Digital underwriting platforms are quickly becoming a business necessity rather than a luxury. Gone are the days of double and triple entry, as customers will no longer accept long wait times to receive their surety bond in the mail. Businesses across varying industries and professions need surety bonds quickly, especially to maintain compliance, complete on-site projects and file with their local courts and municipal authorities. The archaic processes that still exist in today’s industry can no longer be endured.
Despite the insurtech movement, the surety bond industry has been largely ignored when it comes to technology. The product is typically a smaller percentage of overall insurance professionals’ books of business, so there has not been a great deal of time or money spent on modernizing processes even though surety bonds remain a profitable and unmistakable source of revenue. The industry has been ripe for disruption for a long time.
Let’s dive into a few ways digital underwriting platforms will undoubtedly transform how carriers and agencies issue surety bonds in the future.
1. Cut processing time by eliminating manual delays
While surety bonds enjoy historically low loss ratios, the same cannot be said for the expense side of the equation. Especially in the transactional space, where ease of access and delivery are king, expenses have hindered progress. End users will often spend time filling out multi-page applications to send to their insurance agent. The agent must then copy this information into a carrier legacy system or send it out for approval. This process can take days when the consumer wants the bond in minutes. All these hands-on efforts and back-and-forth hardly make a $100 premium—even though typically loss-free—worthwhile.
With digital underwriting platforms, processing times are cut dramatically. Agents can be more efficient, and end users receive their surety bond just minutes after submitting their application.
2. Streamline operations through application programming interface (API) integration
Digital underwriting platforms offer various efficiencies to customers, agents, brokers and even carriers. At Propeller, we have developed a front-end system that allows both consumers and agents to interact with our experienced underwriters if needed to quote, bind and issue surety bonds in just minutes. This allows insurance agents to provide a seamless experience to their clients while simultaneously earning their standard commissions. Insurance professionals are completely removed from the issuance and billing process, allowing them more time to focus on what they do best: selling insurance and surety bonds.
API connectivity also helps carriers close the loop to eliminate the final entry of each transaction, which provides efficiencies by streamlining the reporting and revenue recognition process.
See also: Automation 2.0: What's After RPA
3. Guarantee a seamless and efficient customer experience every time
These new underwriting platforms are changing the way the industry operates and are forcing agents and carriers alike to adapt to the new normal. With customer experience driving over two-thirds of loyalty to brands, insurance professionals can no longer wait for the business to come through the door; they must meet the customer where they are.
The end user, whether a contractor, lawyer, mortgage banker or freight broker, is already using the internet to purchase everything else in their life. They are looking for nothing less than speed, ease of use and same-day service.
Oftentimes, people forget that the actual customer in the process is the principal—the person or business buying the bond—not the insurance agent or the underwriter. True digital underwriting platforms will solve the needs of all members of the value chain, which includes the principal and the obligee (the entity requiring the bond). The ability to instantly issue surety bonds increases efficiencies across industries by keeping projects moving, roads open and courts functioning.
Digital underwriting platforms and digital surety bond issuance are here to stay. Successful adopters of these technologies understand that these tools are making jobs easier, not eliminating them. Agents and underwriters who embrace these platforms will have more time to spend on higher-value tasks and clients while letting the platforms underwrite and service lower-ticket items.
Tech-savvy users will find ways to put the technology in customers' hands at the point of sale. At that point, the technology is not only cost-saving but also a revenue generator. Only time will tell the full extent of these digital underwriting platforms' impact on the industry, but if the last several years are any indication, this is just the beginning.