These are the details of an industry solution for item 2 (Surety Financials & WIPs) described in SuretyScience's Surety Blueprint™. One of the most critical components of surety underwriting is the analysis of a contractor’s financial statements and work performance. Yet despite years of discussion and an ongoing industry initiative, the Surety market still lacks a reliable, streamlined method for collecting Financial Statements and Work in Progress (WIP) reports. Most Sureties, brokers, and agencies continue to rely on methods that are labor‑intensive, costly, and inconsistent. These inefficiencies lead directly to:
- Greater Risk - Underwriters are deprived of timely, meaningful, and reliable data, undermining the accuracy of credit and capacity decisions.
- Revenue Leakage - Stale WIP reports result in missed opportunities to capture additional earned premiums.
- Increased Liability - Inability to close out bonds due to outdated or incomplete WIP status leads to unnecessary exposure on open obligations.
Ongoing Efforts
Methodologies
Several different methods are currently used across the Surety industry to manage and analyze Financial Statements and Work‑in‑Progress (WIP) reports.
Challenges
These documents are typically received via unsecured email, most often as PDF files in a wide range of formats that must be manually interpreted. The volume of data required is substantial, increasing the likelihood of errors during manual entry.
Challenges
Neither agencies nor principals want to invest time reformatting their reports to meet the Surety’s requirements. And if the template isn’t fully locked down, it will almost always be altered to fit individual preferences.
Challenges
These solutions are costly. Traditional OCR requires extensive data reconciliation due to its high error rate. Although AI promises improved accuracy, it has not yet matured and achieved broad adoption. Compounding the challenge, data locked inside document systems is difficult to merge into Surety underwriting platforms, making it hard to extract actionable insights.
Challenges
Adoption continues to be limited. Many accounting systems and most construction management systems do not yet support the transformation of financials and WIPs into XBRL format, nor do they provide mechanisms to store or transmit XBRL‑based files. Greater industry advocacy is needed. The Surety sector must more actively lobby and petition vendors to adopt and implement this functionality.
Related Standards
There are several ongoing efforts in support of the Surety XBRL standard.
Legal Entity Identifers (LEI)
Unique Project ID (UPIN) & Project Data Standards (Digital Twins)
Legal Entity Identifers (LEI)
Uniquely identifying companies and understanding how they are interrelated can be challenging. XBRL supports the use of the Legal Entity Identifier (LEI), a 20‑character code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). These identifiers can be embedded directly into key XBRL documents, including annual reports and financial statements, in both human‑readable and machine‑readable forms to serve as a consistent, standardized organization identifier.
Numbers 1-4 always show the ID of the LOU which issued the LEI
Numbers or letters 5-18 are unique to each entity
Numbers 19-20 are for verification purposes
LEI Example
1234
567890ABCDEF1G
23
Unique Project ID (UPIN) & Project Data Standards (Digital Twins)
Today, uniquely identifying projects on Work‑in‑Process (WIP) reports is still a highly manual and error‑prone process. Capturing the full set of required data accurately and on time is challenging. Transforming that information into meaningful metrics and insights remains unnecessarily burdensome. XBRL standard offers a taxonomy for WIPs (summary list of project statuses with several key attributes like estimated completion date and cost to complete). But that only provide a small subset of full breath of project information that Sureties require to proactively identify risk.
A Digital Twin—a digital representation of a real‑world object—serves as an exact digital replica of a construction project.
Digital twins are quickly becoming a cornerstone of modern construction, providing an accurate, real‑time view of project information.
- Universal Project Identification Number (UPIN) - By leveraging Digital Twins, projects are uniquely identified and a seamless information pipeline is created between Principals (typically Construction companies) and Sureties.
- Today, project data is typically reported every 90 days. Automated, real‑time project data delivery enables Sureties to predict issues earlier, control costs against budgets more effectively, and monitor risks with far greater precision.
- Widespread adoption of digital twins would eliminate the need for traditional Work‑in‑Process reports altogether—replacing periodic snapshots with continuous, accurate, real‑time project data.
The XBRL Standard
SuretyScience supports the XBRL Standard as the optimal industry solution for transmitting Surety Financial Statements & Work in Progress Reports (WIPs)
The Process
XBRL Standard Benefits
SuretyScience brings together the domain expertise, technical capability, and uniform data foundation needed to help successfully implement this solution.
SURETY FINANCIALS & WIPS ONLINE PETITION
Let the construction, accounting and surety software vendors know just how important adding functionality that enables XBRL this is to you!
