If you’re still printing out forms or sending emails to sort out surety bonds, you are living in the past. Thanks to rapidly evolving digitalisation, the insurance industry has moved on from traditional ways of doing things. From underwriting and online portals to support tools and digital signatures, it’s a whole new world out there. Technological advancements are reshaping established practices and heavily influencing the way things are done across the industry, including in the surety space.

Online portals

 According to Kutlwano Ngwarati, Head of Data & Analytics for Lombard Guarantee, the transition to online applications for surety bonds offers clients improved convenience and accessibility.

“Digital platforms enable clients to submit applications, track the status of their requests and make enquiries regarding their bond facilities from anywhere, at any time,” she says. “This self-service approach not only enhances client satisfaction but also accelerates the underwriting process by reducing administrative overheads and processing times.”

Today’s apps are extremely user-friendly, with digital forms making the process a lot easier than traditional paperwork. In addition, online platforms automate a lot of the work, such as checking information and calculating risk, allowing underwriters to process bonds a lot more quickly.

Clients also receive real-time updates, allowing them to track their applications as they progress through the system.

Ngwarati says online portals really come into their own when it comes to big projects.

“Facility and bond applications can get complex depending on the industry the clients operate in,” she says. “With all the paperwork and specific rules involved, things can get complicated. Online platforms keep all the relevant details organised, ensuring fewer mistakes are made and delays are kept to a minimum.”

Data-driven underwriting

Surety providers are increasingly recognising the value of leveraging data analytics and science to inform their decision-making processes regarding the risks they assume.

“Guarantee providers need to incorporate a range of analytical tools into their data-driven strategy,” says Ngwarati. “This includes geospatial analysis, social sentiment analysis, ESG dynamic pricing, predictive modelling and customer insights.

“By scrutinising extensive datasets of financial, market and historical information, we gain a more rigorous and closer understanding of our bond exposure. These insights allow us to assess risk more accurately, competitively price bonds, proactively manage our portfolios and improve overall efficiency.”

The integration of data analytics also speeds up the underwriting process, enables real-time risk monitoring, and enhances operational efficiency.

“Tools like Power BI translate complex datasets into interactive visualisations such as charts, graphs and maps, making it easier for underwriters to access patterns, trends and anomalies in a fraction of the time it would take traditionally,” adds Ngwarati. “These tools also allow us to integrate advanced technologies such as optical character recognition, machine learning and digital workflow throughout the underwriting value chain.”

The image below is a visual representation from The Deloitte Center of Financial Services and Deloitte Consulting LLP of how exponential data and technology are being used to reimagine the underwriting value chain:

Automated underwriting and decision support tools

In conjunction with data-driven underwriting, automated underwriting systems and tools help to boost efficiency, cost savings, accuracy, scalability, customer experience and risk management, particularly for small to medium risks or exposures.

“These tools streamline underwriting by automating tasks, thereby minimising manual work and reducing operational expenses. The system scales to meet fluctuating demand, ensuring consistent service quality, providing faster turnaround times and improved transparency.”

Digitally signed bonds

Electronic signature workflows eliminate the need for physical signatures, document shipping and manual processing. This leads to faster bond issuance and reduced turnaround times.

“E-signed bonds offer a significant benefit within the surety industry for guarantee providers, beneficiaries and clients alike,” says Ngwarati. “For guarantee providers, e-signed guarantees or bonds streamline administrative processes, reducing the time and resources required for paperwork and manual handling. This efficiency translates into cost savings and improved operational effectiveness.

“Additionally, electronic signatures enhance security and authenticity, mitigating the risk of fraud or errors in the documentation process.

“The digital nature of these documents also shortens the verification and processing time, allowing clients to access their guarantees – and thus start their projects – far more quickly.”

Ngwarati believes certain players in the surety industry have been slow to adopt digitalisation.

“Embracing innovation and digitalisation is paramount for staying competitive and meeting industry needs,” she concludes. “As the industry continues to evolve, stakeholders must keep an open mind and adopt user-friendly technology that enhances our value proposition and ensures customer satisfaction across the board.”