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

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Surety Market Forecast to 2027 - COVID-19 Impact and Global Analysis by Bond Type (Contract Surety Bond, Commercial Surety Bond, Fidelity Surety Bond, and Court Surety Bond), and Geography

Publication Month: Jul 2020 | Report Code: TIPRE00002849 | No. of Pages: 134 | Category: Manufacturing and Construction | Status: Published

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

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

Report Coverage - Surety Market
Report CoverageDetails
Market Size Value inUS$ 16.07 Billion in 2019
Market Size Value byUS$ 25.18 Billion by 2027
Growth rateCAGR of 6.4% from 2020-2027
Forecast Period2020-2027
Base Year2020
No. of Pages134
No. of Tables29
No. of Charts & Figures58
Historical data availableYes
Segments coveredBond Type , and Geography
Regional scopeNorth America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country scopeUS, Canada, Mexico, UK, Germany, Spain, Italy, France, India, China, Japan, South Korea, Australia, UAE, Saudi Arabia, South Africa, Brazil, Argentina
Report coverageRevenue forecast, company ranking, competitive landscape, growth factors, and trends
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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

Frequently Asked Questions

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.
Ageing power generation and distribution infrastructure are becoming a key biggest challenges for utilities in developed countries. For instance, in the U.S., the power grid is believed to be valued an estimated US $876 Bn, renovating infrastructure would cost hundreds of US$ Bn, as per the U.S Department of Energy. Furthermore, certain countries in the European region are citing the same issues.Upgrading generation, as well as transmission facilities in these countries, would draw significant investments hence, the Surety market is expected to bolster.
Contractbonds protects the owners in case a contractor backs out after winning a bid after the contractor wins a bid accepts to work on the project bid bond is replaced by a performance bond. The erformance surety bond protects the owner if the work done by the contractor is not according to the terms in the contract. The contract bond captures a significant share of the surety 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 like bank guarantees and pay on demand services.

The List of Companies - Surety Market

  1. CRUM & FORSTER
  2. CAN Financial Corporation
  3. American Financial Group, Inc.
  4. The Travellers Indemnity Company
  5. Liberty Mutual Insurance Company
  6. The Hartford
  7. HCC Insurance Holdings, Inc.
  8. CHUBB
  9. AmTrust Financial Services
  10. IFIC Security Group
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