commercial surety marketing strategies that produce results steven swartz paul amstutz
TRANSCRIPT
Commercial Surety
Marketing Strategies That Produce Results
Steven SwartzPaul Amstutz
NASBPCommercial Surety Online Reference Guide
• www.nasbp.org
• Free Access to Members
• Basic Introduction to Commercial Surety
• Provides Comprehensive Overview– Explanation of Obligation– Review of Underwriting Considerations– Termination Information
GO WHERE THE MONEY IS!
Commercial Surety Premiums/Loss Ratios(Estimated)
8 Years 1993-2000 Premium 6.0 Billion
Loss Ratio Less than 20% 3 Years 2001-2003 Premium 3.0 Billion
Loss Ratio Over 50%
4 Years 2004-2007 Premium 4.4 BillionLoss Ratio Less than 20%
Commercial SuretyFive Classes of Bonds – Estimated Premium/Loss Ratios
15 Yr Premium 15 Yr L/RLicense and Permit 5.0 Billion Under 15%
Miscellaneous Indemnity 4.5 Billion Approx 50%
Court – Judicial 1.7 Billion Under 20%
Court – Fiduciary 1.3 Billion Under 25%
Federal & Public Official .9 Billion Under 10%
How Have Agencies IncreasedProfits With Commercial Surety?
• Accident vs Planned
• High Commissions vs Costs
• Management Commitment – A Product Priority – A Key Component of the Business Plan
Developing a Commercial Surety Business Plan
• Identify Potential Needs/Opportunities– Isolate Current Production – Data Mine Agency Clientele– Brainstorm With Key Surety Personnel– Determine Access to Fortune 1000– Information Systems Capability
• Identify the “Best Fit” Surety Markets• Develop/Hire the Expertise
Commercial SuretyKnow the Marketplace
• Transactional Accounts
• Program Business
• Small and Mid-Size Accounts
• Large Regional/National Accounts
Commercial SuretyKnow the Marketplace
• Transactional Accounts
– Individuals/Businesses • One or two bonds a year
Transactional BusinessIdentify the Opportunities
• Never Pass One Up• Individuals
– Fiduciary Bonds– Judicial Bonds– Public Official Bonds
• Businesses– License & Permit Bonds– Judicial Bonds– Miscellaneous Bonds– Federal Bonds
Program Business
• Specialization– License & Permit Bonds– Miscellaneous Bonds– Federal Bonds
• Technology
• Marketing
• Pricing
Commercial SuretyKnow the Marketplace
• Small and Mid-Size Accounts– One Principal with Multiple Bond Needs
– Aggregate Program Under $10 Million
Commercial SuretyKnow the Marketplace
• Large Regional/National Accounts– One Principal with Significant Bond Needs– Aggregate Program in Excess of $10 Million– Publicly Held– The Fortune 1000
Increase Profits With Commercial SuretyIdentify/Measure Costs
• Marketing/Sales – Salaries/Benefits– Space Needs
• Processing– Salaries/Benefits – Space Needs
• Systems– Internal vs External– Paperless Environment
• Advertising– Bonds via the Internet
Developing a Commercial Surety Business Plan
• Prepare Cost/Benefit Analysis– Recommendation
• Prepare Marketing Plan– For Moderate Increase
• May Require No New Personnel or Systems
– For Large Program• Develop/Hire the Expertise
Small Account UnderwritingProgram < $10 Million Bonded Liability
• Industry Analysis– Short and Long Term Outlook
• Financial Analysis– CPA Prepared Financial Statements– Personal Credit Reports and D&B– Bank Line of Credit
• Obligation– Regulation– Bond Form
• Indemnity– General Indemnity Agreement
Large Account Underwriting Program > $10 Million Bonded Liability
• Critical Marketing Factors– Know Your Target Accounts– Identify the Decision Maker– Take the Chance
• Know the Industry• Know Your Surety Markets• Assess Your Internal Technology
LARGE ACCOUNT UNDERWRITING
Large Account Underwriting Program Underwriting Considerations
• Financial Information
• Indemnity
• Collateral Requirements
COMMERCIAL SURETY MARKETING STRATEGIES
• Question and Answer Session
Thank You For Your Participation!
Contact Info:Paul Amstutz – [email protected]
Steve Swartz - [email protected]
National Association of Surety Bond Producers