Skip to main content
Survey Report

Insurance Marketplace Realities 2021 Spring Update – Surety

Reinsurance
N/A

April 21, 2021

The surety market retains stability as economies emerge from the COVID-19 pandemic.
Rate predictions
  Trend Range
Surety: Increase (Purple triangle pointing up) Flat to +10% (varying across industries)

Key takeaway

As economies emerge from the COVID-19 pandemic and begin to stabilize, the overall surety market is expected to remain stable with ample capacity for best-in-class companies, but underwriters will still be cautious.

U.S. marketplace

  • We continue to see an increase in the acceptance of electronically executed bonds due to the surety industry’s efforts to get federal, state and local officials to issue emergency orders requiring this acceptance.
  • While surety rates remain competitive for solvent companies, there has been a decline in appetite for new business across COVID-19-impacted industries, particularly the hospitality and travel sectors.
  • A new market entrant and recent hires at another market illustrate ongoing optimism in the U.S. commercial surety space. This will ease upward pressure on rates and underwriting as markets compete for business in 2021.
  • Though the insurance industry has been impacted with COVID-19 claims, the surety industry doesn’t anticipate a rise in claims in the short term. Longer-term fallout from the pandemic, should it develop, would likely be of limited impact in the surety space.

Global surety

  • The construction sector is still postponing or canceling large projects worldwide due to economic uncertainties, supply chain and material disruptions and varying lockdown orders across the globe.
  • Lessons from 2020 have prompted many companies to review and mitigate their cash flow projections, liquidity obligations and expenses, with leaders examining how to respond and move forward.
  • Bonding for subcontractors on private and public projects is expected to increase in 2021. General contractors are expected to use subcontractor bonding as evidence of the subcontractors’ financial qualifications post-pandemic.
  • There is renewed hope that the Biden administration and governments worldwide will invest in large, sustainable infrastructure improvement plans to revive economies.

Disclaimer

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.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. 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 and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

Contacts

Scott Hull
Global Head of Surety, Corporate Risk and Broking

Goly Jafari
Global Head of Surety Operations

Related content tags, list of links Survey Report Reinsurance Insurance United States
Contact Us