A Novel Approach to Credit Analysis for Surety Insurers

Unanticipated micro and macroeconomic trends may result in an unexpected rise in surety claims. Market downturns such as those triggered by the Covid-19 pandemic can result in significant losses for credit and surety insurers. Such detrimental trends compel underwriters to revisit their credit analysis strategies and surety portfolios to conduct an in-depth analysis of financial risks, volatility, and associated uncertainties in the global marketplace. Credit analysis processes suffer from several challenges, such as geographically dispersed operations, lack of standardization, shortage of qualified surety underwriters, and higher turnaround times due to several competing priorities. Credit rating agencies evaluate portfolio management metrics to determine credit strength; therefore, portfolio management is critical for surety insurers. Robust risk management practices in the context of portfolio management require in-depth monitoring of credit quality. Modern analytics and data visualization tools can facilitate a more centralized and manageable tracking of these factors. Changing customer expectations and a rapidly evolving competitive landscape require that surety insurers leverage data visualization and analytics to drive better business outcomes.

Underwriters devote a considerable amount of time entering relevant data into financial analysis programs. Utilizing assisted automation and leveraging technology can automate repetitive administrative tasks, allowing underwriters to focus on revenue-generating activities. Data should be presented in an intuitive, user-friendly format to derive actionable insights, strip away irrelevant information, and readily support statistical analysis. Next-generation data analysis and visualization tools can significantly boost underwriters’ productivity by facilitating advanced data visualization.