Interview With a Contract Bond Underwriter – Meet Brad Koosmann

Brad_9010eMeet Goldleaf Account Specialist Brad Koosmann. Brad grew up in Madison, Minnesota which is only about 30 miles from Montevideo where he now lives with his wife and 3 children. He enjoys vacations at the cabin, both playing and watching sports, and spending time with his family. Brad also enjoys fishing and hunting. One of his favorite fishing memories is the time he caught a 10 pound, 31 inch walleye while ice fishing for crappies through a 7 inch hole in the ice!

Can Surety Be Quoted Like Insurance?

The short answer is sometimes, under the right circumstance, it can be competitively quoted. And, if an agent has an account for which they are quoting insurance and the account wants your agency to handle their surety as part of the package, Goldleaf certainly can help you.

Now, the longer answer… A surety bond is a credit instrument, so first, the contractor must qualify for credit. If they do not qualify, then a quote cannot be provided.

Most surety pricing is determined by rate filings that the surety companies make, by law, in each state. So, there is some, but not a lot, of competitive pricing in surety. Sureties can deviate from their filed rates for specified reasons, and certain surety companies have special rates that allow them to handle non-standard accounts. But, you will not see the same kind of price movement and price aggression in surety as you see in insurance.

In our experience, it is rare that an account will switch surety providers merely based on price. Surety is a complicated product, and few purchasers of surety are willing to mess up their surety relationship over price alone. Generally we encounter two scenarios in which an account is motivated to move surety providers:

  • The current provider cannot deliver the surety capacity their company needs – they cannot get enough bonded single and/or aggregate capacity;
  • They have encountered a problem in their financial position that their current surety provider does not understand or cannot tolerate any longer.

Again, it is important to remember that surety bonds are credit instruments, and the underwriting information needed for them usually requires detailed and confidential company and personal information for a surety to be able to quote a new program.