Most college students haven’t heard of a surety bond or the surety industry, and they don’t realize surety provides exciting opportunities beyond a typical career in finance or insurance.
A surety bond professional has the opportunity to learn about an array of industries—construction, international trade, health care and financial services—making each day different from the next.
In construction, most public jobs require a contractor to be bonded, and private sector contracts increasingly have bond requirements. The need to protect the taxpayer and the investor/shareholder has led to a growing dependence on surety bonds as the most appropriate method to assure these projects are built on time and on budget, and that suppliers and workers are paid.
With this growth, sureties have en-countered an increased need to recruit, train and retain a highly professional cadre of personnel to carry out the various functions associated with prequalifying contractors, underwriting bonds and evaluating claims. In addition, the surety industry is not clustered in one part of the country; opportunities abound throughout the United States.
Successful surety underwriting requires a surety professional to have an intimate and in-depth knowledge of the principal: the construction firm. A surety professional in the construction market has the opportunity to become engaged in a firm’s operations and finances, as well as the legal aspects of suretyship.
Types of Jobs
A surety bond is a form of insurance by which a third party (the surety) secures the fulfillment of an obligation owed by one party (the principal) to another (the obligee). The types of underlying obligations are practically limitless and vary from a construction contract (a performance bond) to a regulatory requirement to pay duties on imported goods (a customs bond), and hundreds of things in between.
The following are the most common positions available in the surety industry:
- surety agent/producer/broker;
- account manager;
- account executive;
- client adviser;
- surety underwriter;
- claims representative;
- claims analyst; and
- claims attorney.
Surety professionals are involved throughout the bonding process. When a contractor needs a bond, it reaches out to a qualified insurance agent with expertise in surety bonding. The surety agent generally represents several surety companies. He conducts an initial investigation of the contractor and compiles the information necessary to apply to the surety company for a bond. The agent selects the surety that best matches the contractor’s needs and risk profile.
The information (financial statements, corporate résumés, project history information and references) is submitted to the surety bond underwriter, an employee of the surety company, who evaluates the contractor relative to the specific bond request. Ultimately, the underwriter must evaluate the contractor’s ability to complete the project to be bonded. The underwriter’s analytical and decision-making skills must be sharp, as the underwriter decides whether the surety will undertake the risk by writing the bond.
Finally, if the surety writes the bond and a claim stems from a contractor default, surety claims professionals help assess the claim. Claims professionals do not have to be lawyers, but they must be knowledgeable about legal concepts regarding surety, contract and insurance law.
Future Prospects
Despite the current economic crisis, the prospects for future employment opportunities in surety remain favorable. Surety agencies continue to seek experienced and aggressive bond producers to identify and secure contractors’ business. Surety companies are recruiting underwriter trainees, as well as claims and administrative staff, to meet anticipated reductions in personnel due to retirements and increased business volume.
The recent construction downturn has been felt most critically in the residential market, where traditionally bonding is not required. The market for public sector construction, in which bonding is almost always required, increased slightly from $287 billion in 2007 to $308 billion in 2008, according to the U.S. Department of Commerce. And now that the economic stimulus package has passed, public sector construction should increase even more in 2009. Producers and surety companies will need personnel to meet the anticipated demand for surety bonding expected during the next several years.
Industry-Wide Diversity Efforts
An important aspect of maximizing career opportunities in the surety and fidelity industry is ensuring diversity in the workplace through recruitment programs. On an industry-wide basis, The Surety & Fidelity Association of America (SFAA) and its leaders are working to increase the number of minority and female surety professionals in the industry. The organization developed and implemented two programs—the SFAA/INROADS Summer Intern Program and the Surety Industry Scholarship Program—aimed at identifying and supporting outstanding minority students for careers in surety underwriting and related fields.
In 2001, the SFAA entered a memorandum of understanding with INROADS, Inc., a renowned national intern program that develops and places talented minority youth in business and industry and prepares them for corporate and community leadership. In the summer of 2002, 11 interns were placed with SFAA member companies around the country.
Since then, SFAA member companies have sponsored more than 60 intern positions, with INROADS working to exceed this goal. Several interns now work either for their sponsoring companies or anticipate being offered full-time positions once they graduate.
Established in 2003, the Surety Industry Scholarship Program provides awards of up to $2,500 to support outstanding minority students’ studies in insurance, risk management, accounting, business or finance, and encourages their consideration of surety underwriting as a career choice. This program is administered by The Surety Foundation, the educational arm of SFAA.
For more information on the SFAA/INROADS Summer Intern Program or the Surety Industry Scholarship Program, visit www.surety.org or email info@ surety.org.
Anyone seeking new opportunities in the surety industry may access the National Association of Surety Bond Producers’ (NASBP) Career Center at www.nasbp.org/careers. The NASBP Career Center is the surety industry’s online job posting service that offers surety companies and professionals a unique, easy-to-use and highly targeted resource for employment connections.
“The NASBP Career Center is the only online center that I know of that is specifically geared to employers and job candidates for surety industry positions,” says NASBP President Todd Loehnert. “It’s a terrific resource for anyone looking to fill or to find a position with an agency or surety company."
The NASBP Career Center appeals to job seekers looking for employment as producers, underwriters and claims representatives, or in other surety-related positions. Registering requires no fee, but users must create an online account.
Job seekers also must create an online résumé by uploading information from a program such as Microsoft Word. Work samples, cover letters or certification letters (to increase exposure in an employer’s search) also can be posted online as a portfolio of career-related documents.
Job seekers can preview everything they plan to submit to an employer before submitting an application. Once a résumé and supporting documents are posted, job seekers can browse and view jobs as well as set up a search agent to provide email notifications of jobs that match their criteria.
All job seekers have the option to post their résumés publicly (full résumé) or confidentially (identity and contact information withheld) at no charge. If they choose to post confidentially, an employer can only contact the applicant using a “blind” email.
Employer access requires purchasing a minimum 30-day package for $200. (NASBP members/affiliates receive a discount on package rates.) Once a package is purchased, the employer can access the entire database of résumés posted online. Searchable résumés are posted under categories familiar to the industry (e.g., producer, underwriter, customer service).
Employers can set the criteria for their firm’s ideal job candidate, and the center will email them matching résumés. They also can run reports showing the effectiveness of job postings.
For more information, call (888) 491-8833, prompt 1670, or visit www.nasbp.org/careers.
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Friday, September 3, 2010