Commercial Surety Marketing Strategies That Produce Results Steven Swartz Paul Amstutz.

Commercial Surety

Marketing Strategies That Produce Results

Steven SwartzPaul Amstutz

NASBPCommercial Surety Online Reference Guide

• www.nasbp.org

• Free Access to Members

• Basic Introduction to Commercial Surety

• Provides Comprehensive Overview– Explanation of Obligation– Review of Underwriting Considerations– Termination Information

GO WHERE THE MONEY IS!

Commercial Surety Premiums/Loss Ratios(Estimated)

8 Years 1993-2000 Premium 6.0 Billion

Loss Ratio Less than 20% 3 Years 2001-2003 Premium 3.0 Billion

Loss Ratio Over 50%

4 Years 2004-2007 Premium 4.4 BillionLoss Ratio Less than 20%

Commercial SuretyFive Classes of Bonds – Estimated Premium/Loss Ratios

15 Yr Premium 15 Yr L/RLicense and Permit 5.0 Billion Under 15%

Miscellaneous Indemnity 4.5 Billion Approx 50%

Court – Judicial 1.7 Billion Under 20%

Court – Fiduciary 1.3 Billion Under 25%

Federal & Public Official .9 Billion Under 10%

How Have Agencies IncreasedProfits With Commercial Surety?

• Accident vs Planned

• High Commissions vs Costs

• Management Commitment – A Product Priority – A Key Component of the Business Plan

Developing a Commercial Surety Business Plan

• Identify Potential Needs/Opportunities– Isolate Current Production – Data Mine Agency Clientele– Brainstorm With Key Surety Personnel– Determine Access to Fortune 1000– Information Systems Capability

• Identify the “Best Fit” Surety Markets• Develop/Hire the Expertise

Commercial SuretyKnow the Marketplace

• Transactional Accounts

• Program Business

• Small and Mid-Size Accounts

• Large Regional/National Accounts


• Transactional Accounts

– Individuals/Businesses • One or two bonds a year

Transactional BusinessIdentify the Opportunities

• Never Pass One Up• Individuals

– Fiduciary Bonds– Judicial Bonds– Public Official Bonds

• Businesses– License & Permit Bonds– Judicial Bonds– Miscellaneous Bonds– Federal Bonds

Program Business

• Specialization– License & Permit Bonds– Miscellaneous Bonds– Federal Bonds

• Technology

• Marketing

• Pricing


• Small and Mid-Size Accounts– One Principal with Multiple Bond Needs

– Aggregate Program Under $10 Million


• Large Regional/National Accounts– One Principal with Significant Bond Needs– Aggregate Program in Excess of $10 Million– Publicly Held– The Fortune 1000

Increase Profits With Commercial SuretyIdentify/Measure Costs

• Marketing/Sales – Salaries/Benefits– Space Needs

• Processing– Salaries/Benefits – Space Needs

• Systems– Internal vs External– Paperless Environment

• Advertising– Bonds via the Internet

Developing a Commercial Surety Business Plan

• Prepare Cost/Benefit Analysis– Recommendation

• Prepare Marketing Plan– For Moderate Increase

• May Require No New Personnel or Systems

– For Large Program• Develop/Hire the Expertise

Small Account UnderwritingProgram < $10 Million Bonded Liability

• Industry Analysis– Short and Long Term Outlook

• Financial Analysis– CPA Prepared Financial Statements– Personal Credit Reports and D&B– Bank Line of Credit

• Obligation– Regulation– Bond Form

• Indemnity– General Indemnity Agreement

Large Account Underwriting Program > $10 Million Bonded Liability

• Critical Marketing Factors– Know Your Target Accounts– Identify the Decision Maker– Take the Chance

• Know the Industry• Know Your Surety Markets• Assess Your Internal Technology

LARGE ACCOUNT UNDERWRITING

Large Account Underwriting Program Underwriting Considerations

• Financial Information

• Indemnity

• Collateral Requirements

COMMERCIAL SURETY MARKETING STRATEGIES

• Question and Answer Session

Thank You For Your Participation!

Contact Info:Paul Amstutz – [email protected]

Steve Swartz - [email protected]

National Association of Surety Bond Producers

Commercial Surety Marketing Strategies That Produce Results Steven Swartz Paul Amstutz.

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Transcript of Commercial Surety Marketing Strategies That Produce Results Steven Swartz Paul Amstutz.