Insurtech takes on tedious task of obtaining probate surety bonds

While insurtech primarily has focused on the top-level needs of the insurance industry, a North Carolina company says it has automated the cumbersome and time-consuming process of obtaining probate surety bonds with a online probate bond application it claims is one of a kind.

Each year, tens of thousands are required to obtain probate surety bonds before being appointed as personal representatives over a deceased or incompetent individual’s estate. The bonds, usually obtained through insurance agents, are often required to ensure any claims of mismanagement of an estate will be covered. But getting one can be a headache, filled with numerous paper applications, varying state requirements, phone calls with insurance companies, and long waits for completion.

BondExchange says it has solved those problems with the new automated system.

Requirements vary

“You have all of these kinds of various requirements from city to city, county, to county, state to state,” said BondExchange President Jackson Cromer. “But we put together a really ‘dialed in’ application process that takes the user, or in our case, our agents, through it in a piece-by-piece process.”

Cromer said the system will answer questions and even counsel agents on whether an administrator, executor, conservator, or guardianship bond is needed.

“It will ask the questions that can help lead up to and identify what they need,” he said. “It really takes a lot of the difficulty out of their hands and puts it in a step-by-step easy process for question and answer.”

Application time cut

Cromer says the system has cut the application time needed to obtain the bonds from weeks or months to just minutes.

Cromer said an earlier version of the program was launched seven years ago, but last month a premium version with new and faster features were introduced and the reaction has been “wildly wonderful.”

“We’ve seen really solid user growth,” he said. “The new version has allowed us to scale new features a lot faster and we’re growing our user base 15% to 20% year-over-year.”

Cromer concedes there are a few competitors in the market for automated bond applications but says the insurance industry has been slow to innovate the process largely because probate and surety bonds are admittedly a small part of an agency’s business. However, while many insurance products pay commissions of 10%-15%, many surety commissions, with contingency added can range between 25%-40%.

Nevertheless, Cromer said the bulk of investment spending in the industry has been on technology in the personal or commercial line where his company dedicated to surety bonds.

“It’s all we do,” he said. “We take the burden off of the agency so they don't have to spend time fiddling around with a bond that may have a $20 commission and allow them to focus on the stuff that really brings in the money,” he said.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].