Surety

The surety market had a challenging year, with rates generally flat. 

The UK experienced several high-profile contractor insolvencies, and there were losses among small and medium contractors in Asia and Europe. This has led to tighter underwriting criteria and reduced capacity in some instances.  

Underwriting criteria remained conservative in the Pacific, with some sureties reverting to terms and conditions, which put it at a disadvantage to bank guarantees. 

Surety is a new product in India, with strong demand. However, reinsurers have yet to initiate broad support. In the Middle East, surety has little penetration, but the increase in infrastructure and construction projects in the Middle East is leading banks to look at sureties to distribute their guarantee exposures. 

Surety is widely used in Africa, but the lack of global sureties creates a capacity challenge. Additionally, the unfavourable rating of local/regional insurers limits their participation in large international projects happening in the continent.