According to the new research report published by The Insight Partners, titled “Surety - Global Analysis and Forecast to 2027”, the global surety market is expected to reach US$ 28.77 billion in 2027, registering a CAGR of 7.5% during the forecast period 2019-2027.
In 2018, North America accounted for the largest market share, growing at a CAGR of 7.4%
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.
In the recent few years, surety market has noticed noteworthy M&A and partnership activity. Some of the significant deals include 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. Also, 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.
Surety market is segmented on the basis of bond type. The contract surety bond by bond type is expected to dominate the surety market during the forecast period. The contract bond captures a significant share of the surety bond market and is growing continuously due to rapid increase in construction activities in various regions like APAC, Europe, and MEA. The contract surety bonds are replacing other guarantee methods such as bank guarantees and pay on demand services.
Key findings of the study:
South Korea holds the largest surety market share in APAC region. This growth is attributed to legal bonding requirements in the country for public and infrastructure construction projects. Also, commercial surety segment in South Korea is benefited from obligatory bonding requirements.
Majority of the countries have not witnessed significant increase in the number of global surety players entering in their market in the recent past. However, Europe, on the other hand, has noticed a slight expansion of global players’ entering markets to fulfil the demand.
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.
Some of the key players operating in the surety market are AmTrust Financial Services, Inc.; Crum & Forster; CNA Financial Corporation; American Financial Group, Inc.; The Travelers Indemnity Company; Liberty Mutual Insurance Company; Hartford Financial Services Group, Inc.; HCC Insurance Holdings; IFIC Surety Group; and Chubb Limited among others.
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