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Survey Report

Insurance Marketplace Realities 2023 Spring Update – Surety

April 28, 2023

Surety companies continue to be profitable, and we continue to have adequate capacity to meet our clients’ needs.
Rate predictions: Surety
Trend Range
Surety neutral Flat
  • 2023 will be a challenging year for the surety industry, as the global economic growth slows down (2.1% as compared to a 3.4% growth in 2022) due to high inflation and tightening financial conditions, which will dilute investment growth. In addition, high construction material costs and labor shortages will further constrain the construction industry. Uncertainty in the domestic and global marketplace will create greater demand for surety products, while at the same time making underwriting more invasive. Claims and defaults are not expected to increase, but capacity could be lower than previously available for all but the strongest credit.
  • Despite a subdued global construction market, international surety bonding is expected to expand as international owners are recognizing the unique protections and benefits of a surety bond compared to a bank LOC, as well as owners trying to diversify risk away from banks. New opportunities will arise in countries where there is tight liquidity and where the ongoing supply chain challenges negatively impact schedules.
  • Technology, retail and financial services will be challenging for surety growth due to contraction in these industries. Energy, traditional and alternative will continue to be a focus for revenue growth. The cost, demand and supply of surety products for these bonds will push the segments higher.
  • Surety underwriting changes can develop quickly and may result in large deviations in program terms. If large loss activity develops in the contract or commercial lines of business, a more rapid change in terms is probable.
  • The collapse of Silicon Valley Bank (SVB) may have a global ripple effect. This failure and the failures of two additional banks that followed in March will be felt in many ways. The impact on the excess deposit bonds has led to several surety companies exiting the product altogether, with most other sureties freezing credit for regional and local banks. The largest national banks still have capacity for existing and new obligations, however, with increased scrutiny. Demand for larger limits on the deposit bonds will continue as funds flow to the larger banks. Upward rate pressure is to be expected.
  • The talent shortage in surety lingers; however, it is driving hiring and training not experienced in the industry for decades. The newly minted underwriters fill the many open positions and will benefit clients as they mature.


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 entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


Scott Hull
Global Head of Surety, Corporate Risk and Broking

Goly Jafari
Global Head of Surety Strategy and Operations

Jeff Broyles
North America Commercial Surety Leader

Douglas Wheeler
North America Contract Surety Leader

Waiman Yeung
International Surety Leader

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