Surety Market to Grow at a CAGR of 6.4% to reach US$ 25.18 Billion from 2020 to 2027

The surety market was valued at US$ 16.07 billion in 2019 and is projected to reach US$ 25.18 billion by 2027; it is expected to grow at a CAGR of 6.4%from 2020 to 2027.

The global surety market encompasses a substantial number of market players operating in it, resulting in a fragmented global market. However, the surety market include a selected number of prominent market players, such as The Travelers Indemnity Company, Liberty Mutual Insurance Company, The Hartford, Chubb, and CNA Financial Corporation, with the considerable customer base and strong market position. At present, the global surety market is dominated by the developed regions, such as North America and Europe, accounting for more than 75% of the global surety market collectively. Factors such as aging infrastructure in developed countries,need for massive restoration investment, and acceptance of P3 models are contributing significant market share consolidation of the surety marketcompanies in North America and Europe. However, the surety market in South Americais anticipated to gain a significant traction and expected to witness the most attractive growth rate during the forecast period.

Impact of COVID-19 Pandemic on Surety Market

The construction industry across the world was witnessing significant growth prior to the emergence of COVID-19 in late 2019. The outbreak of COVID-19 has led the construction industry players to temporarily call off their respective projects. Due to unprecedented impact of COVID-19 and uncertainty in economic conditions of developedand developing countries, the construction industry is expected to witness a slower growth till 2021. Attributing to the fact that surety market is heavily driven by construction industry, a slowdown in the growth of construction industry is reflecting downfall in surety market globally.

Lucrative Regions for Surety Market

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Surety Market Insights

Rising need for innovative insurance solutions to offer prosperous opportunity to surety market

There is a high requirement for innovative construction insurance in high growth markets such as China since, One Belt One Road Initiative is anticipated to offer growth opportunities to the surety market. In 2013, China’s President launched the One Belt, One Road Initiative as a foreign policy directive. The determined investment strategy aims to encourage Chinese as well as global economic growth. Considered as a “mega infrastructure project,” the initiative focus on attracting investment chiefly in the transportation and energy sectors, which includes roads, bridges, railways, ports, and power grids. Commercial insurance is expected to notice consequent progress in project-related premium income across the fastest growing global insurance market.As per Swiss Re, around US$7 million in commercial premium has been already produced by projects in progress. Moreover, an additional expected premium of US$ 27 billion could be generated to fund future investments leading to completion of lined up projects by 2030. Considering these factors, the surety market is anticipated to be benefitted by the One Belt, One Road Initiative.

Bond Type-Based Market Insights

Surety bonds are obtained by principal parties to protect third parties from a failure to meet contractual obligations. There are four main types of bonds that serve different purposes namely: contract surety bond, commercial surety bond, fidelity surety bond, and court surety bond. The most common surety bonds are the commercial and contract surety bond that  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% and 15% of the bond value.

Surety Market, by Bond Type– 2019 and2027

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Strategic Insights

The players in the surety market focus on strategies such as mergers, acquisitions, and expansion to newer geographiesto maintain their positions in the market. A few developmentsby key players are listed below:

In 2019,Liberty Mutual Insurance Company entered into an agreement to acquire the global surety and credit reinsurance operations of AmTrust Financial Services, including AmTrust Surety, AmTrust Insurance Spain, Nationale Borg, and Nationale Borg Reinsurance. The company believes that this acquisition strengthens its global surety, reinsurance expertise, market leadership, and geographic scope.

In 2018, CNA Financial Corporation opened its new global headquarters in Chicago; this relocation aimed to help the employees to connect all that CNA has to offer its customers.

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

Surety Market – by Bond Type

• Contract Surety Bond
• Commercial Surety Bond
• Court Surety Bond
• Fidelity Surety Bond

Surety Market– by Geography

• North America

  • US
  • Canada
  • Mexico

• Europe

  • France
  • Germany
  • Italy
  • UK
  • Spain
  • Rest of Europe

• Asia Pacific (APAC)

  • China
  • India
  • South Korea
  • Japan
  • Australia
  • Rest of APAC

• Middle East & Africa (MEA)

  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

• South America (SAM)

  • Brazil
  • Rest of SAM

Company Profiles

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