Current Economic Challenges Call for the Skills of the Professional Surety Agent Now More Than Ever

The light we saw at the end of the tunnel was, in fact, a train heading our way. Our country and our industry are facing the worst economic crisis of our time. The banking industry has been dealt a critical blow, public confidence in the economy is virtually non-existent, and available work for our clients has slowed to a trickle.

The past six months have been critical and challenging for us all. As NASBP President, I want to do all that I can to assure preservation of the surety product and reputation of the bond producer. The future will be demanding, to say the least, and we will need to stay the course. The result will be well worth the effort.

Professional surety agents’ commitment to excellence is needed now more than ever. Our client base will continue to look to us for that special guidance that we provide. The role of trusted advisor brings with it a good deal of added responsibility; working with our clients sometimes entails delivering unpopular news and advice. Our clients’ need to have a realistic business plan that addresses the hard reality of the present economic conditions. We need to help our clients understand that this is paramount to their success.

Clients’ general and administrative expenses need to be reviewed and if necessary adjusted. Uncontrolled overhead in an economy such as this one will deplete clients’ coffers at an amazing speed. Clients need to take care not to stretch jobs into the future, as their profitability will be adversely affected if they are not careful.

Banking support for our clients is a concern to all. The fact that many of our contractor clients have unsecured lines of credit, which are rarely used, can result in the banking institution slashing the contractor’s available line of credit for this non-use. Care needs to be taken to work closely with the client’s bank to ensure that the bank understands the importance and need for this line of credit to stay in tact, now more than ever.

The new economic stimulus packages being planned at all levels of government throughout the country will bring an infusion of much needed work opportunities for some of our clients. NASBP, together with construction industry organizations, maintained a constant presence on Capitol Hill to advocate for “shovel-ready” construction projects. Nonetheless, the reality of the length of time needed to get many new projects from the conceptual stage to the building stage must be taken into account and understood. Some public works jobs were shelved in the recent past and need only be dusted-off and released; others will take anywhere from nine months to a year, if not longer, to show positive results.

The plight of small and emerging contractors will need attention, as well. The NASBP Government Relations staff has worked tirelessly to advocate for legislation that would foster the inclusion of small construction firms in the federal marketplace. I urge all NASBP members to make a special effort to work with this section of the market as these clients have the capacity to be the future large clients in our business. I can think of no group more in need of our help and assistance in these tough times. I challenge our membership to get involved with the assistance programs being developed by the various public agencies in this regard. We are interested in developing successful contractors; we are not at all interested in entitlement programs or assigned-risk type programs, as these do not provide a permanent solution to the problem.

At the end of this maelstrom, the well-capitalized and savvy contractor client will emerge stronger. Our efforts to make our clients better businesses will win out in the final analysis. The NASBP agent’s position as an unpaid unofficial member of the client’s board of directors will bear fruit contributing to everyone’s success. Now is the time for all or us to rise to the challenge being presented to us by the current economic calamity, I know we will be successful.

As always, if you have any questions or require any additional information, please feel free to contact me.

William F. Maroney
President

William F. Maroney is Senior Vice President of City Underwriting Agency, Inc. of Lake Success, New York. He can be reached at bmaroney@cuagency.com.