Issues & Answers Special Advertising Section:
“We have Contract & Commercial Underwriting teams for account business in most major metro areas and dedicated Commercial Express & Contract Express teams available to our agents and brokers.”
Construction is the biggest part of the surety industry. Sixty percent of our bonds go to contractors, and then the other 40% we call commercial surety, which essentially goes to all different types of businesses, such as retail, wholesale, banking, and the renewable-energy industry. Any business or industry can get a surety bond and may in fact need a surety bond.What should you look for in a surety partner?
It’s really important to look for a financially strong partner with an excellent AM Best rating and a Federal Treasury Listing. You also want to look for a surety company that has a full gamut of options for you that can cover large-account business, small-account business, contracting and commercial. You’re hoping to get somebody that’s a one-stop surety shop. You would want to work with somebody who has all the capabilities, from loss control to claims. There are a lot of different things that go into a construction project and making sure that it’s successful. If it runs into issues, PHLY is there to step up and make sure that things are resolved using in-house Engineering, Accounting, and Legal resources.
What are the biggest issues facing the surety market right now?
The things that keep me up at night are employees, not only from the surety standpoint but also a lack of employees in the construction industry. The construction industry pre-pandemic was short of skilled labor. As the pandemic occurred, you had a lot of skilled laborers retire. There’s a huge shortage of skilled labor. Young people are not going into the construction industry like we would hope. Beyond that, there are supply-chain issues that continue to impact every business. On top of that is the increased prices of those materials. In the surety industry itself, we have a shortage of people to hire in the industry. We have a lot of new entrants into the market, and everybody’s looking for underwriters. That’s definitely a concern as well.
What advice would you give agents that are just getting into surety?
Reach out to a surety company. Like a lot of different businesses, it’s relationship-oriented. You want to work with a surety that you can build a relationship with, that you can trust is responsive and consistent. Because you’re placing your business with that company, you want to trust that they’re going to do the best for your client and provide you with the type of products that you need for either your contract account or your commercial account. You really want to build up those relationships. Relationships can last a long time, and you can have clients that last just as long with these types of relationships.<!###CONTENT:END###>