.6%

12.9%

8.0%

5.2%

3.9%3.4%3.3%

2004 2005 2006 2007 2008 2009 UK US India Chile China

Brazil

Broker MarketBy law brokers must intermediate all insurance/reinsurance

Competitive : 65,000 + brokers

Largest 3: Aon, Marsh, MDS/Lazam – JLT 8th Position Retail (1st Reinsurance)

Total Premium ~ US$ 49 billionNon-Life ~ 22% of total

Life & Affinity ~ 78% of total(2004 – 2009 13% ave. annual premium growth)

Brazilian Insurance Market Premium

JLT Brazil

Progress to date…• extensive new hirings

• increase insurance market awareness of JLT

• restructured business model – no co-brokers

• focus on Employee Benefits and deployment of BenPal

• alignment of reinsurance and retail business

Next steps…• more hirings of specialist experts

• bolt on acquisitions in key areas (likely EB, construction, cargo)

• use of Thistle Model

• develop EB/health insurance business: broaden service product offering and BenPal – unique selling point

Broking market competitive but JLT now well positioned

21 SEPTEMBER 2010


Asia Financial Review

Warren Merritt

CEO, Jardine Lloyd Thompson Asia

Strong Asia Presence

Asian Opportunities

Total Asia: 727

Japan: 29Korea: 23

China: 56

Taiwan: 23Hong Kong/Macau: 162

Philippines: 48

Vietnam: 7

Thailand: 47

Indonesia: 45

Malaysia: 46

Singapore: 241

Present in 12 territories across Asia.

• Combined Population: >2 billion

• Combined GDP: US$12.9 trillion

• Estimated Combined Non-Life Premiums: US$166.7 billion

Continued investment in specialist lines

Specialist strengths of JLT Asia

• Reinvigoration and new investment;

• Hubs in HK and Singapore - FIFO;

• Alignment with growing wealth in Asia;

• Increasing buyer sophistication and demand;

• In-house IT solutions, creating value.

Affinity: • Motor• Phones• Computers

Aviation:• Strong presence• Major growth

Capital Risks:• Bank relationships

• Terrorism

Corporate Risks:• Increasing regional and global needs

Captives:• 9 Captives under management

JLTi:• Leading in house IT developer

Employee Benefits:• RM approach• IT solutions• Hyper Inflation

Energy: • Strong Const Development

• CIA / JIA

Marine:• Marine strategy being formulated

SMEs:• Schemes and facilities developed.

Property:• Major market in Singapore;

• Increasing assets (Int / Reg)

Risk Management:

• Increasing sophistication

• ARC Support

Construction: • Major global projects from KIA, CIA & JIA

Life• Increase in No of HNWI

ProEx:• Emerging local banks• RM focus (M Bar)

Jardine Matheson

The Jardine Matheson Group also includes Jardine Pacific and Jardine Strategic, which are holding companies.

Innovation in Employee Benefits

A major publicly listed bank in Indonesia

• Large Indonesian bank

• 25,000 employees including subsidiary Adira Finance

About the Client

• Increasing costs, particularly relating to medical cover

• Inefficient administration

• Insufficient information

• Lack of RM/Consultancy approach – “Direct”

General Situation

• PHaRMa

• Efficient online administration

• Online administration

• RM via in house medical professionals

• Interactive data mining

• Delivery of cost solution within budget

JLT’s Solution

Strong financial performance

£51.0

£33.6£31.7£29.6

£40.8

£0

£10

£20

£30

£40

£50

£60

2005 2006 2007 2008 2009

£m

Trading Profit: 2005 - 2009

£7.4£6.8

£6.0

£8.4

£10.5

£0

£2

£4

£6

£8

£10

£12

2005 2006 2007 2008 2009

£m

Revenue: 2005 - 2009Financial Highlights

• Consistent growth in a difficult economic environment in contrast to our major competitors

• Revenue increased by 25% while trading profit increased by 29% at Actual Rates and 8% and 13% at CRE respectively (2008 - 2009)

• 1H 2010 on track

• Geographic and Specialty traction with further investments in Human Resources

JLT Investor SeminarSeptember 21st 2010

Adrian GirlingThistle Insurance Services

UK Retail Insurance Broking activities

(JLT Limited)

Non-Advisory division

Advisory operations

Creation of Thistle

2009 Revenues of

£32m

Thistle proforma annualised 2009 revenues of £35m

2009 Revenues of

£20m

Principal aims

• To change the business model- To be an underwriting and facilities distribution

business- Targeting scheme, affinity and small P&C business

• We are not operating as a Broker - The Group’s balance sheet is not used to underwrite

risk

• We will be a marketing led business focusing on the design, underwriting and distribution of insurance products

- Direct, via Affinities and Third Party Brokers- Online, call centre and traditional distribution

• We aim to become an International business of scale, the third leg of the Group

Defining the opportunity

• UK start- But with global ambitions- 2011 target GWP to This is £100 million

• JLT's embedded business- Already identified and transferring- Selective in our approach

• Non JLT brokers- Significant network

• More product to be developed and distributed

• Target client base is growing- Scheme and affinity business

• Acquisitions- We will remain alert for acquisition opportunities

Typical financial model

Introducing BrokerCommission

Insurer Return on capital

Net Written Premium

Thistle typically shares 50% of difference between claims costs and Net Written Premium. Thistle does not share in any losses

ThistleAdministration charge

Chart not to scale

• Capacity for main This facility is provided by Brit- But will be expanded to include additional markets

• MGA facilities continue where appropriate

• MGU Facility year starts 1/6- Profit share accounting treatment as below

• Potential of This is to become Lloyd’s syndicate

Capacity

2009/10 20% 10%50%20%

Binderyear 2009 201220112010

Accounting year

Target Target MarketMarket High volume, low premiumHigh volume, low premium

TechnologyTechnology

UnderwritinUnderwritingg

DistributionDistribution

ProcessProcess

Web based, automated quotes with flexibility to refer to underwritingWeb based, automated quotes with flexibility to refer to underwriting

Third Party Brokers and within JLT direct and via AffinitiesThird Party Brokers and within JLT direct and via Affinities

System enabled with input by brokers/JLT and automated outputs quotes, documentation and claimsSystem enabled with input by brokers/JLT and automated outputs quotes, documentation and claims

CapacityCapacity Insurers but longer term potential to move towards own capital managementInsurers but longer term potential to move towards own capital management

Key drivers

Thistle where appropriate. If not common financial modelThistle where appropriate. If not common financial model

• Managed locally but collaborating internationally

• Sharing processes, operating platforms and underwriting procedures and disciplines established in the UK

International Protocols International Protocols DocumentDocument27th May 2010

International aspirations

International aspirations

UKUK

Australia

UK

Australia

Canada

UK

Australia

Canada

Asia

UK

Australia

Canada

Asia

Latin America

• An Underwriting and Facilities distribution business

• A non advisory business – not a broker• Accessing the full range of distribution

channels- affinity - direct- via third party brokers

• Complemented by strength in online

• Over time of significant economic advantage to JLT.

21 SEPTEMBER 2010


21 SEPTEMBER 2010

Delivering Sustainable GrowthEmployee Benefits – UK & International

Duncan Howorth

International Chairman of Employee Benefits

Agenda

• UK Market – a brief overview

• UK Market – BenPal positioning

• International development– Our network capabilities and management– Development strategy– Key market opportunities– Case study

UK Market Overview

• £1 trillion of assets across 7,000 schemes

• De-risking remains major area of activity

• Market consolidation of advisers continues

• Pensions regulator focus on funding and governance

• Investment solutions increasingly sought from Trustees and Sponsors

Defined Benefits Defined Contribution

• £500 billion of assets; increasing contribution flows; £ 27 bn estimated

• Prime areas of business opportunity are technology, governance and investment solutions

• Membership expansion anticipated on back of auto enrolment

• Increased responsibility for retirement planning on individuals

• Increasingly forming part of a flexible benefit programme

BenPalUK Pensions and Benefit Market Positioning

An enhanced member experience helps employees make more of their benefit programmes, and improves returns on investment for the employer.

• Existing Trust based offline DC scheme for “head office/corporate” staff

• 20% take up; low engagement

• Limited investment opportunities

• New GPP launched with BenPal system

– On-line enrolment, email alerts

– 60% take-up

– Broad investment options

– Strong, positive employee feedback

– Plan now to extend to retail staff

Case Study: Technology Company Case Study: Insurance Company

• New scheme required following sale from a Banking Group

• New GPP launched with BenPal system

– 62% take-up

– Strong employee feedback on new pension plan launch

– BenPal seen by management as core part of setting new employer employee relationship around benefits and reward

International EB Network Development

Network and business development will be lead by:

• Focus on our areas of strength – both capability and geographic

• International BenPal deployment lead by client and market demand

• Close collaboration with JLT International Network

• Risk and Insurance clients will be targeted for business opportunity

EB Network development Approach

International Employee BenefitsKey areas of Opportunity

• Multinational benefits management

• Emerging market health insurance / services

• Multinational benefits services

• International client consulting

Opportunity Description

• Benefits increasingly being coordinated or controlled centrally; BenPal can manage multi country benefits

• Healthcare cover represents 75% of benefit provision spend in some emerging markets

• Multinational pooling and other services targeted

• Services will include audit, stewardship, bench marking, design

Example of International EB Opportunities

• Existing UK BenPal clients 7,000 employees across Europe

• Requirements to extend BenPal into France, Belgium and Holland

• Values a coordinated, single brand benefits strategy with local provision of benefits

• System will deliver global data and management information

Case Study: BenPal deployed to increase awareness of Reward Package

• Implementation of BenPal to promote value of Reward package in Brazil

• Appointment underpins existing EB adviser relationship in respect of Risk and Health

• Anticipate that BenPal will be rolled our regionally

Case Study: Benefits Management System

21 SEPTEMBER 2010


JLT International Network

Mark Drummond Brady

International Chairman of Risk & Insurance



Facts:

• We have owned operations in 36 countries worldwide including 14 of the top 20 largest economic markets and in total, our International Network members are present in 130 countries around the world

• A truly international platform

• JLT International Network Partners provide the core of the whole International Network

• Emphasis on flexibility of service model


In comparison with other worldwide broker networks

Company estimates taken from public information


JLT shareholding = 20%


JLT shareholding = 20%



• Total exclusivity

• Ring-fencing agreement

• New era in S2H relationship

• Co-branding

• New standard for Network

• Expand to include Employee Benefits


Our Global Service Team:

• Specialise in the co-ordination of global programmes

• Act as a focal point to the overseas broker network/ client overseas

• Extensive knowledge of international compliance

• Advice on insurance legislation/practices

• Global reviews

• Multilingual capability

Documents

Distinctive. Choice. 21 SEPTEMBER 2010 JLT Investor Seminar