The surety industry has experienced high-profile mergers and departures in recent years. Although an agent’s ability to gain access to new markets is not super competitive, there are fewer sureties to choose from. Nonetheless, having qualified clients can mean that a surety producer has a solid market in which to grow and be successful.
For a new or seasoned surety producer, it can be difficult to get qualified clients for standard surety providers amongst dealing with clients that have increasing requirements but degraded profiles. Below we have identified some keys to success based on what companies, contractors and individuals are looking for in a surety bond producer.
What Makes a Good Surety Producer?
A surety producer that has an established reputation has a solid understanding of the surety industry as well as the construction industry (for contract bonds). Potential clients know that the difference between a good surety producer and the other guys is their ability to place any client and provide sage advice. In many situations, the surety producer placing contract bond clients can be the difference between approvals and declinations, sizeable bonding limits, collateral requirements and more. For commercial producers, being mindful of the principal’s personal credit, how to obtain the best rate, and knowing which surety bond underwriting companies to work with is important. Let’s dive into some of the specifics.
Interest in Clients’ Success
Taking an interest in seeing your accounts grow is a trademark of a dedicated bond producer. This holds especially true in contract bonds. If a contractor feels that their producer is only looking out for themselves and only cares about a booking premium then they are likely to look for someone new. Additionally, a producer who has intimate knowledge of the construction industry as well as construction law will be more effective in contract surety. This dedication to understanding a clients’ industry will help you become more reputable in their eyes.
Solid Industry and Underwriter Relationships
At Cinium we encourage our producers to develop good relationships with their clients so that providing honest evaluations becomes easier. A good relationship will make it easier to avoid instances of false promises in terms of telling a client they have a good chance of getting a bond when you have evaluated otherwise. At Cinium, our underwriting process is not based on credit alone so the more we know about your clients will help determine bond approvals, premiums and rates.
Where construction bonds are on the line, a producer with an intimate knowledge of the construction industry can prove useful. These skillsets will allow an account to be properly evaluated with reasonable expectations prior to sending the application to an underwriter. Some surety producers will simply send off applications to every resource available with the thoughts that one of them will procure a reduced rate. This is not considered good practice. However, if an agent has a history of sending properly evaluated applications then the underwriters might take into account this consistency and deliver more favorable results.
In addition to submitting applications that are likely to get rejected, an agent can also be creating problems with the credit of their clients. If an application is submitted to multiple destinations this also results in multiple credit checks, thus lowering the owner’s credit score. A more important issue is that many bond companies will not review a bond the same bond application twice once it has been rejected.
Reputable bond producers establish a name for themselves by having a vested interest in the companies and success of their clients. An intimate knowledge of your clients’ businesses, goals and processes helps you to form better applications or make business suggestions that can prove useful to their ability to acquire surety bonds. Rather than being concerned about booking the best premium, build rapport with your clients based on how your methods can help them to grow their business. As you develop a connection with your clients you will build your book with repeat clients rather than just short term profits. Your relationships with your clients and your underwriters can also help to avoid declinations and to foster trust as a knowledgeable agent. Finally, your knowledge of the surety marketplace can help to ensure the success of your client and potentially grow your relationship and reputation.
For more information on how we help surety bond agents succeed, contact Cinium today.