The gruesome (and grueling) days of painful re-keying of data may be coming to an end. Could data standards be the magic bullet?
NASBP has been touting the value of financial data standards for several years now.
Why data standards? Because they are a proven tool to eliminate manual data entry and automate data collection in the surety underwriting process. Standards free up bond agents to better serve contractor clients, giving them faster access to credit. Standards allow carriers to focus on providing the most appropriate surety bonds, basing their analysis on more timely, detailed data about the financial health of the contractors they bond.
NASBP is a member of the XBRL Surety Working Group, which formed in late 2015 to explore the possibility of standardizing the Work-in-Process (WIP) report. This initiative is an offshoot of the NASBP Automation and Technology Committee, which has a stated objective to “employ technology to streamline processes."
Other members of the working group include AIG, Altova, Crowe LLP, DataTracks, The Hartford, Liberty Mutual, Marcum LLP, Oracle Corporation, SuretyWave, Travelers, and Zurich Insurance. Observers to the group are the Construction Financial Management Association (CFMA), The Surety & Fidelity Association of America (SFAA), and the Financial Accounting Standards Board (FASB).
In 2016, the working group introduced the first release of data standards for the WIP report. In 2017, The Hartford successfully brought standardized WIP reports into their internal financial management system, reducing WIP report processing from 20 minutes to 3 seconds. And earlier this year, two more software providers enabled their applications to prepare XBRL-formatted WIPs. Crowe LLP introduced a unique application to automatically build XBRL-formatted WIP reports along with other financials. Bond software provider, SuretyWave, is integrating with Crowe to provide the same suite of services to their agency and surety clients.
We’ve been busy but there’s more to come. Watch Pipeline
for more bloodcurdling developments like these:
Stay tuned. We’re hammering the final nail in the coffin of manual data entry... more to come.
- Two more large surety carriers will begin accepting automated (standard) WIP reports.
- A well-known bond agent will begin delivering computer-readable WIP reports to a carrier client for a real-world example of straight-thru-processing.
- A big-name software provider will adapt their applications to build standardized WIP reports.
- A regulator we all know well (hint ... initials are SBA) will announce results of a pilot program using standards.
- Financial data standards will be introduced that cover full contractor financials. Crowe LLP has created and contributed a draft collection of terms representing contractor financial statements, which are being reviewed and refined by the working group. This collection of terms (called a taxonomy) will be made public later this year to obtain further input from contractors, bond agents, sureties, and other stakeholders. The goal is to automate financial documents so that carriers no longer need to manually rekey data when preparing information for contractor clients. Data in a standardized format is already available for public companies. We plan on extending this capability to private companies by creating a slimmed down version of U.S. GAAP financial terms, to make it as easy as possible for contractors to adopt.
For more information and to find out how you can get involved, visit https://xbrl.us/home/industries/surety/