A perspective of the industry from meeting with NASBP producers and surety executives around the country, Puerto Rico

Past Presidents have told me that one of the NASBP events to look forward to as President was participating in the NASBP Region 12 Annual Meeting in San Juan, Puerto Rico. They were right. Katie and I were treated like royalty as we toured the island in February with our host NASBP Regional Director Emilio Saldana and his wife, Lizette. The Puerto Rican economy has been depressed for many years. I learned that Puerto Rico had a very large budget deficit a few years ago and addressed it by cutting spending and, in some cases, raising taxes. Though construction spending has remained depressed for several years in Puerto Rico, the agents I spoke to indicated that the action taken to address the deficit is paying off and the economy is back on track. We noticed a sense of optimism that the progress would continue. Perhaps our leaders of the nation’s economy could benefit from taking a few pointers from Puerto Rico’s experience. Again, I want to thank Emilio and Lizette and all our new friends in Puerto Rico for their hospitality.

In a previous issue of Pipeline, I shared a nerve-wracking cab experience I had last year. Now it is time to share a more positive one. Carl Dohn and I traveled last week to conduct interviews with several surety executives. A cab driver picked us up and greeted us with the biggest smile I have ever seen. He offered to take us wherever and whenever we needed to go. As we traveled from the airport to the first surety company scheduled that day, he shared with us the fact that he had moved to the U.S. from Jamaica. He started as a dishwasher at the chain-restaurant T.G.I. Friday’s. When he found he could make more money in construction, he worked as a construction laborer. When construction slowed, he became a taxi cab driver. His said that this is the best country in the world, here everyone has job opportunities and opportunities to improve their lives. He had done just that. He now has a side business where he transports large groups in his SUV to supplement his revenue from driving his cab. I was impressed by his positive, “can-do” attitude. His story is a reminder to me how fortunate we are to live in the United States. Furthermore, I am grateful that we work in such a rewarding industry that too offers us many opportunities–to provide surety bonds.

In fact, in the coming weeks, we have an opportunity to advocate and to educate during the NASBP Washington Week being held June 24 to 28 in Washington, D.C that encompasses three events you don’t want to miss. The Regions 8, 9, 10, and 11 Meeting will be the first part of that week. Then, on June 26, NASBP offers the chance to advocate for our industry during the NASBP Legislative Fly-in day. Since this is an election year, it is imperative we have a great turnout. With House Bill 3534 gaining momentum along with other items on our agenda, there is no shortage of talking points that we will ask you to point out to your Senators and House of Representatives. I urge you to join us in Washington, D.C. on June 26. Last, but not least, the NASBP Federal Contracting Workshop will be held June 27-28. This Workshop offers surety professionals insight into the current trends in federal construction procurement and the laws and regulations that can positively and negatively affect construction clients performing federal work. The Workshop will explore public-private partnerships, joint ventures, teaming agreements, mentor-protégé agreements, Small Business Administration certification, keys to finding federal construction work, as well as a discussion on considerations relating to the False Claims Act. NASBP is offering the workshop again, because it was well-received last year. I look forward to seeing you in Washington, D.C. in June!

The surety industry overall had another very good year. Some sureties had incredible numbers and others experienced loss ratios more indicative of a construction economy that is depressed. In talking to surety executives these past few weeks, many attribute the positive returns to balance sheets that entered the downturn in good shape and to good communications between the surety agent and contractor with regard to addressing the contractors’ lack of work. Underwriting discipline for the most part has not been compromised. Though construction spending will be constrained for the foreseeable future, this is an opportunity for the professional NASBP bond producer to continue to demonstrate the value that we bring by helping contractors maintain healthy balance sheets and communications among their surety partners. The sureties executives we spoke with acknowledged that, overall, the agents they deal with that are members of the NASBP are trusting partners that are invaluable in today’s market. One surety executive said, “I can’t imagine the surety industry without the NASBP.” Both affiliates and members have told me that they believe that we are light years ahead of where we were five years ago. Such comments are gratifying to hear. Though 2012 will continue to challenge all of us, NASBP will be here to provide the resources we need to prosper in this environment. The momentum NASBP has created on the legislative front will continue along with the communications and educational offerings, such as the NASBP SmartBrief, Pipeline, NASBP Virtual Seminars, Federal Contracting and Sales Workshops, and NASBP William J. Angell Surety School.

The NASBP Annual Meeting in Orlando is around the corner. I am excited about the programs that Paul Amstutz and Tracy Tucker, my Annual Meeting co-chairs, along with my Program Committee, have put in place. Bethany Jones has been frantically working on the final details. The NASBP Annual Meeting is an incredible undertaking, and Bethany has done a great job putting all the pieces together. I am especially pleased to learn that almost 30 of the 46 of the 5-15 Leadership Circle members are registered for the Annual Meeting. This group represents surety professionals with more than five years’ and less than 15 years’ experience. The 5-15 Leadership Circle is a valuable committee where young bond producers can become more familiar with the Association and industry to fulfill leadership positions eventually in the Association. Based on this turnout, the 5-15 Leadership Circle is delivering on its objective. If you want to join the 5-15 Leadership Circle, please contact Ann Latham at NASBP at alatham@nasbp.org.

This is my last Pipeline column as NASBP President. This year has flown by unlike any year I have experienced. Last year, when I wrote my first Pipeline column as President I talked about how thankful I was for the encouragement and support I received as I prepared to accept the Presidency. Since then, the staff of NASBP and surety professionals from all over have continued to guide, educate, and inspire me. I want to thank everyone. This year has been rewarding to me—not for anything that I have done but—for the numerous things accomplished by our staff and by NASBP members, affiliates, and associates. There are plenty of challenges ahead. Threats to our product are commonplace. Some states are doing studies to see if bonds are worth the fee and if less costly products are feasible. If we do not advocate strongly for the surety industry, the surety bond will become obsolete. As I close, I ask that every one of you get involved with NASBP. Help us sustain the incredible momentum we have created!

Katie and I look forward to seeing you all in Orlando.

Best Regards,

John M. Rindt
NASBP President
 

John M. Rindt is Executive Vice President of JDW Insurance in El Paso, TX. John can be reached at jrindt@jdw-insurance.com.