JW Surety Bonds

Hard Times In Surety

The surety bond market is currently a very conservative market. Contract and commercial bond departments throughout the nation have tightened up their underwriting practices due to enormous loses throughout the industry. Many sureties have had to close their doors, other have had their ratings drop to a level where they can not write the same business they could in years past. Obviously this leaves the bonding companies that are still operating with a very conservative outlook when it comes to their underwriting guidelines.

One thing that many do not understand is while the current surety bond market is tough, it is considered a more traditional underwriting approach. Contractors are being angered by decreases in their bond lines, or in worst cases are now being deemed “not bondable”. Business owners seeking commercial bonding such as license bonds to run their business are not only finding it harder to obtain an approval, but are also seeing rates much higher than years past.

Why such a drastic difference? A couple years back the industry saw the softest bond market ever, which caused a backlash to what is now today’s hard market. The surety bond market is cyclical, a member of the Surety Bond Forums commented on the cycle stating:

    Vicious cycle:
  • We need more profit from you – write more business
  • We need to write more business, loosen up underwriting
  • We’ve loosened up underwriting – oops- losses
  • Losses? Sorry, you aren’t contributing to the bottom line – watch it
  • Tighten up underwriting – less premium – but losses still come in from previous underwriting
  • Losses increase – loss ratio increases due to smaller premium and more losses
  • Sorry – we are closing down surety operation and sticking to profitable lines
  • While at another company – lots of business out there due to company a getting out of business – go pick it up we need more business so we can get more profit and on and on and on

    What is a 6 letter word for “doesn’t learn from the past”

    S _ R _ T Y

The good news for anyone looking to obtain a bond is that the market will become more liberal in time. The bad news for agents is this will not be the last time that accounts scramble in mass looking for a new agent that can offer them what you previously were. Fortunately for agents, in general they will find very similar offers from agent to agent, as our industry is smaller than most realize.

The Fastest Surety Bond Approvals

I was browsing the web the other day seeing what others in the surety bond industry are currently doing. I saw several agencies claim “The Fastest Approvals”, “The Quickest Turnaround Time”, etc. Unfortunately, many advertised statements just simply are not true, but you didn’t need me to tell you that! The agencies required that their applications be faxed in for approval. From this requirement alone, I knew that they were not “the fastest”, I’ll explain more in a bit. Other agencies allow you to apply online, however the way they have it set up it only cuts out the use of the fax machine and does not speed up the process what so ever.

After seeing web site after web site I realized that our agencies unique service truly is “The Fastest”. Our online applications give you a written approval and your premium rate immediately upon submitting your application! I always knew that our web site offered an abundance of services, but I never realized how far ahead our agency is compared to others that are supposively “fast” and technology oriented.

There are a couple reasons why JW Bond Consultants, Inc. can offer instantly approved applications and the others can’t.

  • The volume of business that we write allows us to have exclusive programs set up with our bonding companies, which allow us to approve the bonds in house.

  • We are constantly researching the best ways to produce bonds in the most efficient manner, with a large emphasis on technology. Saving our clients time also saves us time allowing for the most efficient operation possible. Efficiency is mutually beneficial to us and our clients.
  • Many agencies will broker out business to help expand the amount of programs they can offer. Fortunately, we have 16 different sureties at our disposal and have the authority to write the bonds in house and sign on behalf of the bonding company. This not only cuts out lost time due to sending overnight packages from agent to agent, but it also prevents multiple agents putting additional fees on the cost.

How Most Agencies Operate:
Most bond programs require you to complete an appointed agencies applications. The agent must then review the application and send it to the appropriate bonding company. The bonding company’s underwriters must then review the file and then issue an approval (if additional information is not requested first; such as cash verification). The agent must then prepare personal and corporate indemnity agreements between the principal’s company and the bonding company. Once the agent has received the original copies of the signed indemnity agreements they can issue the bond. If the agency does not write the bond in house and sign on behalf of the bonding company then you will lose more time when they have to over night the bond to the individual that has authority to sign on behalf of the surety.

Instantly Approved Bond Applications:
I am sure you are tired of all the bragging I am doing about our agency, but we truly are proud of what we have to offer. So let me cut the chase, here are the bond types we currently have to offer online approval for:

Not All Bonds Can Be Approved immediately:
Now I don’t want to give you false impressions about what our agency can and can not do. While it is true we do have some bond classes that can be approved online, we also offer bond types that require more than a simple online application such as: contract bonds, commercial bonds over $100K, court bonds.

You can apply for any of our bond classes in our Application Section. Should you have any questions, click the “Live Help” button (found on all pages of the site) to chat with an agent one on one online.