NEW YORK--(BUSINESS WIRE)--The XBRL US Surety Working Group announced today that standards have been used to successfully automate the collection of data for surety underwriting which historically has been a highly manual process. Automation addresses the challenge of how to consistently and accurately consume financial data from contractors into a surety’s financial database, helping to streamline contractor access to credit and increase underwriting efficiency.
Taking the lead on technical implementation of the standards for the industry, The Hartford, a provider of surety and fidelity bonds, tested the premise of using standards to transform their internal processes and systems. With standards, The Hartford automated the extraction of contractor Work-in-Process (WIP) data into their surety financial system. In parallel, Marcum LLP, an independent public accounting and advisory firm, has created computer-readable WIP reports using a spreadsheet add-in tool.
Previously, the Surety Working Group completed the first release of the WIP Taxonomy, a digital dictionary of terms describing reported values for costs, revenues and profits used to identify risks and determine contractor eligibility for surety bonds. The next step involved implementation of these standards to automate the data collection process which is described in The Hartford case study: https://xbrl.us/research/automation-improves-surety-underwriting-process/
“Our traditional data collection method requires our staff to key data manually which can take from 20 minutes to 2 hours for a single WIP report,” said Rick Ciullo, chief operating officer of Hartford Bond. “Using data standards to automate data collection is an important step towards modernizing the surety industry, and improving the timeliness and accuracy of our underwriting services to contractors.”
Marcum LLP used a spreadsheet add-in tool from Altova, a software company specializing in tools for developers, to generate a computer-readable WIP report. The initial process took approximately five minutes to map the contractor report to the financial data standard. For subsequent WIP reports, there should be no additional work involved beyond what contractors and their accounting firms typically perform to create a WIP report as described in this case study: https://xbrl.us/research/automating-work-in-process-wip-improving-contractor-access-to-credit/
“The spreadsheet add-in is a good tool for contractors and accounting firms that build their WIP reports in Excel, and it doesn’t require any technical knowledge to apply,” said James Wiedemann, Marcum LLP. “But we expect contractors will have many options to create standardized WIP reports going forward, including working with their existing reporting software tools. The goal of the Working Group is for contractors to use their existing process to generate an XBRL-formatted version of the WIP with no added work on their part.”
The next steps for the project include further engagement with software providers that work with contractors, bonding agents and sureties. Organizations that are interested in getting involved should contact the Surety Working Group at email@example.com.
Sponsoring organizations in the Working Group include AIG, The Hartford, Liberty Mutual Surety, Marcum LLP, the NASBP (National Association of Surety Bond Producers), Travelers, and Zurich Insurance. Participating organizations, serving as observers and advisors, include CFMA (Construction Financial Management Association of America), SFAA (The Surety & Fidelity Association of America) and the FASB (Financial Accounting Standards Board).
About XBRL US
XBRL US is the non-profit consortium for XBRL business reporting standards in the U.S. and represents the business information supply chain. Its mission is to support the implementation of business reporting standards through the development of taxonomies for use by U.S. public and private sectors, with a goal of interoperability between sectors, and by promoting XBRL adoption through marketplace collaboration. XBRL US has developed taxonomies for U.S. GAAP, credit rating and mutual fund reporting under contract with the U.S. Securities and Exchange Commission and has developed industry-specific taxonomies for corporate actions, solar financing and surety processing. http://xbrl.us
XBRL US Surety Working group: http://xbrl.us/surety
Streamline Data Collection in Surety Underwriting infographic: https://xbrl.us/infographic/data-collection-surety-underwriting/