XCHANGING: PROVIDER OF TECHNOLOGY- ENABLED …

XCHANGING:PROVIDER OF TECHNOLOGYTECHNOLOGY-ENABLED BUSINESS PROCESSING SERVICES SERVICES Xchanging Investor Seminar 15 November 20135 o e be 0 3

AGENDA1 9:00 Strategic direction: Trends in the industry; why

technology-enablement? Ken Lever

2 9:15 MM4 Stephen Trainor2 9:15 MM4 Stephen Trainor

3 9:40 Netsett, X-presso; technology for insurance Jim Sadler

4 10:05 Emerging Technologies: Big Communities Murali Nadarajah

10:30 Q&A10:50 BREAK

5 11:10 Xuber Adrian Morgan

6 11:35 Unlocking Growth Stephen Scott

7 12:00 Business Model & Change Programme David Bauernfeind

12:25 Q&A

8 12:45 Roundup comments Ken Lever

13:35 LUNCH

© 2013 Xchanging plc

9 Speaker Biographies

INTRODUCTION AND STRATEGIC CONTEXTKen Lever

THE TIME LINE - MAKING IT HAPPEN

2011 2012 2013 2014 2015

Stop the bleeding

Get fit again

Compete to win

Going for Gold – Stepping up the pace

© 2013 Xchanging plcXCHANGING INVESTOR SEMINAR 20134

TODAY

MAJOR TRENDS – BUSINESS PROCESSING MARKET

Customer expectations

Supply

Service Platform

Industry & Customer

InsightSupply

Technology

Insight

Technology Impact

Our strategy

Technology Enabled Business

ProcessingProcessing

CapabilitiesInnovation


CAPABILITIES

LLOYD’S

c. 2500 PEOPLE TECHNOLOGY

& LONDON MARKET

SERVICES

COMPETENCY CENTRES

XCHANGING ITALY



AGENDA

MM4 Stephen TrainorManaging Director EMEA ProcurementManaging Director, EMEA, Procurement

Netsett, X-presso:Technology for insurance

Jim SadlerChief Information Officer

Emerging Technologies: Murali Nadarajahg g gBig Communities

jCEO, Xchanging Malaysia


AGENDA

Xuber Adrian MorganHead of Xuber

Focusing our service offering Stephen Scott Focusing our service offering Stephen Scott Executive Director, Sales & Marketing

Business Model & Change Programme

David Bauernfeind Chief Financial Officer

Ro nd p Comments Ken LeverRoundup Comments Chief Executive


MARKETMAKER4: BROADENING OUR PROCUREMENT PROCUREMENT OFFERINGSStephen Trainor

XCHANGING PROCUREMENT SERVICES ADDS MM4

SaaS based e-Sourcing technology – expands existing Procurement offering SaaS based e Sourcing technology expands existing Procurement offering

Accelerates Procurement technology strategy

Creates synergies, benefitting both MM4 and Xchanging

W ll diff ti t d i t k t i t lli li tti d di t d Well differentiated: easier to use; market intelligence; supplier vetting; dedicated online support

Builds presence in significant US market

© 2013 Xchanging plc11 XCHANGING INVESTOR SEMINAR 201311

XCHANGING PROCUREMENT SERVICES

Full S2P service capability

High specialist category management capability

Strong brand awareness

No3 Procurement Service provider globally

– Everest ranking improvement (October 2013)


MARKETMAKER4 ACQUISITION

Acquired 20 September 2013Acquired 20 September 2013

e-Sourcing Software-as-a-Service provider

Headquartered in Chicago

S b i ti f d l Subscription fee model

e-Sourcing market estimated at US$1.4bn p.a. globally

Three founding shareholding directors remain with the business

Bolt-on technology acquisition in line with Group strategy

International customer base of c 35 on acquisition and 8 new customers added International customer base of c.35 on acquisition and 8 new customers added since then

© 2013 Xchanging plc13 XCHANGING INVESTOR SEMINAR 2013 13

INDUSTRY AGNOSTIC


GETTING STARTED - MM4 DASHBOARD

Marketmaking24/7 online

support

e-Sourcing Suitesupport

Company Intelligence

Market Insights


EXPANDED SERVICE OFFERING

Xchanging Procurement Xchanging Procurement Services pre-MM4 acquisition MM4

MANAGING INDIRECT SPEND MANAGING DIRECT AND INDIRECT SPEND

Food retailerFood retailer

Car mechanicCar mechanic

Cosmetics manufacturer


DIFFERENTIATION

SUPPLIERBIDS

CUSTOMERNEEDS

Market intelligence and Market intelligence and supplier vetting

Supplier identificationSupplier identification

Event management

Evaluation/decision


ENHANCED VALUE

BUSINESS INTELLIGENCE MARKET INSIGHTS

E‐SOURCING TOOLSMARKETMAKING


MAKING CONTACT – SETTING UP

Client engages MM4 through themulti-lingual

marketmaking/marketmaking/snap-engage feature

Kristina: Hi I’m your online assistant How can I help Kristina: Hi, I m your online assistant. How can I help you?Me: Hi, I would like to run an event on transportation. Can you please help me?Kristina: Hi! I’d be more than happy to assist you with that. Can I give you a call so that we can discuss all of the details?


RESEARCHING INDICES

Client researches commodity oil

prices using market insights

module

Client may also utiliseMM4’s customised market MM4 s customised market

insight reports for more detailed information on

trends current conditions trends, current conditions, and cross-country

comparisons


GATHERING SUPPLIER INTELLIGENCE

Initiate a search on the supply base for transport

services through the company intelligence company intelligence

section


SYNERGIES

S li C t t Supplier Relationship

Management

Contract Management

ServiceSpend & Savings

Management

e-sourcing

Management


GROWTH OPPORTUNITY

...MM4 is easier to use


GO TO MARKET STRATEGY

Enhance MM4 penetration through Xchanging marketing & sales investment Enhance MM4 penetration through Xchanging marketing & sales investment

MM4 drives sales of existing procurement offering

Cross sell to entire existing Xchanging customer base

U lli f MM4 t t Upselling from MM4 to new customers

MM4 low cost entry to new markets, e.g. Australia, Singapore, China, M. East and Latin America


ACCELERATING TECHNOLOGY STRATEGY

Spend Analytics eSourcing eProcurement & Marketplace Contract Life Management

Spend and Savings Management Supplier Relationship Management Integration & workflow Customer Relationship Management

Big Data, benchmarking, MI, BI Vertical Category Managed ServicesInternal portal - SpringboardProcurement Portal


ADDING MM4 DRIVES NEW BUSINESS OPPORTUNITIES

Xchanging MM4Xchanging Full S2P service capability High specialist category

MM4 eSourcing software Market making capability

management capability Strong brand awareness No3 Procurement Service

Business intelligence and market data

E delivery solution provider globally

y

Accelerated savings delivery for existing

customers

Drives S2P technology integration

Significant retained knowledge bank


ADDING MM4 DRIVES NEW BUSINESS OPPORTUNITIES

Expands procurement Creates upsellingprocurement offering and drives growth

Creates upsellingopportunity

Builds ‘stickiness’ between

Xchanging and Builds USpresenceXchanging and

the customerpresence


NETSETT, X-PRESSO; , ;TECHNOLOGY FOR INSURANCE INSURANCE Jim Sadler

OUR INSURANCE MARKET TECHNOLOGY SOLUTIONS

Disrupting Disrupting– Our innovation and technology has, over 10 years, been disrupting

and modernising the London Insurance Market. Our London market platforms are the most sophisticated of their kind in the world.

Global– We are expanding and growing our business by taking what we do

well in London to other insurance markets around the worldwell in London to other insurance markets around the world.

C iti Communities– All our market technology solutions are built around community sales.

This makes them very sticky once a critical mass is established which This makes them very sticky once a critical mass is established which drives down the threat of competition. We are building new solutions and communities enabled by the latest mobile computing


THE LONDON INSURANCE MARKETHere’s how it works…

%%%

%

££££InsurerInsurer

I =100%=100%££ ££ ££££ ££ ££

Client Broker

Insurer =100%=100%££££ ££

££££ ££

Insurer

InsurerInsurer

%% %

££ ££££££££££££ ££ ££ ££PremiumsPremiums££ ££ ££% %££ClaimsClaims

Annual transactions = [6 x #policies] + [6 x #claims]


Annual transactions [6 x #policies] [6 x #claims]

30 XCHANGING INVESTOR SEMINAR 2013

1. DISRUPTING THROUGH INNOVATIONModernising the London market’s back-office

User Interface

rket

iss

ion

London Market Platform

Message Management

Workflow

Ma

rSu

bm

SettlementPolicy Administration Claim Administrationpp

licat

ion

SettlementPolicy Administration Claim Administration

Ap

Document Management

Operational Data

Da

ta

Analytical Data

33milliondocuments

54Bnper year


>8000active users2million

hits per day31 XCHANGING INVESTOR SEMINAR 2013

1. DISRUPTING THROUGH INNOVATIONModernising the London market’s back-office

~270Firms trading

Claims paid 6 x faster© 2013 Xchanging plc

Claims paid 6 x faster32 XCHANGING INVESTOR SEMINAR 2013

1. DISRUPTING THROUGH INNOVATIONThe London Insurance Market Platforms

User Interfacet on User Interface

Message Management

Workflow

Ma

rket

Subm

issio

Workflow

licat

ion


Ap

pl

Document Management

Operational Data

Da

ta

Analytical Data

Disrupting: Our innovation and technology has, over 10 years, been disrupting and modernising the London Insurance Market. Our London market platforms are the most sophisticated of their kind in the world


market platforms are the most sophisticated of their kind in the world.


2. TAKING LONDON GLOBAL

U I t fn User Interface

Message ManagementMa

rket

Su

bmiss

io

Workflow

catio

n


Ap

plic

Document Management

Operational Data

Da

ta p

Analytical Data

D

London Market Platform



50% Efficiency Savings Zero Unmatched Cash/Balances

80% Capital Efficiency from Netting

COO

Operational Efficiency

COO

Operational Efficiency

CFO / CRO

Transparency & Control

CFO / CRO

Transparency & Control

Treasurer

Capital Efficiency

Treasurer

Capital EfficiencyOperational EfficiencyOperational Efficiency Reduced costs Improved quality Accelerated reconciliation

Transparency & ControlTransparency & Control Regulatory competence Transparency of contract

and market performanceVi ibilit d t l f

Cap a c e cyCap a c e cy Enhanced Cash flow and

liquidity management Reduced cost of capital

/ ti t li iditprocess Straight Through Processing Enhanced process

efficiency

Visibility and control of future payables/receivables

Reduced Credit Risk

/contingent liquidity Better control,

transparency cost & execution of FX

I t t d b fit O ti Ri k Fi d T

54Bnper year

traded

11Bnper yearmoved


Inter-connected benefit case across Operations, Risk, Finance and Treasury



BrokerBroker

Insurer

InsurerSettlementBroker

Broker Insurer

Broker Insurer

Broker Insurer



Broker

Broker

Broker

Insurer

Insurer

Broker Insurer

Broker Insurer

Broker Insurer



Broker

Broker

Broker

Insurer

Insurer

Broker Insurer

Broker Insurer

Broker Insurer


New38 XCHANGING INVESTOR SEMINAR 2013


Global: We are expanding and growing our business by taking what we do well in London to other insurance markets around the world


we do well in London to other insurance markets around the world.


3. CREATING A NEW COMMUNITY













Claims Agreement

AAromoCommunities: We are building new solutions and communities


genabled by the latest mobile computing


OUR INSURANCE TECHNOLOGY SOLUTIONSAll our market technology solutions are built around community sales. This makes them very sticky once a critical mass is established which drives down the threat of competition.

~270Firms trading

p

TAKING LONDON GLOBALTAKING LONDON GLOBALWe are expanding and growing our business by We are expanding and growing our business by taking what we do well in London to other insurance markets around the world.

DISRUPTING ANDDISRUPTING ANDDISRUPTING ANDINNOVATING

DISRUPTING ANDINNOVATING

Our innovation and technology has over 10 years Our innovation and technology has, over 10 years, been disrupting and modernising the London Insurance Market. Our London market platforms are the most sophisticated of their kind in the world. NEW VIRTUAL COMMUNITYNEW VIRTUAL COMMUNITY

We are building new solutions and communities enabled


by the latest mobile computing


EMERGING TECHNOLOGIES: BIG COMMUNITIESCOMMUNITIESMurali Nadarajah

© 2013 Xchanging plcXCHANGING INVESTOR SEMINAR 2013 V.241013 120049

OVERVIEW

LEARNING INTERNET OF TICKET PLATFORM

• School in the CloudClassroom of One

THINGS• Emerging Technology

Sector Specific

PLATFORM • First Cloud-based

Platform• Classroom of One • Sector SpecificPlatform• Cost-offloading

BIG COMMUNITYBIG COMMUNITY

CLOUD BASED

CROWD SOURCING CURATION

RATING –USER

FEEDBACKBASED CURATION FEEDBACK


COMPETITIVE ENVIRONMENT

H

IGH

LEM

ENT

ESS

ENA

BL

PRO

CE

LOW

LOW HIGH

TECHNOLOGY ENABLEMENT


LEARNING PLATFORM

VIRTUALCLASSROOM

MOE School in the Cloud

VIRTUALCLASSROOM

IMPLEMENTATION & MANAGED SERVICES

ABILITY BASED LEARNINGINDUSTRIALIZED TEACHING


LEARNING PLATFORM

BIG COMMUNITY

Curated Content

FREE CONTENT CROWDSOURCED CURATION

RATING –USER FEEDBACK

COST OFFLOADING

E bl t h t P t E t d t t More parental

engagement and monitoring

Enable teachers to create content

Parents can access and contribute to

content

Empower students to rate the content and

provide feedback

+ + Cost offloading using content developed

through crowdsourcing


LEARNING PLATFORMCompetitive Landscape and USPs

COMPETITORS XCHANGING USP

Point solution providers Complete end-to-endCloud SolutionCloud Solution

Proprietary high cost Open source software and free content

1Bestarinet -Small implementations 1BestarinetWorld’s largest project


LEARNING PLATFORMMarket Opportunity: Focus on emerging economies – India, SEA, Caribbean

on

World-wide Market Opportunity

USD 220.0 b

US$

billi

o si

ze in

U

USD 73.8 b

Mar

ket

2012 2017Source: Markets and Markets


TICKETING PLATFORMAutofare Collection System

MPOSWEB

PORTAL

MOBILE PORTAL

SELF SERVICE KIOSK

PASSENGER SERVICE

MACHINE


TICKETING PLATFORMCompetitive Landscape and USPs

COMPETITORS XCHANGING USP

In-station equipment Cloud-based virtual appliancesq p virtual appliances

C t tl d ( Contactless cards (e.g. oyster card)

and paper ticketsVirtual tickets via phones

a d pape c e s

Anonymous commuters Monetizable community


TICKETING PLATFORMMarket Opportunity: Value-added Sales

ons

World-wide Market Opportunity

USD 60.2 b

p in

bill

io

USD 47.2 b

rider

ship

Ann

ual r

A

2012 2017Source: Markets and Markets


INTERNET OF THINGS

SMART METERINGSMART METERING

CONNECTED CAR

MACHINE TO MACHINE INTERACTION

CONNECTED CAR

INTELLIGENT BUILDING

• Diagnostic Statistics• Remote Access• Location Monitoring


CONCLUSION ECONOMIES OF SCALE THROUGH SHARED 1 THROUGH SHARED RESOURCES

COST-OFFLOADING FROM

1

2 COST-OFFLOADING FROM CROWD-SOURCING2

HIG

H

NT

IMPROVED QUALITY THROUGH CURATION3

SS E

NA

BLEM

EN CREATING ADDITIONAL REVENUE STREAMS FOR OUR CUSTOMERS

4

PRO

CES

GENERATING INTELLECTUAL PROPERTY5

LOW HIGH

LOW



XUBERAdrian MorganAdrian Morgan

XuberXuber Headlines

• Xuber is based on a firm foundation • Unique, new technology, global offering.• The market is replacing legacy – it’s the right time for Xuber • Limited competition today • Xuber underpins an organisations business • Global capability and partner ecosystem

The Insurance IndustryThe Insurance IndustryXuber provides core processing software to Non-Life Commercial Segment

Non-LifeLife

CommercialInsurance

PersonalInsurance

Future Potential from a Solid FoundationFuture Potential from a Solid FoundationSolid global customer base and successful existing products

20134 New Componentised Software Solutions

Pre-2012Existing Software Products

Component Opportunities

130 40 PolicyXuber

for MGA’s

Policy

130Customers

Elgar

40Countries

Claims Billing

XuberFor

Genius Iris

Brokasure

Brokers

Xuberf

Xuberfor Reinsurers

for Insurers

Xuber Launch16th October 2012

Xuber Suites and ComponentsXuber Suites and ComponentsFull lifecycle processing for Brokers, Insurers and Reinsurers

InsuranceInsuranceBroking

InsuranceUnderwriting

PolicyAdministration

ClaimsAdministration Billing Ceding

Placement Underwrite PolicyAd i i t ti

ClaimsP i

BillingP i &

CedingPlacement Underwrite Administration Processing Premium &Claims

g

Reinsurance Reinsurance Contract Claims Billing Retro-cedingReinsuranceBroking

ReinsuranceUnderwriting

ContractAdministration

ClaimsAdministration

Billing Retro-ceding

Reinsurance

Xuber Suites and ComponentsXuber Suites and ComponentsFull lifecycle processing for Brokers, Insurers and Reinsurers

Analytics andInsurance/Reinsurance

Processing End User Experience

Design StudioInsurance ProductInsurance Product Design and Deploymente.g. Aviation, Marine

The Opportunity – the market is shiftingThe Opportunity the market is shiftingExisting monolithic legacy systems are holding organisations back.

LimitedLocal Market Legacy g ysystems

AgileAgile Multiple MarketModernsystemssystems

The right time for Xuber…

The Opportunity to replace Legacy SystemsThe Opportunity to replace Legacy SystemsWhat the industry analysts are saying…

Core systems investments continueCore systems investments continue to be critical in improving time to market and product flexibility.

More than one-third of insurers are replacing core policy administration systems and about a quarter are

NovaricaSource: Business and Technology Trends: Commercial Lines, a Business and Technology Trends Report,

replacing claims systems, billing, rating and underwriting

NovaricaLines, a Business and Technology Trends Report, Novarica, September 2013. Novarica

Source: US Insurer IT Budgets and Projects 2014, NovaricaResearch Council Report September 2013.

The Gartner 2012 CIO Survey (with 85 insurance CIOs from life and P&C Insurers around the globe) showed thatInsurers around the globe) showed that insurance CIOs legacy modernisation their second most important technology priority for the next three years.p y y

GartnerGartner 2012 CIO Survey

The Opportunity for XuberThe Opportunity for XuberCore software spend approximately £2bn per annum

Non-Life Commercial packaged software spend (2012)*

US & UK account for65% of market65% of market

*Source: PA Consulting, Ovum, Sigma, ABI

Xuber – Competitive LandscapeXuber Competitive LandscapeStill legacy or single market/component providers

S

Company

ApproxSize -People (1)

InsuranceSoftwareLocations

New TechnologyProducts (2)

BrokerSolutions

InsurerSolutions

ReinsurerSolutions

LondonMarketSupport

USAdmitted/Workers CompSupport

ComplexCommercialLines

SMEPersonalLines

Modules Key Strengths

Xchanging(Xuber)

8000 (370)

US, UK, Europe, APAC

2014

PolicyClaimsBillingCedingBroking

Global, single instance multi-currency, complex commercial and Small Commercial Insurance and reinsurance. London Market .

Guidewire 1100US, UK, Europe, APAC

partial Growing PolicyClaimsBilling

US Personal and Small Commercial Insurance. Very strong in Claims and growing in Policy and Billing.

Accenture 250000 US UK Growing PolicyClaims

US Personal and Small Commercial Insurance Core(DuckCreek) (600) US, UK Growing Claims

BillingCommercial Insurance. Core strength rating/pricing

Fineos 350 US, UK Claims Focused on Claims including London Market

Total Objects 150 UK BrokingC di Focused on London Marketj Ceding

CSC 90000 (NA)

US, Europe,APAC

PolicyClaimsBillingCeding

Complex commercial and Small Commercial Insurance and reinsurance.

SequelBusinessSolutions

150 UK PolicyClaimsBillingCeding

Commercial Insurance and reinsurance. London Market

4500 PolicyClaimsNIIT (Room) 4500

(200) UK ClaimsBillingCeding

London Market Reinsurance.

Key CompetitorsKey Competitors Key competitors moving from single market personal insurance

Xuber – Go to Market…Xuber Go to Market…Focused go to market approach

1.Upsell to 130 existing Xuber software customers and to other X h i I t1.

2Xchanging Insurance customers

Targeted UK, US and APAC • London Market2. Insurer and Reinsurer Campaigns for 2014.(Broking and MGA campaigns to follow)

• Assumed Reinsurance• US Non‐Admitted

3.Upgrade Studio technology to support the migration from Xuber and non‐Xuber solutions

UpgradeStudio

4 Implementation Partners support

non Xuber solutions

4. global deployment of Xuber Software.

Xuber software deployment options…Xuber software deployment options…Xchanging can offer Xuber software in several ways:

1. SoftwareOn Premise1.

2. Softwareas a Service (SaaS)

3. Business Processingas a Service (BPaaS)

Future Potential from a Component startFuture Potential from a Component startFull lifecycle solutions enable full legacy system replacement

2013New Software Components

2014New Full Lifecycle Software Solutions

• London Market• Assumed Reinsurance

NewSigning7th Nov

Full system replacement opportunities…

Assumed Reinsurance• US Non-AdmittedComponent

Opportunities…

Policy

CedingPolicy

Ceding

XuberXuberWhat next?

Components New Markets4 New SolutionsExisting Components& Full Lifecycle- London Market- US Non-

Admitted

New Markets- US Admitted- Workers Compensation- Broking

4 New Solutions- Xuber for Insurers- Xuber for

Reinsurers- Xuber for Brokers

Existing Products- Genius- Iris- Elgar

2012 2013 2014 2015+

Admitted- Assumed

Reinsurance- Xuber for MGA’s3 New Components

Elgar- Brokasure

2012 2013 2014 2015+

xubersocialxubersocial

ber comxuber.com

UNLOCKINGVALUEStephen ScottStephen Scott

BUSINESS MODEL & CHANGE PROGRAMMEPROGRAMMEDavid Bauernfeind

XCHANGING’S BUSINESS

BUSINESS PROCESSING PROCUREMENTTECHNOLOGY

Xchanging is a provider of technology-enabled Business i h l d t i Processing, Technology and Procurement services


BUSINESS PROCESSING SERVICES

Well-established, lower risk With a significant annuity

elementC h tiBPSBPS Cash generative In markets growing at rates c.

5-10% Frequently we own the Frequently we own the

technology platform and the IP

© 2013 Xchanging plcXCHANGING INVESTOR SEMINAR 2013 81

TECHNOLOGY

Based on a variety of

TechnologyTechnology

types and lengths of contract

In markets growing at 5-10% TechnologyTechnology10%

Frequently we own IP Requiring investment at

this stageP t ti l f hi h th Potential for higher growth

BPSBPS


PROCUREMENT

In process of ‘stepping

T h lT h l

In process of stepping down’ size of typical contract

In markets growing at >10%E pertise based ser icesP tP tTechnologyTechnology Expertise based services

Requiring investment to enter new markets

Market leading position

ProcurementProcurement

Building/acquiring IT components

BPSBPS

© 2013 Xchanging plcXCHANGING INVESTOR SEMINAR 2013 83


TechnologyTechnology P tP tTechnology Emerging

Technologies: Big

Technology Emerging

Technologies: Big

Procurement MM4Procurement MM4

Technologies: Big Community Xuber

Technologies: Big Community Xuber

BPSBPS Netsett, X-presso; technology for

insurance Netsett, X-presso; technology for

insurance


BUSINESS MODEL

Visibility Growthpotential

Marginpotential

Business Processing Services H M

Technology L H

M HProcurement M H


CHANGE PROGRAMME

COSTHR

IT

PRODUCTIVITYPRODUCTIVITY


ROUND UP COMMENTSKen LeverKen Lever

TECHNOLOGY-ENABLEMENT

S i I d t Service Platform

Industry & Customer Insight

Technology Enabled Business

Processing

CapabilitiesInnovation


Documents

XCHANGING: PROVIDER OF TECHNOLOGY- ENABLED …