Contract surety could be a good business to get into in the next few years.
A Canadian construction boom is needed to address the infrastructure deficit across the country – and that means an increased demand for contract surety bonds. One player on top of the trend is Trisura Guarantee Insurance Company, which focuses on small to mid-market surety business.
“The next few years are going to be very interesting. It’s common knowledge that there’s quite a large infrastructure deficit in Canada and a lot of infrastructure renewal and new-build that needs to be done,” said Chris Sekine, senior vice president, Surety, Trisura Guarantee. “We anticipate that the government will up its spending on infrastructure work and construction projects, which is good news from a surety business standpoint.
“Lots of the new projects will be large but there will also be work for regional contractors and subcontractors. At Trisura Guarantee, we hope the work comes into fruition as anticipated and we want to ensure that our contractor clients and our broker partners can provide the surety support their customers need in order to take advantage of that work.”
Trisura Guarantee recently made a “strategic deal” with RSA Canada, where it agreed to take on RSA’s Canadian surety portfolio of about 450 contract and commercial surety accounts with annual premium in excess of $6 million.
This is the company’s latest move in a quest to expand its surety business and enhance its service offerings in the small to mid-size contractor space. Trisura Guarantee expects to finish 2017 with an overall revenue for surety exceeding $50 million, according to Sekine.
Achieving “market-leading” status and building business is not just about effective market consolidation; it also comes down to top quality services and innovation, said Sekine.
“We’ve been extremely innovative in the electronics side of our business,” he told Insurance Business. “We’re the first surety company to deliver an e-bonding platform, which is an electronic delivery platform for surety bonds. This is important because a lot of public construction work is moving towards electronic procurement.
“These days, a lot of contractors have to submit electronic documents to procure work, which means the surety bonds also need to be submitted electronically. To date, this has only been possible through third-party providers, but Trisura Guarantee has now rolled out its own electronic bond platform.”
The transition of RSA Canada’s contract and commercial surety business over to Trisura Guarantee should be complete by the end of the year.