Anderson & Catania Surety Services has access to over 40 surety bond companies. Richard G. Anderson, CEO of Anderson & Catania Surety Services LLC, discusses why having this expansive access to the bonding marketplace puts AC Surety at an advantage and how contractors can determine if their bonding company is financially stable.
How do contractors benefit from A&C’s broad access to bonding companies?
With 40 bond companies, we are not dominated by a few companies. This is critical when bond companies change their underwriting due to their own circumstances. (e.g., bad financial results, lack of qualified personnel, revision of market niche, and risk profiles, to name a few.)
The ever-changing surety bond marketplace mandates that we maintain a discipline to offer our clients flexibility in order for them to achieve their financial success.
Does the surety bond credit market follow or mirror any other type of credit market, like banking or the stock markets?
The closest financial model is banking where financial ratios come into play to evaluate financial worthiness.
Bonding companies are more oriented toward liquidity and financial capacity in their ideal situations.
The most important thing to remember is that bonding companies extend surety support on an unsecured basis. Bank credit is secured credit.
Contact our surety bond specialists at email@example.com or give us a call to learn more!
There are many ironies in the surety bond industry and one of the largest ironies is: the principles that the bond companies want to see a contractor perform in that controlled growth, profitable growth, predictable results, they, the industry does not follow themselves.
There have been many instances where there have unrealistic growth goals by surety industry, compromising on underwriting discipline, decision-making in certain regions that seem unrealistic and a combination of these can be lethal to a surety bond company’s financial results.
When this happens, the fallout from underwriting and the predictability for our clients or any contractor to go forward in a predictable manner with their surety bond credit can be severely compromised. The worst that can happen is a contractor cannot get that next bid security or next performance bond when the bond company changes the rules in very short order or in the middle of the year.
So, the importance of the surety bond agent is to be sensitive to the market conditions, what is happening not only in their region but all over the country because that can have a severe negative impact on the factors that a contractor desires…that when they need that bond, their bond company is there.