Midwest Region E & O Mitigation

C O N F I D E N T I A L

Process Rollout

E & O Early Mitigation

Why are we here?

- Hard market = increase in E & O frequency not so easy to “fix” mistakes

- Raise awareness to the seriousness of this issue

- Change in our culture: reporting and resolving

Today’s agenda:

- Raise awareness about the magnitude of this opportunity - via videos

- Rollout new “E & O Mitigation Process”

Proactive in reporting……proactive in resolvingProactive in reporting……proactive in resolving1

E & O Early Mitigation

1) New approach to prevention: Early reporting of potential situations

E & O defined:“Anything we did or failed to do that could or has created negative financial impact to the client.”

What should I report?

When in doubt: report it.report it. Our goals are to: 1. change the culture in terms of what we report 2. remove the stigma surrounding E & Os.

When should I report?

- “Knowledge of” starts the clock

- Anytime a colleague feels an E & O situation may exist, the incident should be verbally reported to their department manager immediately

- Formally report to department manager and E & O Mitigation coordinator, using the E & O form, within 3 business days.

Any client inquiry that hints at the possibility of an E & O..…report ITAny client inquiry that hints at the possibility of an E & O..…report IT 2

E & O Early Mitigation

1) Early Reporting cont.

Changing the reporting culture:

Legal currently categorizes E & Os as: circumstances, claims and lawsuits.

Midwest is tracking a fourth category: No Fault Placement Failure: Placement is not bound or some aspect remains open: T & Cs, limits, coverage gaps, etc.

NFPFs: (two types: red and yellow)

- Red: Help is needed to mitigate, must formally report in 3 business days

- Yellow: Types: (No promises to client - client informed) trying to fill a layer, punitive wrap-arounds and delays in receiving binders; must be formally reported in 10 business days if not resolved

If we have informed the client in writing that all of their wishes could not be accomplished, and they agree and do not desire Marsh to continue to pursue the differences - this would NOT be a NFPF situation

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E & O Early Mitigation

2) Assigning Ownership via Ad Hoc E & O Committee Ownership:

1. EOM coordinator is notified of potential E & O. (EOM - Sr office claims person) 2. Upon receipt of “Report to Counsel” form, EOM schedules Ad Hoc E & O

Committee meeting as soon as possible. - This committee should consist of Sr. office level management, taking into

consideration all aspects of the E & O incident. Potential representation from:

- appropriate departments- claims/legal

Ad Hoc Committee to:- assess situation – client relationship- fight fires as needed- assign owner, establish next steps and reporting rhythm- informally share E & O learnings with their area

Early intervention and ownership will drive resultsEarly intervention and ownership will drive results4

E & O Early Mitigation

3) COMMUNICATION of process changes and raise AWARENESS: MANDATORY Office-wide or department meetings

Reporting catch-up period:

Once the Mandatory Office-wide or department meetings have taken place, all colleagues will have a 30 day reporting catch-up period during which reporting will be encouraged to work towards three things:

1. Initiate a cultural change around reporting E & Os 2. Determine areas in need of training3. Develop a baseline of activity

Regional quarterly email to EOMs and Office Heads:- provide data on what has been reported- educate or raise awareness on what is being reported- to encourage reporting

This network will assist in implementing process changes and lessons learned

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