Commercial Surety Education
The overwhelming majority (84%) of the respondents answered in the affirmative when asked if they would like to see NASBP continue to provide education/training in commercial surety. This strong support is part of an ongoing trend; with 83% of the 2011 respondents having answered the same way. The Commercial Surety Committee is pleased to note that since the 2011 survey, it has developed a Public Bonding Resource Kit, an Advanced Commercial Surety session as part of the Angell-Curtin Advanced Surety School Level III, two educational sessions at each of the 2013 and 2014 NASBP Annual Meetings, an education session for three Regional Meetings, and more than six virtual seminars.
The survey found that respondents not only want commercial surety educational opportunities, they have an increasing desire for virtual or “e” learning. In 2008, approximately 70% of the respondents wanted educational programs delivered over the phone or Internet; in 2013, only 18.1% want telephone-only virtual seminars but 44.8% prefer webinars and another 54.2% are interested in online courses. Whether due to the cost savings or the additional functionality, our usage of the Internet as a tool to satisfy commercial surety education needs to continues to grow.
Of those surveyed, nearly 70% were aware the Commercial Surety Fundamentals online course offering through WebCE and the adjoining CE credits, a 20% increase from 2011.
Opportunities to learn more about the world of surety continue to grow as “Mentoring the Future” was theme for the 2014 Annual Conference. That theme continues to weave through the
Commercial Surety Fundamentals course as well as the newly offered
Contract Surety Fundamentals course both developed by the NASBP that are offered exclusively through WebCE. There has been a 20% increase in awareness of the online education offered through the NASBP and a 550% increase in attendance from 2012 to 2014 among those who took the survey.
Commercial Surety Growth
Commercial surety remains the surety minority, less than 25% of producers book for close to 70% of those polled. However, there is evidence of growth within those figures.
There was a 6% increase in the percentage of respondents (from 58% in 2011 to 64% in 2013) who anticipate their commercial surety growth will increase in 2014 but the number or respondents nearly doubled. There was only a 3% increase in respondents who have designated “increase commercial surety” as a business objective for 2014. However, the response count increased from 59 to 107.
The majority of those polled (55.7%) stated they expect their commercial book to grow in 2014 for at least one of the following reasons:
- To diversify/balance;
- Contract business slows down and non-construction business is growing;
- See opportunity;
- High commissions;
- Underserved market/fewer competitors; and
- Renewal income.
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Reasons offered by the 36.8% of respondents who do not intend to grow their commercial book:
- Too much time for too little premium;
- Not a focus or target;
- Not are area of expertise; and
- In an area where commercial bonds are few.
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Summary from the 2013 Survey
So, what does this data mean for you? Will you “only write commercial surety to accommodate contract accounts” or will you leverage commercial surety to achieve the company’s growth goals? Responses, like the market place, were all over for this class of business. Comments ranged from, “not a core focus for 2014” to “item count/volume of new business will grow but existing accounts will show lower premiums due to the competitive marketplace“ and from “management handles” to the final comment, which I believe we can all relate to, “we hope so.”
Overall, commercial surety continues to grow, and it will be intriguing to see if the spotlight remains on this class of business or if the focus will once again shift to contract as the economy begins to gain additional momentum. The goal pf this report is to provide additional insight and a tool for our industry to provide resources needed to help understand and market this business to the success of all parties.
I welcome any comments or questions and will share them with the Commercial Surety Committee. We will continue to seek out new opportunities to provide education and value to our members. Finally, if you haven’t yet taken the Commercial Surety Fundamentals online course, I would encourage you to do so. The latest course, Financial Guarantee Bonds, is scheduled to debut later this year for additional continuing education opportunities.
This article was written by Corban Enns, Founder/President of Surety Solutions, LLC in Salem, OR. He can be reached at phone: 503-363-6689 or at corban@suretysolutionsllc.com.