As we passed from 2012 into 2013, conditions in the U.S. surety market appeared to be a relatively quiet.
Sureties and contractors alike seem to have adjusted their operations so that most are enduring, several are struggling and a few are thriving. Certainly news-worthy items exist: premium continues to contract, loss ratios are up, and several sureties reflect material losses. But because these were all anticipated, none of these have been viewed as earth-shattering. Some would even argue the industry continues to fare far better than expected during the past several years.
Read on for a look-ahead at 2013 and for recommendations to contractors and clients.
The preliminary 2011 surety industry results once again shattered many of the “crystal ball” predictions, as significant surety losses failed to materialize. On the surface, the recent meetings between Lockton’s National Surety Team and top industry executives left the Lockton team with a case of déjà vu.
Excellent financial results paired with predictions for a monsoon of losses on the horizon was a familiar theme. While one could overlook the predictions because of continued positive financial results and reviewing historical information will bring new points of concern to the surface.
Overall, industry results were fabulous: $5,139,092,292 in written premiums, $671,681,201 in direct losses, and a 13 percent direct loss ratio in 2011. Several sureties generated record profits, capacity has never been more abundant, and sureties are hungry to write well-qualified credit / contractors.
Continue reading here.