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By the end of 2018, the construction and surety industries remained robust and resilient. For most contractors, backlogs are as strong as they have been in over a decade, margins have returned to pre-recession highs and work is abundant. For surety companies, profits are at an all-time high, loss margins remain low and demand for bonding, along with total spending in the building industry, continues to grow across the nation. According to the U.S. Census Bureau, total construction spending in 2017 was $1.24 trillion and is expected to grow to over $1.35 trillion by the end of 2018. Along with construction spending, the surety industry’s historic results have continued to improve. Since 2012, the direct written premium for the industry has grown from $5 billion to over $6.2 billion at the end of 2017, an increase of over 23 percent. And the industry does not appear to be slowing down any time soon, with projected direct written premiums of more than $6.5 billion in 2018. The continued results and positive forecast for both underwriters and contractors have many wondering, “When is the market going to reach its boiling point and how do I prepare for the inevitable decline?” Many subcontractors, overextended with work opportunities and thin on resources, have started to show signs of struggling and an increase in defaults. This growing frequency of subcontractor defaults has resulted in some of the industry’s largest sureties experiencing significant general contractor failures domestically and internationally. Rather than speculate, surety reinsurers are beginning to institute firmer underwriting compliance standards for front-line sureties. In response, surety underwriters are depending even more on their clients and agents to proactively manage their operation and risks associated with growth in an expanding economy. “Best-in-class” contractors are using the market’s positive growth and outlook to focus on what they do best and intelligently grow their backlogs, rather than over extending themselves by taking on work far outside their abilities and capacity. As growth continues, three main questions continue to be at the top of all contractors’ and underwriters’ minds: labor shortages, material costs and governmental policies. CONTINUING LABOR SHORTAGES The ability to attract and retain skilled labor is the number one concern of general contractors, subcontractors, suppliers and vendors. Although the quantity of skilled labor has increased in recent years, it has not kept up with the increase in construction spending. As a result, the industry is experiencing one of the largest labor shortages in history. The 2008 recession saw backlogs shrink and contractors were focused on managing overhead and ensuring sustainability. To survive, many had to make difficult decisions to lay off key employees, opting to keep only the most vital roles filled. Many of the employees who were laid off were unable to find work and forced to retire or seek employment in other industries. At that time, training and developing the construction industry’s future work force and leaders were non-existent. In addition, high schoolers became more focused on four-year college placement as opposed to joining the workforce immediately upon graduation or learning a trade. Today’s contractors are feeling the long-term effects of this mass exodus in the construction labor market and, now with demand at an all-time high, contractors simply don’t have the supply of skilled labor to match the need. The year 2018 marked that largest gap in growth between new construction employment and construction spending since post-recession. Read More … http://constructionexec.com/article/surety-outlook-2019-the-peak-of-the-cycle

AmTrust Financial Services; Crum & Forster, American Financial Group; The Travelers Indemnity Company; Liberty Mutual Insurance Company Surety Market report aims to provide a 360-degree view of the market in terms of cutting-edge technology, key developments, drivers, restraints and future trends with impact analysis of these trends on the market for short-term, mid-term and long-term during the forecast period. Further, the report also covers key players profiling with detailed SWOT analysis, financial facts and key developments of products/service from the past three years. Global surety market is expected to grow from US$ 15.33 Bn in 2018 to US$ 28.77 Bn in 2027 at a CAGR of 7.5% between 2019 and 2027. The report aims to provide an overview of the global surety market with detailed market segmentation. Also, it analyzes the current surety market scenario and forecasts the market till 2027. The report covers market dynamics affecting the surety market during the forecast period. Furthermore, the report analyzes the competitive scenario, geographic trends, and opportunities in the surety market with respect to all geographic regions. The report also includes the detailed company profiles of the key players in the surety market along with their market strategies. The report also provides the SWOT analysis for all company profiled in the report. Request Sample Copy is Available at: bit.ly/2Sug3do The report enables you to: Formulate significant competitor information, analysis, and insights to improve R&D strategies Identify emerging players with potentially strong product portfolio and create effective counter strategies to gain competitive advantage Identify and understand important and diverse types of Surety under development Develop market entry and market expansion strategies Plan mergers and acquisitions effectively by identifying major players with the most promising pipeline In-depth analysis of the product’s current stage of development, territory and estimated launch date Surety market is experiencing good growth across all the geographical regions of the globe, with the increasing demand for infrastructural development as well as residential construction. Furthermore, the rising adoption of public-private partnership model is another factor fueling the growth of the market. The major companies operating in the surety market include 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. The report focuses on an in-depth segmentation of the Surety market based on bond type. The geographic segmentation of the report covers five major regions including; North Americas, Europe, Asia-Pacific (APAC), Middle East and Africa (MEA) and South America (SA). The regional market has been further bifurcated by respective countries. By bond type, contract surety bond accounted for the largest share of the surety market in 2018. Don’t miss out on business opportunities in Surety Market. Speak to our analyst and gain crucial industry insights that will help your business grow. Currently, the surety market penetration rates in the 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 majorly ruled by insurers, while banks also play a significant role. However, SAM and APAC region are anticipated to grow at the highest CAGR. Read More… https://www.openpr.com/news/1578564/Surety-Market-to-Achieve-Significant-Growth-in-the-Near-Future-AmTrust-Financial-Services-Crum-Forster-American-Financial-Group-The-Travelers-Indemnity-Company-Liberty-Mutual-Insurance-Company.html

DES MOINES, Iowa — Iowa Attorney General Tom Miller is busy making sure Iowans know a scam when they see one. Miller is cracking down on contractors. He proposed a new law that would require contractors to have a $75,000 bond they would pay customers if they fail to complete a job properly. The Attorney General’s office says the number of complaints against contractors rose 28 percent in the last year alone. The Attorney General isn’t only cracking down on contractors. Miller also wants to find out if you or someone you know has received a postcard that he says is not from the federal government. The cards were sent to more than 61,000 Iowans. There’s a picture of the US Capitol on it. It’s stamped “official business” and promises free government benefits. But, it’s actually an insurance pitch. The Missouri company who mailed the cards has been ordered to stop. The company also has to pay a $5,000 fine. https://www.kcci.com/article/brewery-gaining-national-attention-for-infusing-native-american-roots-in-beers/26304952

With a historic law overhauling California’s cash bail system on hold, bail customers on Tuesday filed a class-action lawsuit against more than 20 surety companies and agents in the state, alleging they have conspired to keep premiums high for criminal defendants. The antitrust case, which the plaintiffs’ attorneys said could be the first of its kind in the country, alleges that the companies worked together since at least 2004 to fix prices and prevent competition in the market, discouraging bail agents from offering discounts or rebates in private meetings and messaging at industry conferences, and retaliating against those who refused. The lawsuit was filed by four public interest groups on behalf of people who, according to the complaint, paid maximum prices for bail bonds as they sought their or someone else’s release from jail and later struggled to pay the debt. They are requesting that a judge stop the sureties from engaging in alleged “cartel pricing” practices and collecting assets on debt, according to the complaint filed in Alameda County. They want the court to order the bail surety businesses, companies that underwrite bonds, to pay damages to alleged victims and correct all alleged misleading statements in print and online materials. “What makes this case particularly important is that the product being fixed is not a consumer good but someone’s freedom,” said attorney Dean Harvey, who is lead counsel on the case. “It is about whether a presumptively innocent person is able to go to their job or not, take care of their children or not.” Greg “Topo” Padilla, president of the Golden State Bail Agents Assn., one of the associations named in the lawsuit, said he had not seen the complaint and could not speak to its allegations. But, “we have fought for years to lower bail schedules, which would lower premiums,” he said. “We have been stopped at every one of these attempts by the Legislature.” Calls to other bail agents and associations named in the lawsuit were not immediately returned on Tuesday. The lawsuit is the latest volley against a bail industry locked in a fierce battle with California lawmakers and court officials determined to abolish a system that they say has run unchecked for years and preys on the most vulnerable. Gov. Jerry Brown last year signed a law that would prevent courts from using fixed money bail fees in releasing people from jail while their cases are pending, granting greater power to judges and county agencies to decide which defendants pose a risk to public safety. But the effort is now on hold until voters decide its fate in November 2020 — elections officials this month certified a statewide referendum backed by a coalition of bail industry associations. Bail companies, which can continue doing business until the election, are gearing up for a campaign fight against a law that could spell extinction for their industry in California. The state holds roughly a quarter of the $2-billion market nationwide and has 3,200 registered bail agents. Bail companies and sureties have faced civil cases in the past over allegations of malpractice and fraud, among other things. But attorneys in the suit filed Tuesday say it appears to be the first in the country that seeks to build wider conspiracy charges based on antitrust and consumer laws. Under the current pretrial system, judges must factor in a defendant’s ability to pay as they set bail according to lists of criminal offenses and fixed fees. If a defendant is unable to post the amount in advance, a nonrefundable fee — typically a premium of 10% or less of that amount — can be paid to a bail company to front the money. Like other insurance companies in the state, bail sureties submit their maximum premium rates to the California Department of Insurance for approval. In 1998, California voters approved a law that allowed insurers to reduce premium rates for consumers, and a state court ruling in February 2004 confirmed “rebating” was legal, allowing bail agents to charge less than those premium rates, the class-action lawsuit states. But lawyers for the bail customers allege sureties have kept that premium rate at the maximum of 10% for most criminal defendants by concealing their industry’s option to charge lower rates and refraining from offering competitive rebates. Since 2004, the complaint alleges, surety representatives have agreed not to compete over premium prices and have directed bail agents not to do so, using bail industry associations “as a conduit for enforcing their price-fixing cartel down to the bail agent level.” Through blog posts and private meetings, industry-sponsored training courses and conferences, the industry keeps agents in check, the lawsuit claims. The complaint cites a course offered by the Bail Resource Center and Career Academy that teaches “the right answer on the test: no rebates.” A defendant named Jerry Watson, vice president of AIA Surety, the country’s largest bail surety administrator, “has publicly denounced price-cutting as a cancer” on the group’s website, according to the complaint. “Furthermore, the cartel intimidates competitors to toe the line,” the lawsuit says. “When competitors attempt to compete by offering lower rates or rebating, cartel members brand them as ‘break[ing] the law,’ despite knowing that to be false,” it says. At the center of the case is Aladdin Bail Bonds, the largest agency in California and its surety. The lawsuit alleges that Aladdin misleads its customers by asserting on its website that its fees “are standard and nonnegotiable” as required by law. The plaintiffs’ attorneys say they began working on the case before California state lawmakers passed Senate Bill 10 to overhaul the cash bail system. Its fate has no bearing on their complaint moving forward, they argue, because even if the state’s money bail system is eliminated, the law does not assist residents who paid inflated premiums and does not prevent surety companies from continuing to collect on debt. The complaint could include thousands of class members — from October 2011 to October 2015 alone, it states, about