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WESCCON Conference

ACE Update: eBond Scott D. Wollney. WESCCON Conference. October 12, 2007. eBond: Business Practice. Potential Benefits… Operating Efficiency Less paperwork Challenge industry to automate Better Underwriting Risk specific Price follows risk Reduced E&O Exposure Business rules/edits

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WESCCON Conference

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  1. ACE Update: eBond Scott D. Wollney WESCCON Conference October 12, 2007

  2. eBond: Business Practice Potential Benefits… • Operating Efficiency • Less paperwork • Challenge industry to automate • Better Underwriting • Risk specific • Price follows risk • Reduced E&O Exposure • Business rules/edits • Real time process

  3. eBond: Business Practice Potential Challenges… • New playing field • Competitive reaction/strategy • Customers’ understanding of value proposition • Technology compresses time-frames • Initial benefit • Impact on client expectations • Reduced barriers to entry • STBs written in advance of CHB role • ACE Portal vs. surety specific technology

  4. eBond: Business Practice How will it affect the OVERALL Business Environment? • Underwriting authority is granted by surety • Per filer, by entry type via the BAF • Authority beyond BAF must be provided prior to processing • eBond is transmitted by CHB to CBP • Data set, not image • CBP pre-release process will include • Bond sufficiency review • Confirmation that preparer has authority to file bond • Processing CB/SEB eBonds

  5. eBond: Impact Importer Paper environment Request Billing Paper Bond CBP CHB Application Underwriting Approval Reporting Billing Surety

  6. eBond: Impact Importer eBond environment Request Billing eBond Accept/Reject CBP CHB Application Underwriting Approval Billing Validation Authorization ACE Surety “Reporting”

  7. eBond: Business Practice (draft ACE Home Page)

  8. eBond: Business Practice (draft ACE Surety Portal)

  9. eBond: Impact How will eBond affect YOUR process? • Operational • CHB underwriting authority will not be eliminated by eBond • Better delineation by entry type • Underwriting process will change • Earlier dialogue • Confirmation to CBP required for larger bonds • Proactive approach to compliance • Validity • Sufficiency • Competitive • Barriers to entry & commoditization are issues

  10. eBond: Recommendations How can we prepare for this change operationally? • Discuss your surety’s plans and performance metrics • Understand your software provider’s approach • Questions to ask • Surety • How will underwriting requests be made? • What is expected turnaround? • How will premium/renewals/riders be handled? • How will bond sufficiency be monitored? • Software Provider • Where will bond functionality be found? • Will bond approval requests be part of the process?

  11. eBond: Recommendations How can we prepare for this change competitively? • Ensure that you have access to “value added” bond tools • Differentiate product to your clients • Understand how these may change in new environment • Begin promoting benefits to importers in advance of increased competition from direct writers • Track developments and prepare staff to address questions • Questions to ask • Surety • What are differentiating characteristics? • How can you help prepare my staff?

  12. eBond: Conclusion With change comes challenge and opportunity… • Timing • eBond is becoming a reality • ESAR A1: Recordkeeping change • ESAR A2: CHBs are affected • Benefits • CHB: Efficiency • No paper • More automated processes • ALL: Improved oversight • Underwriting • Compliance

  13. eBond: Conclusion Partnership & Planning Will be the Key to Reaching New Heights!

  14. Thank You for Attending This Presentation.For Additional Information About Avalon Risk Management, Inc.Please Visit www.avalonrisk.com AVALON RISK MANAGEMENT, INC. Premier Provider of Innovative Insurance and Surety Solutions

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