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Survey Report

Insurance Marketplace Realities 2021 – Surety


November 18, 2020

Despite the severity of the economic downturn, the global surety market is stable.

Rate predictions

Rate predictions: Surety
  Trend Range
Surety Neutral increase (flat yellow line) Flat to 20% (varying across industries)

Key takeaway

Financial protection for contractual obligations in the current marketplace carries far more risk than it did prior to the COVID-19 pandemic, but despite the severity of the resulting economic downturn, the global surety market is stable.


  • Current marketplace risk appetite is causing sureties to become more selective, requiring additional detailed information, documentation and financial transparency through the underwriting process.
  • Sureties are paying greater attention to contract language as it relates to delays, extensions, force majeure clauses and payment terms.
  • Surety buyers must be prepared to demonstrate how they are mitigating increased contractual and financial challenges through the pandemic.
  • To date, the surety industry has not experienced an increase in claim activity due to COVID-19. As the economy is further impacted, the Surety and Fidelity Industry of America (SFAA) anticipates losses may increase.

Contract surety

  • Managing cashflow, skilled labor, diversifying supplier sources and focusing on core construction strengths will be necessary as contractors navigate a post-COVID-19 economy.
  • Private projects are expected to renew an interest in bonds as an additional layer of financial protection for owners, while megaprojects and PPP are beginning to feel the impacts of COVID-19 on funding, surety capacity and political environments.
  • Delayed projects will likely place stress on backlogs, labor and resources as they come on line. Expect additional scrutiny about backlog management and financing as the economy regains strength.

Commercial surety

  • Due to the pandemic and most employees working from home, the surety industry has seen a significant increase in public owners willing to accept digital bonds, signatures and seals, advancing surety into the digitization age.
  • Credit facilities have begun tightening and will likely incur sizable write-downs associated with business failures. Companies that are highly leveraged may have fewer options, further challenging their surety capacity.
  • Future availability and pricing for large surety programs will be determined by the losses experienced by the global reinsurance industry.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


Scott Hull
Global Head of Surety, Corporate Risk and Broking

Goly Jafari
Global Head of Surety Operations

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