U.S. Surety: Understanding the Trends and Choosing the Right Company


When it comes to surety bonds, it's important to choose a company that knows the market and can support your needs. Philadelphia Insurance Companies (PHLY) is one of the largest and strongest companies in the U.S. surety marketplace, offering financially-sound bonding options for qualified construction contractors and commercial surety accounts. Learn about the current landscape for the U.S. surety market along with everything you need to know to find the right partner in surety.


Surety Bonds: Legal Landscape and Current Trends

In the United States, there are federal, state, and local statutes that require contract or commercial surety bonds on construction projects or commercial surety obligations. At the federal level, the Miller Act (40 U.S.C. §§ 3131-3134) requires surety bonds for all publicly funded construction projects that are contracted for more than $100,000. Most states have their own laws that require surety bonds for much smaller construction projects - some as small as $5,000. Effectively, virtually every construction project today that is funded with public money requires surety bonds. When choosing between insurance companies for surety, many government agencies require companies to have an AM Best rating of A- or better and be qualified by the U.S. Treasury Department.

The United States' market in particular, is seeing significant opportunities for growth. There is a consistent demand for infrastructure improvements that is driving U.S. surety growth, with analysts predicting more private involvement in projects that are traditionally in the public sector. Tax reform is also driving growth, as experts expect an increase in economic activity driven largely by a repatriation of funds by large corporations, a significant portion of which are continually investing in U.S. infrastructure projects.

Changing demographics in the U.S. are also driving growth trends in surety. Recent and rapid residential development is expected by some to transition to public works projects. Schools and other municipalities will likely need to launch construction projects of various sizes to respond to demographic shifts in their communities.

The U.S. surety industry is currently outperforming most other financial service sectors. According to the Surety & Fidelity Association of America, the direct premium written in U.S. Surety increased to $6.2 billion in 2017 following five consecutive years of growth. This increase in annual premiums has been accompanied by improving loss ratios. There is greater capacity in the marketplace as well, with new companies entering surety along with acquisition and expansion efforts. The domestic surety market has proven to be profitable and reliable, with current trend lines suggesting a positive near-term outlook for the market.

Finding the Right Partner for Surety

Because there are few differentiators between the surety products themselves in the market, the type of company you choose to work with is very important. Insurance Journal identifies three key qualities to look for when choosing a company you can trust for surety bonding:

  • Reputation

  • Convenience

  • Size
The right company to partner with for surety bonds will have positive marks in each of these categories.

Reputation

Reputation is crucial for surety bonds. A company with a strong background in surety bonding can guide you through the bonding process, helping you or your clients navigate a complicated legal and financial landscape. Companies with a good reputation bring much-needed industry knowledge to the process.

A strong financial reputation is important as well, as this is needed to handle any claims that may arise. You can look for an insurance provider's AM Best rating to help determine financial strength. A strong rating indicates a stable financial foundation and excellent positioning in the marketplace. PHLY has an A++ rating from the AM Best Company - the highest rating they offer.

Convenience

While this is often overlooked, convenience is important because it can save you valuable time. An easy-to-use website can go a long way to making the bonding process much easier, offering conveniences like online bond placement and management. Our website was recently redesigned with simplicity in mind and offers key features such as:

  • Streamlined online applications

  • Immediate execution of bond documents

  • Instant approvals

Access to expertise plays a role here, too. A customer-focused company will offer quick and easy access to surety experts that can save you time by answering your questions and pointing you in the right direction when you need it. This small step can save you a lot of time in the long run when trying to place or obtain surety bonds. PHLY has a dedicated support team with a 96% overall customer satisfaction rating and a reputation for excellence and expertise.

Size

Larger companies have more resources to dedicate to providing a streamlined experience and maintaining strong agency relationships. PHLY is among the largest carriers in surety bonding, ranking 11th overall in the nation with a $231,637M treasury listing. Our Surety Division works with local, regional, and national agents and brokers who represent contractors seeking performance bonds to Commercial Surety account business as well as a small transactional Surety bond needs.

We seek the individual producers, as well as agency or brokerage firms which have strong moral character, and a good business reputation. While PHLY does work with national brokers, our relationships are handled on a local or regional basis.

PHLY has also invested heavily in outstanding loss control and claims operations - both of which are vital for carriers in the surety space. Our experienced risk management and claims professionals have years of experience dedicated to handling Surety Bond issues. While you shouldn't judge a company on size alone, it can be a proxy for other indicators you're considering when choosing a surety partner.

Be PHLY Sure with Surety from PHLY

PHLY is a leading provider of surety services in the United States. We offer a comprehensive suite of Surety Bond products including Contract, Commercial, Subdivision, and Customs bonds. We bring dedicated expertise backed by a strong reputation and total commitment to customer service. We excel in reputation, convenience, and size and offer a level of trust our clients and partners have come to expect.

Our excellent reputation comes from exceptional customer satisfaction rating and superior financial strength. PHLY's Overall Customer Satisfaction Rating is 96% across our local offices around the country. And in addition to an A++ rating from the AM Best Company - the highest rating they offer - we also have an A+ rating from Standard & Poor's. When it comes to reputational excellence in surety, it doesn't get better than PHLY.


As part of our commitment to excellent customer service, we make the commercial surety bonding process as convenient as possible. For commercial clients, our PHLY Bond Express allows you to quote or execute a bond from your office or home in just minutes by following four easy steps:

1. Access or create your MyPHLY account
2. Under Products find the Surety division and the Commercial Express Surety Center page
3. Click on the "Get started" button
4. Use the "Apply Now in PHLY Bond Express" button

We also offer access to surety experts who are ready to answer your questions and guide you every step of the way. Our commitment to customer support is at the core of everything we do at PHLY.

PHLY's reputation for excellent service and financial strength has allowed our surety division to grow the business appropriately. PHLY is currently the 11th largest surety company in the United States. Our size means we have the know-how and resources to provide excellent bond services based on our in-depth knowledge of bonding requirements. At PHLY, we have what it takes to give you the service and support you need.

Building Strong Relationships

In surety, there is a huge emphasis on relationships and human capital. At PHLY, we understand this and put it at the center of what we do. We take the time to get to know the clients involved and see how we can best meet their needs. As a company that understands how important relationships are in the surety space, we strive from day one to build great relationships with clients and agents.

Part of our commitment to this means hiring and training the right people. Applicants looking to work for PHLY in surety undergo an intensive hiring process. The select few who do get hired then become part of our surety training program, which is designed to sustain excellence in surety leadership as well as we continue our PHLY customer service-oriented culture. Currently, 15% of our underwriting staff at PHLY are trainees, and that's an intentional choice to continue our growth and build for the future. First and foremost, we invest in people - because we believe that's always a worthwhile investment. Whether its agents, their clients, or our own employees, we put in the work to establish strong relationships across the board.

Strong relationships and an impressive size and reputation, all built on a customer-centered approach. That's the way PHLY does surety. Visit our Surety product page to learn more today.

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