Surety Market

Surety Market Research, 2031

The global surety market was valued at $16 billion in 2021, and is projected to reach $24.4 billion by 2031, growing at a CAGR of 4.4% from 2022 to 2031. Surety refers to the guarantee that a person or party or company will pay off the loans of another party. They take responsibility in case the other fails to abide by the conditions of a bond. Surety bonds protect against false claims and serve as clear representation when claims occur.

The COVID-19 outbreak has brought numerous uncertainties leading to severe financial losses as various businesses worldwide were standstill. The revenues and cash flows of many businesses significantly declined all across the world due to the pandemic. This, in turn, negatively hampered the market growth of the surety market. Sales of surety are highly dependent on the various end-user industries.

Surety bonds can lower interest rates for borrowers because they reduce risk for lenders. This factor drives the surety market growth. The surety market has traditionally been a local business based on local market knowledge. With increased globalization; however, large surety market players are establishing operations in developing markets. Global corporations, on the other hand, can compete in the market by hiring professional local underwriters. The adoption of surety markets in North American countries has been rapidly increasing over the years, and this trend is expected to continue. Rapidly developing countries are emphasizing urban development and, as a result, are investing heavily in the construction sector. This is driving up demand for surety bonds, which is propelling the surety market in the countries over the years.

The risk of a contracting party defaulting is shifted to a third party through the surety market. This is because if the contract that the surety guarantees is broken, the third party will be responsible for paying the obligation. According to the Insurance Regulatory and Development Authority of India (IRDAI), the maximum amount of the guarantee under contracts for surety insurance shall not be greater than 30% of the project's value.

Surety market outlook is positive as it is a means for companies to grow sustainably, which encourages small business owners to use surety insurance to secure funding and do business safely. Consequently, surety market opportunity are significantly increasing due to the rise in small and medium-sized enterprises looking to enter the global market. 

The key players profiled in this report include Crum & Forster, CNA Financial Corporation, American Financial Group, Inc., The Travelers Indemnity Company, Liberty Mutual Insurance Company, The Hartford, HCC Insurance Holdings Inc., Chubb, AmTrust Financial Services, and IFIC Security Group.

The surety market forecast report is segmented on the basis of bond type, end-user, and region. By bond type, the market is divided into contract surety bond, commercial surety bond, fidelity surety bond, and court surety bond. By end-user, the market is classified into individuals and enterprises. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The surety market is segmented into Bond Type and End-User.

By bond type, the contract surety bond sub-segment dominated the market in 2021. A contract surety bond guarantees the company owner will conform to the terms of the agreement and complete the tasks outlined in the contract. Also, the bond protects against inconveniences or monetary loss brought on by a contractor's inability to finish a project or conform to project requirements. These are predicted to be the major factors affecting the surety market size during the forecast period.

By end-user, the enterprises sub-segment dominated the global surety market share in 2021. The growth of the sub-segment is expected to be attributed to the use of surety for agreement which involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Claiming their bonds will protect consumers from losing money to dishonest enterprises. The outbreak of COVID-19 has led the construction industry players to temporarily call off their current projects. Due to the unpredictable impact of COVID-19 and uncertainty in the economic conditions of both developed and developing countries, the demand for surety insurance among enterprises has increased in the market.

By region, North America dominated the global market in 2021 and is projected to remain the fastest growing region during the forecast period. North American industrialization has been steadily increasing over the years. Year after year, the number of small businesses in the United States and Canada increases. The countries' strong economies and government support enable several start-ups to establish themselves. Surety bonds make it easier for small businesses to get contracts by assuring the customer that the specified work will be completed on time. Surety bonds, which are provided by surety companies, are required for a number of public and private contracts. The ever-increasing number of small businesses in the North American construction industry, combined with the availability of a large number of surety market participants in the United States and Canada, is expected to drive the surety market.

Impact of COVID-19 on the Global Surety Market Industry

• The COVID-19 pandemic negatively impacted various industries across the globe. The market for surety has witnessed a drastic decline in contract surety bond sales. As surety is widely used in contract surety bond, there was significant reduction in the surety demand globally.
• Sales of surety are directly proportional to the demand from end-user namely individuals and enterprises. However, the demand for surety in enterprises was greatly affected owing to the restrictions, closed borders, and supply chain disruptions due to the outbreak of the COVID-19 pandemic.

• Economic slowdown has affected the setup of new surety projects across the world as majority of government funding’s were diverted towards the healthcare sector owing to rapid spread of the COVID-19 virus, impacting the market to the great extent

Key Benefits For Stakeholders

• This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the surety market analysis from 2021 to 2031 to identify the prevailing surety market opportunities.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the surety market segmentation assists to determine the prevailing market opportunities.
• Major countries in each region are mapped according to their revenue contribution to the global market.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes the analysis of the regional as well as global surety market trends, key players, market segments, application areas, and market growth strategies.

 Surety Market Report Highlights