4/2/2020

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COVID-19 and Surety Considerations

CSDZ Construction Practice

Virtual Townhall Series

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CSDZ Townhall Moderators

Joshua R. Loftis

Sr. Vice President, Surety

Bob Bowman

Surety Underwriting Manager

Colby White

Surety Operations Manager

Brian Oestreich

VP, Client Executive

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Participating in the Virtual Townhall

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This is a Human Problem

Organizational Wellbeing

Finding Alignment

Seeking Answers Together

Welcome & Opening Thoughts

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Contracts & Supply Chain

• Force Majeure

• Substitutions

Financial

• Overhead

• Liquidity / Borrowing resources

COVID-19 Specific Inquiries

• Impacts and action plans

• Upstream and downstream risk

COVID-19 Surety Discussions

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Portfolio Management

Reinsurance Dynamics

Understand How You are Evaluated –

Credit Scoring & Evaluation

Corporate Capital Allocation –Surety and Other Lines of Insurance

Surety Behind the Scenes

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What’s Our Strategic Plan Now?

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What’s Our Strategic Plan Now?

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We can improve visibility of change with

increased measurement and communication

We can control our preparation with Scenario

Planning that models:

• Backlog Delay Sensitivity

• Overhead Decisions

• Cashflows

We can proactively prepare for liquidity

shortfalls – talk to your Bank about adequacy

of current program and the CARES Act

What Can We Control?

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Lean into your Work-In-Process for Financial Modeling

• Accuracy and Frequency of Backlog Metrics from the Field

• Predictability of Project Delay or Shutdown

• Timeliness of Monthly Financial Reporting

Consider how you measure Revenue Acquisition

• Define the horizon for overhead decisions and outlook for 2021

Can you Shift Fixed Costs to Variable Expenses

• Start with Allocation Related Costs

• Example: Owned vs Rented Equipment

• Example: Variable Compensation for Business Development

Strategic Planning Considerations

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We Are Building Tools To Help

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Focus on the problems you can solve

Cut the fat first

Economic Uncertainty

"A bad economy does not

cause businesses to go

broke, but it does expose the

weak ones." ~ Warren Buffett

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Coming into 2020

Balance sheets and backlogs are

strong

Early project starts

Ample project opportunities

Acquisition opportunities

Economic Uncertainty –

Creates Opportunity

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Incredibly low interest rates

CARES Act

Fresh Pool of new Potential Hires

Stick to your process

Refine Company Culture / Purpose

Economic Uncertainty –

Creates Opportunity

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Sandra Engstrum Sarah Dragt

Lin Ulven

Rachel Thomas

Tina Domask

Mel Bloddget

Emily White

Nicole Stillings

Colby WhiteNate Weaver

Nick EtzelKurt Lundblad

Josh Loftis

Brian Oestreich

Bob Bowman Ted Jorgensen

CSDZ Surety Team

Roger Frank

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Virtual Townhall Series

4/2/2020

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Risk Rewarded.

You Can Find Additional Information

on our website (www.csdz.com)

We have created a COVID-19 resource tab

Thank you