The opportunity for digitalization has been a major focus for companies over the last several years. In the age of the Pandemic, this has become even more critical given the supply chain challenges that this crisis has presented. The Surety industry is no different and Euler Hermes has reacted to the needs of our broker partners.
What is a Digital Bond?
One thing we have learned is that different parties have unique views on what constitutes digital bonding. In some cases, it simply means a digital copy of the bond and seal while in other cases there is a secure end to end completion of the transaction.
Euler Hermes works with the vendors Surety Wave and Surety2000 in order to provide brokers with electronic powers of attorney for bid bonds. We have had this capability available for several years and it is used effectively by a number of our broker partners.
How do Digital Bonds Work?
Historically for bonds other than bid bonds, the handling of these transactions has been more manual. As the pandemic arose and there was increased interest for digital capabilities, Euler Hermes investigated how we could evolve to meet this need. One thing became clear, whatever process was selected would require the acceptance of the ultimate obligee. As a result, we maintained our manual approach for those transactions where the obligee preferred it.
However, in cases where complete digitalization is needed we have partnered with Xenex whose digital bonding solution is called SignatureMaster™. Xenex originated in 1983 and has been involved in the pioneering of e-bonding in Canada. They are now also expanding into the United States after a solid track record with major brokers. The SignatureMaster™ option truly provides an end to end digital transaction. This resource allows us to electronically provide power of attorneys as well as to sign, seal and verify documents in the digital landscape. The one time set up is simple, the bond request process does not change and a broker can use it for any surety who registers with a Xenex client.
The true value of this technology for our clients is that it can assist them in meeting very short range demand for bonds. In some cases, the bond need arises in a last minute scenario and our clients are scrambling, via their trusted broker partner to get the bond in the hands of the ultimate obligee. Once set up, the ability to issue electronic bonds and have them sealed can be a swift and seamless process which means that clients can meet the demands of their industry with lightning speed. This solution includes an authentication feature which only further supports the security of the process.
We recently had a transaction where a digital bond was required. We received the notice of that need at 9 a.m. in the morning with a noon deadline to get the bond issued. Working with Xenex we were able to get all the needed parties registered, the electronic power of attorney assigned and the bond signed, sealed, verified and delivered by the deadline.
The Future of Digital Bonds
While many bonds are still created and transacted the historical way with a crimped seal, we can also deliver in a digital manner when the business requires it. We anticipate and look forward to the additional evolution of digital bonding in our industry. The pandemic creates unique challenges for business and that requires an innovative and agile approach…one that Euler Hermes is committed to embracing as we continue to address the service needs of our valued partners.
Learn more about Euler Hermes Surety Bonds and the various bonds we offer.
