Surety Standards Toolkit Data Standards for the Surety Industry An industry-driven program to use standardization to improve efficiency in the surety process Surety Standards Toolkit

Surety Standards Toolkit Agenda Fundamentals of standards Surety process use cases Other sureties supporting the initiative Benefits for [COMPANY NAME] Getting started Surety Standards Toolkit

Surety Standards Toolkit How much time does the surety underwriting team spend manually entering data into our surety system? What if that same data could be automatically extracted and analyzed within seconds of receiving it? Surety Standards Toolkit

Standardization can make that happen. Surety Standards Toolkit

Surety Standards Toolkit Data standards lower cost, increase accuracy, make data more timely by transforming paper documents into computer-readable data. Clearly defined to creators, data intermediaries and end users Surety Standards Toolkit

Surety Standards Toolkit The surety industry, led by the NASBP and SFAA, has initiated a program to eliminate unnecessary manual data entry, through standards developed by ACORD and XBRL US. These standards will help sureties provide faster response times with the most accurate information available. Surety Standards Toolkit

Surety Standards Toolkit ACORD and XBRL US are non-profits standards organizations working with the industry to increase efficiency. ACORD –working with the insurance industry since 1970: Facilitates fast, accurate data exchange and more efficient workflows through the development of electronic standards, standardized forms, and tools to support their use 1/3 of global insurance premium written using the ACORD Standards 300,000+ forms downloaded Real time Report of Execution upload in use today for Surety Developed ACORD eLabel forms for Surety to simplify implementations XBRL US –responsible for the XBRL financial data standard which is: Free, open, nonproprietary – no licensing fees for use Widely used in the U.S. – by every public company reporting to the Securities and Exchange Commission, every bank reporting to the FDIC Global – used in 60+ countries by 10 million+ private and public companies, adopted by 100+ regulators The only financial data standard – developed to handle unique characteristics of financial data Surety Standards Toolkit

Surety Standards Toolkit Four use cases have been identified within the surety process where standards bring significant benefits. ACORD Bond request Report of execution XBRL US Work-in-Process report Contractor financials Surety Standards Toolkit

Use cases: ACORD eForms With eLabels Electronic fillable ACORD forms capable of collecting data. Data from one of these forms can be extracted and imported to surety agency management systems or surety underwriting systems. Benefits: Increased responsiveness to customers Reduced manual entry and re-keying Fewer errors Forms Currently Available: 501 Report of Execution 502 Contract Bond Request 503 Commercial/Misc. Bond Request 504 Additional Entity

Use cases: Work-in-Process report & full financials Sureties collect between one to twelve Work-in-Process reports from each contractor every year, and full financials from contract and commercial accounts. With use of the free XBRL standard, data can be imported instantaneously. Surety Standards Toolkit

ACORD e-labels and XBRL to eliminate manual data entry Use of standards reduces data entry time from minutes or hours to seconds Proposed Process ACORD e-labels and XBRL to eliminate manual data entry Surety Producer and Customers Eliminate manual data processing Reduce need to review data Faster response time from surety/bank/SBA More current, accurate data Surety Standards Toolkit

Surety Standards Toolkit Watch the video demonstrations: Standards Adoption Toolkit http://suretyautomation.org/the-standards-pledge/standards- adoption-toolkit/ Surety Standards Toolkit

The industry standards to gain from standardization Surety eliminate manual processing reduce need to review data Producer & Our Customers faster response time from surety Surety Standards Toolkit

Ready to Act Forms Are The Industry Standard. Output to Sureties is Standard. Estimate that surety agency management systems implementing ACORD forms account for over $3B of all SFAA member premium. Approximately 40 carriers are likely to have their systems accept ACORD e-labels within the next 12 months, representing over 50% of all SFAA member premium. ACORD has developed a specific forms license for surety vendors at a modest cost. XBRL is openly available. Use cases are ready; business cases are ready; marketing materials are ready. Vendors need to add e-labels; Sureties need to accept them.  

What are the Costs to Implement? Implementation of surety industry standard ACORD forms has been as simple as mapping a bond form. Minutes, not hours. Vendor mapping and testing of e-label and XBRL output-approx. 50- 100 hrs. Surety programming and testing of e-label and XBRL input – approx. 50-100 hrs. Total e-Label and XBRL Implementation Costs- Hours, not Months!

What are the Benefits of Implementation? Estimated # of Transactions for Surety Industry Annually Estimated $ Savings from Re-keying for Surety Carriers Annually > 1,000,000 Final Bonds > 2,000,000 Bond Requests > 500,000 Bid Results > 100,000 Financial Statements > 80,000 WIP Schedules $2,000,000 @ 4 min/ROE $5,000,000 @ 5 min/Bond Request $750,000 @ 3 min/Total Results $500,000 @ 10 min/Fin. Stmt. $2,400,000 @ 60 min/WIP Estimated Savings: Over $10 Million Annually Note: Transaction estimates are extrapolated based on market share. Data entry costs estimated at $.50 per minute.

Surety Standards Toolkit Industry-wide adoption of standards is necessary. The list below includes other carriers working to incorporate these standards. Surety Standards Toolkit

[COMPANY NAME] stands to benefit from standards. ROI for Surety Standards Toolkit

Getting started is easy. Watch a webinar on how to incorporate these new standards on September 19. Register here: https://xbrl.us/events/20170919 Schedule a call to discuss business and technical issues. Email inquiry@suretyautomation.org Learn more by visiting http://suretyautomation.org/the-standards- pledge/standards-adoption-toolkit/ Surety Standards Toolkit