Do You Ever Wish You Had a Crystal Ball When Evaluating Capital Resources in Surety Underwriting?
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Do You Ever Wish You Had a Crystal Ball When Evaluating Capital Resources in Surety Underwriting?

Imagine a “crystal ball” in the world of surety underwriting: not only would companies improve the accuracy of their analytics, but they would have a predictive model upon which to base future strategies. Although there is no crystal ball in the world of surety, it is possible to expand the quality of evaluation of capital resources in surety underwriting with the right solutions at your disposal.

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Evaluating the Capital Resources of the Bond Principal

In the three Cs of surety underwriting—character, capital, and capacity—it’s hard to argue that any role is more fundamental to the process than that of capital. When a contractor on a large construction project can show sufficient capital to complete the project successfully on time and within the budget, including any adaptations and changes that might arise along the way, the surety underwriter can be optimistic it will be completed. Without it, the bond request might be turned down altogether.

Understanding Capital Resources by Effectively Managing Data

It is essential to understand capital. There is a significant amount of data input typically needed to properly evaluate the financial capital of a principal. In turn, this means consuming a large amount of resources for the surety underwriting process—making it both time and labor-intensive.

Older surety systems are difficult to integrate, and they don’t necessarily provide the desired results sought by the surety or brokerage. The result is lackluster performance with great amounts of inefficiency costs along the way.

N-Surety’s Surety as a Service architecture functionality reduces the overall labor load of data input for capital variables. This leads to a better understanding of the surety process as it happens, including the fundamentals of a principal’s capital, saving time and improving processes.

N-Surety’s easy upload capabilities—as well as the ability to calculate financial ratios—are clearly important. Most current systems available to sureties are very manual entry intensive across multiple systems simply to generate a single bond. These same systems tend to be older and unable to adapt to today’s digital technology.

Because N-Surety comes with a stakeholder portal, it’s also adaptable for agents and brokers. The stakeholder will have 24-hour access to the surety bond system, keeping the process open and flexible. The dashboards present throughout will provide quick information about the status of the bond or construction process.

Tackling the Challenges with Better, More Actionable Data

Agile surety systems must have the ability to analyze traditional data sources as well as integrate predictive analytics. NIIT Technologies’ Digital Foresight analytics engine can be integrated with N-Surety to enhance underwriting predictive analytics capabilities.

This is especially important given the intensive nature of the financial analysis that goes on from the underwriter’s side. Identifying trends and potential issues down the line isn’t easy—it is common for a surety to request quarterly financial statements from bonded principals, for example.

By choosing to integrate N-Surety’s underwriting function with the Digital Foresight analytics engine, a surety underwriter will have a better perspective from which to evaluate capital.

Foremost on the list of advantages of employing this combination is the ability of an analyst to project challenges and risks as the project makes progress. Although no individual analyst has a “crystal ball,” the more educated the guess is, the more accurate the surety underwriting process will be. These same analytics are of great value to all parties involved—contractor, oblige, and agent.

With Digital Foresight putting better, more actionable data in front of the user requesting the analytics, the interaction will be much smoother. It can serve as an automation workflow driver based on the business rules associated with the analytics themselves. In essence, Digital Foresight will give surety underwriters the point of service support they need to turn to in finding answers.

 

N-Surety allows companies to automate workflows, process bonds more effectively, enhance risk management, and optimize data analytics. Learn more about how N-Surety can improve your processes for evaluating capital resources.

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