2022 Edition

Xenex (Booth #10)

22 Years in the Good Company of the Canadian Surety Industry – Sharing Lessons Learned
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Technology innovation in the Surety Industry continues to be a very trending topic. Almost daily, a Surety Association or Surety Industry spokesperson or Technology Vendor posts a new article suggesting that the Surety Industry needs to be more aggressive in leveraging technology innovations.

Here at Xenex Enterprises Inc., we’ve been walking alongside the Canadian Surety Industry players – Carriers, Brokers/Agents, Principals and Obligees - since 2000 as they deal with world realities and manage the delicate balance between continuous improvement through innovation and honoring the obligation of risk management and certainty.

It’s an interesting dilemma - being an innovator in an industry steeped in tradition and known for its meticulous risk assessment. Technology innovation has become an unsettling presence in every industry and much research has been done to try to understand how technology innovation is adopted.

Drawing from research dating back to the 1960’s and refreshed regularly, adopters fall into 1 of 5 segments when it comes to technology adoption– Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

• Innovators (2.5%) are the first to adopt an innovation, are willing to take risks and have the financial resources to absorb failure.
• Early Adopters (13.5%) make more discrete adoption choices than Innovators.
• Early Majority (34%) adopt an innovation after a significantly longer period of time.
• Late Majority (34%) approach innovation with a high degree of skepticism and only after the majority have adopted the innovation.
• Laggards (16%) are the last to adopt an innovation, hold on to traditions and typically have an aversion to change agents.

I doubt that anyone wants to be known as a Laggard but when it comes to a choice between risk and certainty, the Surety Industry will always favour certainty or at least thoroughly assess the risk. Individual Surety players will fall into one of the above segments – most likely Late Majority and Laggards depending on the particular innovation and its direct impact on the individual player. It’s not a negative attribute, it’s just a fact that technology vendors need to acknowledge and respect.

When it comes to technology specific innovation for the Surety Industry, we’ve observed some real challenges that technology vendors inadvertently aggravate. One such challenge is terminology and jargon. Terms and acronyms like IMMUTABILITY, NON-FUNGIBLE TOKEN (NFT), OPENSOURCE, HOSTING, WYSIWYG, VPN, API, DNS, BLOCKCHAIN are thrown around by Technology Vendors in business conversations. When the conversation is riddled with foreign terms, how would any businessperson be comfortable with the prospect of exposing their organization to such unknowns?

In our experience, Obligees and their processes are deeply entrenched in processes wrapped in protective tradition and proven certainty. When something has worked so well for so long why risk change? When protocol and bureaucracy are so extensive, how can change even happen? Raised seals and wet ink signatures work – why change? It took Xenex years of demonstrations, mock tenders, listening and patiently reassuring the Canadian Obligees that ebonding was in their best interests too – more bids, faster submission review with less manual labour. Once one Obligee agreed to accept eBonds, other Obligees stepped up – some going ‘cold turkey’ with no paper and others adopting a hybrid of eBonds supported by paper backup.

We were regularly reminded that Surety organization decision makers are businesspeople, looking for improvements that offer clearly defined and measurable business benefits. Innovating is hard work and not always rewarding. Shareholders and management demand immediate gratification.

Our experience with the Surety legal community found them in the camp of Late Majority and Laggards. They rely heavily on case law and until an innovation is challenged and wins in court, it represents an unknown and uncertainty – two very unwelcome attributes. In comparison to the Canadian Surety Industry, the US Surety landscape is 50-fold more complicated - 50 plus regional approaches, rules, regulations with a plethora of bond form variations to boot! But even here and perhaps especially here, the benefit of well designed, customized technology innovation is real.

The recent pandemic shook some of Surety’s foundational practices (wet ink, raised seals for example) and reactive steps were taken that are introducing new and unnecessary risk like shipping physical copies of Surety Seals to Brokers/Agents. The Canadian Surety players found their ebond adoption prepared them well to sustain business despite COVID with relatively little impact to the tendering process The Canadian Surety Industry has been a good teacher. Technology innovation must offer visible, measurable and immediate business value and it needs to match the pace and adoption appetite of each client.

Current technology innovations to watch are eBonding and Blockchain. Future innovations include Machine Learning, Robotics, and Artificial Intelligence.


Come and visit us at the May 2022 NASBP Annual Meeting and Expo. Sign up for a free trial subscription of SignatureMaster™. See how one small innovative step can position you for eBonding and the opportunity to initiate digitization of your full bond producing process. Perhaps together we can demonstrate to the Obligee community that fully digitized eBonding is an innovation worth adopting sooner than later.

See you in Palm Desert – Booth #10

PS: for the upcoming year, send us your questions and share your bonding business challenges with us. Together we can explore and find an adoptable innovation just right for your organization!
PPS: Watch this site for more updates on Blockchain


Gabriel Puyana
Business Development Executive
Xenex Enterprises Inc.
416-740-9704 x223