Commercial Surety Marketing Strategies That Produce Results Steven Swartz Paul Amstutz

NASBP Commercial Surety Online Reference Guide 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 Premium 6.0 Billion Loss Ratio Less than 20% 3 Years Premium 3.0 Billion Loss Ratio Over 50% 4 Years Premium 4.4 Billion Loss Ratio Less than 20%

Commercial Surety Five Classes of Bonds – Estimated Premium/Loss Ratios 15 Yr Premium 15 Yr L/R License 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 Increased Profits 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 Surety Know the Marketplace Transactional Accounts Program Business Small and Mid-Size Accounts Large Regional/National Accounts

Commercial Surety Know the Marketplace Transactional Accounts –Individuals/Businesses One or two bonds a year

Transactional Business Identify 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 Surety Know the Marketplace Small and Mid-Size Accounts –One Principal with Multiple Bond Needs –Aggregate Program Under $10 Million

Commercial Surety Know 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 Surety Identify/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 Underwriting Program < $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 – Steve Swartz - National Association of Surety Bond Producers