Surety Market is expected to grow at a CAGR of 7.5% to 2027 - American Financial Group, AmTrust Financial Services, Chubb, CNA Financial, Crum & Forster, Hartford Financial Services, HCC Insurance Holdings, IFIC Surety, Liberty Mutual Insurance, The Trave

The global surety market at US$ 15.33 Bn in 2018 and is expected to grow at a CAGR of 7.5% during the forecast period 2019 – 2027, to account to US$ 28.77 Bn by 2027.

The Surety market penetration rates in North America region is higher than any other markets across the globe. This is attributed to most of U.S. State governments’ laws that mandate surety bonds. Both the U.S. and Canada Surety markets are ruled by insurers, and banks play only a minor role. In APAC region, the Surety market is expected to flourish during the forecast period. This growth is highly attributed to the increasing commercial and residential construction in the emerging economies of the region.

Market Insights

Contract surety bond holding nearly half of the surety market share

Contract Surety Bonds deliver financial security as well as construction assurance on construction and building projects by guaranteeing the project owner that the contractor is competent to accomplish the work and will pay certain subcontractors, material suppliers, and laborers. These bonds are used principally in the construction industry. The growth of both public and private construction sector coupled with stringent government regulations for contract surety bonds, the market is anticipated to flourish during the forecast period.

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Acceptance of Public Private Partnership (PPP) Model to propel surety market growth

The gaining popularity of PPP in both developed, as well as emerging economies worldwide, is one of a major driver for Surety market. Infrastructure investment and development are the main concern for governments across the globe. With increasing urbanization, the emerging economies are witnessing a need to develop their critical infrastructure, while developed economies are in need to expand or reconstruct their existing assets. The enduring evolution in PPP model is noticed with increased demand for infrastructure development as well as growing fiscal constraints, to support governments’ fulfill these escalating infrastructure challenges.

Merger & Acquisition to be the key strategy

Merger and acquisition is expected to be the key growth strategy to be adopted by players for next two-three years. However, this strategy could impact competition, it is also expected to generate new market as well as product opportunities as recently combined companies will thrive to maintain position and profitability.

Bond Type Insights

The Surety market by revenue model is led by contract surety bond. The most common surety bonds are the commercial and contract surety bond and serve the purpose of protecting the public and private interests. The court and fidelity surety bonds protect against the litigation and theft. Surety bonds of all types cost a premium based on the performance of the business and credit score of the business owner which is between 1-15% of the bond value.

Strategic Insights

The market cycles for surety and construction have been stable, resulting in increased competition. With the falling oil & gas prices, the current market scenario requires diligence as well as constant high underwriting standards. Terms and conditions related to underwriting are loosening as surety players are fiercely endeavoring to grow market share. Some of the key developments noticed in the surety market are listed below:

2018: AmTrust Financial Services, Inc. entered into an amendment to the merger agreement with Evergreen Parent, L.P., under this agreement Evergreen parent will acquire approximately 45% of the Company's shares of common stock.

2018: American Financial Group announced entering into an agreement to acquire ABA Insurance Services Inc. for approximately US$ 28 Mn. This acquisition is aimed to strengthen the position of the company in the market.

2018: Chubb Limited entered into an agreement with Citibanamex which is a subsidiary of Citi Bank to market Chubb’s products through its branches and other marketing channels. Citibanamex also agreed to market surety products to Citibanamex commercial customers.

Leading Surety Market Players:

• American Financial Group, Inc.
• AmTrust Financial Services, Inc.
• Chubb Limited
• CNA Financial Corporation
• Crum & Forster
• Hartford Financial Services Group, Inc.
• HCC Insurance Holdings
• IFIC Surety Group
• Liberty Mutual Insurance Company
• The Travelers Indemnity Company

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Key Elements that the report acknowledges:

• Market size and growth rate during forecast period.
• Key factors driving the Surety Market.
• Key market trends cracking up the growth of the Surety Market.
• Challenges to market growth.
• Key vendors of Surety Market.
• Detailed SWOT analysis.
• Opportunities and threats faces by the existing vendors in Global Surety Market.
• Trending factors influencing the market in the geographical regions.
• Strategic initiatives focusing the leading vendors.
• PEST analysis of the market in the five major regions.

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This release was published on openPR.