Growing Need for Innovative Insurance Solutions Globally to Propel the Growth of the Global Surety Market by 2031

Surety is an important component of the insurance industry, providing guarantees and bonds that help protect businesses and individuals from financial losses. Surety bonds are a type of contract between three parties: the principal, the obligee, and the surety. There are various types of surety bonds including contractor bonds, performance bonds, payment bonds, and license and permit bonds. Surety companies play an important role in the surety market, providing guarantees and bonds that are necessary to protect businesses and individuals from financial losses. Surety companies evaluate the creditworthiness of the principal and determine the risk of issuing a bond. They also provide advice and guidance to principals on how to minimize risk and fulfill their obligations under the bond.

Forecast Analysis of the Global Surety Market

According to the report published by Research Dive, the global surety market is anticipated to generate a revenue of $24,371.2 million and grow at a CAGR of 4.4% over the analysis timeframe from 2022 to 2031.

The rising need for innovative insurance solutions to attract investment primarily in the transportation and energy sectors which include roads, bridges, power grids, and railway ports is expected to fortify the growth of the surety market during the analysis timeframe. Moreover, the increasing popularity of surety insurance among small and medium-sized enterprises (SMEs) to use it as a secure means of obtaining funding is predicted to create wide growth opportunities for the market over the estimated period. However, the increased risk of a contracting party defaulting may restrict the growth of the market throughout the forecast period.

The major players of the surety market include IFIC Security Group, Crum & Forster, AmTrust Financial Services, CNA Financial Corporation, Chubb, American Financial Group, Inc., HCC Insurance Holdings Inc., The Travelers Indemnity Company, The Hartford, Liberty Mutual Insurance Company, and many more.

Key Surety Market Developments

The key companies operating in the industry are adopting various growth strategies & business tactics such as partnerships, collaborations, mergers & acquisitions, and launches to maintain a robust position in the overall market, which is subsequently helping the global surety market to grow exponentially. For instance:

• In August 2021, the Institutes RiskStream Collaborative®, the largest blockchain-based insurtech consortium launched a new lab for the Surety industry by advancing international efforts on the Surety Bonds Power of Attorney use case.
   
• In February 2022, Swiss Re Corporate Solutions, a leading provider of reinsurance services entered into a strategic agreement with The Hartford, a United States-based investment and insurance company. With this agreement, Hartford aimed to extend its service commitment to its international customers by making advancements in the insurance industry towards a simplified and open market standard.
   
• In July 2022, Risk Strategies, a renowned national specialty insurance brokerage, and risk management firm announced its acquisition of Bonds, Inc., an expert in surety bonds across the construction industry. With this acquisition, Risk Strategies aimed to strengthen its Surety Practice bonding operations by providing bonds for various government and municipal projects in the Baltimore and DC metro area.

Most Profitable Region

The North America region of the surety market is expected to hold the largest share of the market over the analysis timeframe. This is mainly due to the rising need for products and services, brisk business transactions, and safe transactions across the region. Additionally, various multinational firms are working with regulatory bodies to conduct business overseas which is expected to enhance the regional growth of the market during the estimated period.  

Covid-19 Impact on the Surety Market

The rise of the novel coronavirus has devastated various industries and caused severe economic losses. It has also had a negative impact on the surety market. The outbreak has forced the participants in the building business to temporarily suspend their projects. This has decreased the demand for surety during the pandemic period. Moreover, many insurers have raised premiums to maintain the profitability of their company owing to the rising number of claims over the pandemic period. All these factors have decreased the growth of the market throughout the crisis.