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Home > Goldleaf Surety Blog > What is My Underwriter Talking About When She Refers to the “Four C’s”?

What is My Underwriter Talking About When She Refers to the “Four C’s”?

June 5, 2013by Lori Olson

Goldleaf Surety Calculator.4 C'sThe first C refers to Capital.  The surety underwriter analyzes the company’s financial position as represented by its financial statements.  A company’s financial statements show its current state, including its working capital, its debt to equity ratio, and how profitable it is.

The second C is Capacity.  The surety underwriter needs to be comfortable in a company’s ability to perform the bonded project.  For this C, the surety company will look at non-financial information such as resumes of key employees, current work on hand, project history and project references, and continuity plans.

The third C is Credit.  The surety underwriter will review the personal credit reports of the company’s owners and spouses, as well as a company’s credit report, to determine how a company handles its financial obligations.  Credit will provide the surety an understanding of a company’s, as well as its owners’, willingness to meet its financial obligations.

The fourth C is Character.  Although the most difficult for a surety underwriter to evaluate, it is probably the most important.  Underwriters like to meet with their clients in order to help them evaluate this C.  A company’s reputation and the references of its clients and suppliers are key items as well in helping a surety underwriter evaluate Character.

Filed Under: Goldleaf Surety Blog Tagged With: four c's, surety, underwriter

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