Sompo International Featured in Insurance Day Article about Growth and Consolidation in the U.S. Surety Market
In a recent article published in Insurance Day, Brain Beggs, Sompo International’s EVP Surety, joins other industry experts to discuss growth, profitability trends, and consolidation in the US Surety market.
Commenting on growth in the Surety sector's main underlying market – the construction of infrastructure owned by government entities, Mr. Beggs said, "Residential and commercial construction, which rely primarily on private investments, is thriving, but public spending, which is typically focused on infrastructure, has been relatively flat." The article suggests that with an inflow of looming infrastructure investments, most notably President Donald Trump's plan to inject $1.5trn into infrastructure spending on the construction industry, there could be potentially positive impacts on both the construction industry, and, as a consequence, to providers of surety bonds.
Mr. Beggs believes consolidation and acquisitions within the sector are not over. "After the top five surety insurers in the US, there are a number of companies that hold between 1% and 3% of market share," he said. "In segments such as commercial surety, pricing, terms and conditions are extremely competitive and we do not see that changing in the near term." Of Sompo International's agreement to acquire Lexon Surety Group, he added, "Lexon's scale is very attractive to us. They are also highly regarded with many experienced underwriters, and a broad range of surety product capabilities."
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