The global surety market is anticipated to reach $24.4 billion by 2031, growing from $16 billion in 2021 at a CAGR of 4.4% from 2022 to 2031.
The surety market is a subset of the insurance industry that specializes in the provision of bonds and guarantees. A surety bond is a financial claim issued by an insurance company in the form of a 'Guarantee' that certifies one party's successful performance under a contract to another. In the event that specified obligations are not met, the bond provides monetary compensation.
The purpose of a surety bond is to protect the obligee from financial loss if the principal fails to meet their obligations. The surety bond provides a guarantee that the obligee will be compensated for any losses incurred as a result of the principal's failure to meet their obligations. These factors drive the surety market growth. One of the benefits of surety bonds are financial protection, wherein surety bonds can protect business from financial losses if something goes wrong. For example, if contractor fails to complete a job, the bond will cover the cost of any damages incurred by the client. Many clients will only hire contractors who have surety bonds. This is because they understand that the bond ensures that they will be compensated if something goes wrong.
If the surety-guaranteed contract is broken, the third party will be responsible for covering the costs. This usually happens when the person who is responsible for fulfilling these obligations is sick or injured and is unable to pay. The growth of the surety sector is anticipated to be constrained by the need for insurers to guarantee that investments made by potential investors in contracts with companies with headquarters in foreign trade and legal countries would be repaid in the case of insolvency.
Small and medium-sized enterprises (SMEs) and service providers can be shielded against customer late payments by surety insurance. Many businesses are also seeking innovative ways to trade to grow internationally and get a greater market share. Furthermore, surety insurance is becoming increasingly well-liked as a strategy for surety market companies to grow sustainably, encouraging small business owners to embrace it as a secure method of obtaining funding. The industry is expanding due to the increase in small and medium-sized enterprises attempting to enter the global market as well as the numerous advantages provided by surety insurance.
The COVID-19 pandemic brought several uncertainties leading to severe economic losses as various businesses across the world were on a standstill. The COVID-19 outbreak forced participants in the construction sector to temporarily cease their operations. The COVID-19 pandemic's numerous problems and the weak end-user demand have severely impeded the growth of the surety industry. There have been significant financial losses as a result of the COVID-19 epidemic forcing the closure of numerous enterprises across the globe. The COVID-19 epidemic had an effect on practically every industry in the world. Due to the limitations, lockdown enforced across numerous nations, and personnel shortage, surety insurance companies suspended operations. Additionally, the market's demand was subdued due to consumer apprehension of contracting the new coronavirus..
The key players profiled in this report include 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, and IFIC Security Group.
The surety market is a subset of the insurance industry that specializes in the provision of bonds and guarantees. A surety bond is a financial claim issued by an insurance company in the form of a 'Guarantee' that certifies one party's successful performance under a contract to another. In the event that specified obligations are not met, the bond provides monetary compensation.
The purpose of a surety bond is to protect the obligee from financial loss if the principal fails to meet their obligations. The surety bond provides a guarantee that the obligee will be compensated for any losses incurred as a result of the principal's failure to meet their obligations. These factors drive the surety market growth. One of the benefits of surety bonds are financial protection, wherein surety bonds can protect business from financial losses if something goes wrong. For example, if contractor fails to complete a job, the bond will cover the cost of any damages incurred by the client. Many clients will only hire contractors who have surety bonds. This is because they understand that the bond ensures that they will be compensated if something goes wrong.
If the surety-guaranteed contract is broken, the third party will be responsible for covering the costs. This usually happens when the person who is responsible for fulfilling these obligations is sick or injured and is unable to pay. The growth of the surety sector is anticipated to be constrained by the need for insurers to guarantee that investments made by potential investors in contracts with companies with headquarters in foreign trade and legal countries would be repaid in the case of insolvency.
Small and medium-sized enterprises (SMEs) and service providers can be shielded against customer late payments by surety insurance. Many businesses are also seeking innovative ways to trade to grow internationally and get a greater market share. Furthermore, surety insurance is becoming increasingly well-liked as a strategy for surety market companies to grow sustainably, encouraging small business owners to embrace it as a secure method of obtaining funding. The industry is expanding due to the increase in small and medium-sized enterprises attempting to enter the global market as well as the numerous advantages provided by surety insurance.
The COVID-19 pandemic brought several uncertainties leading to severe economic losses as various businesses across the world were on a standstill. The COVID-19 outbreak forced participants in the construction sector to temporarily cease their operations. The COVID-19 pandemic's numerous problems and the weak end-user demand have severely impeded the growth of the surety industry. There have been significant financial losses as a result of the COVID-19 epidemic forcing the closure of numerous enterprises across the globe. The COVID-19 epidemic had an effect on practically every industry in the world. Due to the limitations, lockdown enforced across numerous nations, and personnel shortage, surety insurance companies suspended operations. Additionally, the market's demand was subdued due to consumer apprehension of contracting the new coronavirus..
The key players profiled in this report include 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, and IFIC Security Group.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the surety market analysis from 2021 to 2031 to identify the prevailing surety market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the surety market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global surety market trends, key players, market segments, application areas, and market growth strategies.
Key Market Segments
By Bond Type
- Contract Surety Bond
- Commercial Surety Bond
- Fidelity Surety Bond
- Court Surety Bond
By End-User
- Individuals
- Enterprises
By Region
- North America
- U.S.
- Canada
- Mexico
- Europe
- Germany
- UK
- France
- Spain
- Italy
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- South Korea
- Australia
- Rest of Asia-Pacific
- LAMEA
- Brazil
- Saudi Arabia
- United Arab Emirates
- South Africa
- Rest of LAMEA
Key Market Players
- crum & forster
- CNA Financial Corporation
- American Financial Group, Inc.
- The Travelers Indemnity Company
- liberty mutual insurance company (u.k.) limited
- the hartford
- HCC Insurance Holdings Inc.
- Chubb Limited
- AmTrust Financial Services
- IFIC Security Group
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Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: SURETY MARKET, BY BOND TYPE
CHAPTER 5: SURETY MARKET, BY END-USER
CHAPTER 6: SURETY MARKET, BY REGION
CHAPTER 7: COMPETITIVE LANDSCAPE
CHAPTER 8: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to the report titled, “Surety Market," the surety market was valued at $16 billion in 2021, and is estimated to reach $24.4 billion by 2031, growing at a CAGR of 4.4% from 2022 to 2031.A surety is a party that guarantees another party's payment of one party's debt. A surety is a company or someone who agrees to pay the debt in the event that the debtor policy is in default or is unable to make the payments. A surety is most frequently used in contracts if one party has doubts about the counterparty's ability to meet all obligations. In order to lower risk, the party may demand that the counterparty provide a guarantor, who will then enter into a contract of suretyship. By doing this, the lender's risk should be reduced, which could result in lower interest rates for the borrower. A surety bond is one example of a surety. The Surety Bond Insurance, in contrast to a bank guarantee, does not call for substantial collateral from the contractor, freeing up substantial assets that the contractor might use to expand their firm. Surety bonds offers financial security by assuring project owners that the contractors will perform the task assigned to them and other people involved in value chain such as raw material suppliers, laborers, and subcontractors will get paid in timely manner.
Key factors driving the growth of the surety market use of surety bonds rather than bank guarantees can have significant advantages. For instance, they assist in maintaining bank limitations for other uses like working capital and hedging or to finance expansion plans, acquisitions, and investments. They are frequently unsecured and typically subordinate to holders of senior securities. Facilities might be committed, uncommitted, or a combination of the two. They are often less expensive than bank guarantees and have lower volatility than bank guarantees. Surety bonds can be offered directly to the beneficiary, or through a bank-fronted structure, in which the bank issues a guarantee on behalf of the contractor, but the beneficiary does not accept the guarantee.
The market also offers growth opportunities to the key players in the market. Surety bonds have recently found a variety of new applications. Surety bonds have recently found a variety of new applications. Mining, oil, and gas corporations are required by state and federal governments to provide a financial guarantee in favor of the government as security for their responsibility to rehabilitate their sites upon the termination of operations. Typically, this has taken the form of a bank guarantee, or if the company is highly rated, a corporate guarantee may be approved. As a result of the frequently sizable liability and the detrimental impact that bank guarantees have on corporate lending limits, the government is collaborating with a number of counterparties in the mining, construction, and gas, state government, and surety industries to develop the market's acceptance of surety rehabilitation bonds. In the meantime, bank-backed surety bonds could be a better alternative for bank security.
The surety market is segmented into bond type, end-user, and region. On the basis of bond type, the market is categorized into contract surety bond, commercial surety bond, fidelity surety bond, and court surety bond. On the basis of end-user, it is categorized into individuals and enterprises. Region wise, it is analyzed across North America (the U.S., Canada, and Mexico), Europe (the UK, Germany, France, Italy, Spain, and rest of Europe), Asia-Pacific (China, India, Japan, Australia, and rest of Asia-Pacific), and LAMEA (Brazil, Saudi Arabia, UAE, South Africa, and rest of LAMEA).
The key players profiled in the study include Harkness Screen, Galalite Screens, EKRAN, Severtson Screen, Samsung, Ballantyne Strong, IMAX, Sony, RealID Inc. The players in the market have been actively engaged in the adoption various strategies such as acquisition, product launch and expansion to remain competitive and gain an advantage over the competitors in the market. For instance, in December 2022, India’s first surety bond insurance product was introduced by the Indian government minister of roads, transport, and highways. This will lessen the reliance of infrastructure projects on bank guarantees. For infrastructure projects, surety bond insurance will serve as a security measure and will protect both the principal and the contractor. The item will meet the needs of a variety of contractors, many of whom are engaged in business in today's increasingly unstable climate.
Key Market Insights
- Based on bond type, the contract surety bond sub-segment emerged as the global leader in 2021 and the commercial surety bond sub-segment is anticipated to be the fastest-growing sub-segment during the forecast period.
- Based on end-user, the enterprise sub-segment emerged as the global leader in 2021 and is projected to maintain the position during the forecast period.
- Based on region, the North America surety market registered the highest market share in 2021, and Asia-Pacific is anticipated to be the fastest-growing during the forecast period.
Companies Mentioned
- crum & forster
- CNA Financial Corporation
- American Financial Group, Inc.
- The Travelers Indemnity Company
- liberty mutual insurance company (u.k.) limited
- the hartford
- HCC Insurance Holdings Inc.
- Chubb Limited
- AmTrust Financial Services
- IFIC Security Group
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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