December 17, 2007 by Michael Weisbrot
As an agency, we focus the majority of our marketing efforts on the Internet. The web has been a great source of new business for our agency, but not for all lines of business. For instance, construction performance bonds are the #1 premium generator for our industry and yet we saw minimal increases even though we are the top ranking agency in all major search engines for the term. Commercial surety bond volume boomed from the Internet, but relatively few seemed to be searching for performance bonding to guarantee construction via the web. There are a couple of reasons why…
Geographical location - Sureties often are not interested in backing a principal that is too far away from the agent.
More complex underwriting - A contract bond line is much more involved to set up than a simple commercial bond.
People are set in their ways – Most are accustomed to getting their performance bonds from the same agency that does their insurance
Fortunately for all, the times are changing. In 2007 we saw our first year of significant growth for performance bonding from clients finding us online. Why the changes? The world moves at a faster pace now and many sureties want to keep up! Geographical locations are still important, but some forward thinking sureties allow agents to write business anywhere they are licensed. Credit-only based contract programs are expanding their capacity allowing for easier contract underwriting, in some cases more simplistic than commercial bonding. Lastly, many contractors are finding that their old insurance agent simply does not have the markets or experience necessary in the specialized field of suretyship. This forces the contractors to search for an agency that is a better match for them, which often leads them online.
It is clear that the growth of the world-wide-web is not going to stop any time soon. Therefore, it is only natural to assume that the world of online performance bonding only has room to grow!
