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Surety Market Research Report By Exposure Type (Contract Surety, Commercial Surety, Fidelity Surety, Judicial Surety, Other Surety), By Construction Industry (Commercial Construction, Residential Construction, Heavy Construction, Infrastructure Construction, Other Construction), By Surety Underwriting Criteria (Financial Strength of the Principal, Experience and Track Record of the Principal, Value of the Project or Contract, Terms and Conditions of the Contract, Other Risk Factors), By Contract Type (Performance Bonds, Payment Bonds, Bid B


ID: MRFR/BFSI/21266-HCR | 128 Pages | Author: Aarti Dhapte| December 2024

Global Surety Market Overview:


Surety Market Size was estimated at 17.3 (USD Billion) in 2022. The Surety Market Industry is expected to grow from 18.02(USD Billion) in 2023 to 23.6(USD Billion) by 2032. The Surety Market CAGR (growth rate) is expected to be around 3.4% during the forecast period (2024 - 2032).


Key Surety Market Trends Highlighted


The surety market is influenced by several key trends, including increased demand for infrastructure projects, globalization of businesses, and technological advancements. These factors drive the need for sureties to guarantee the completion of projects and ensure financial obligations.


Opportunities in the surety market lie in expanding into emerging markets, developing innovative products and services, and leveraging technology to streamline processes. As businesses seek global expansion and large-scale projects are undertaken, the demand for sureties will continue to rise.


Recent trends in the surety market include a shift towards digital platforms, which enhance efficiency and transparency. Additionally, the integration of artificial intelligence and data analytics is improving risk assessment and underwriting processes. These technological advancements are expected to drive growth in the surety market in the coming years.


Surety Market


Source: Primary Research, Secondary Research, MRFR Database and Analyst Review


Surety Market Drivers


Increasing Demand for Infrastructure Development


One of the foremost reasons why the global market of surety is probable to grow considerably is the booming demand for infrastructure. Nowadays, various types of infrastructure have been built in large numbers by governments and private companies across the world. Roads, bridges, airports, power plants, and other facilities are in great demand. All this leads to increased investments in this sphere. However, this increased investment results in the necessity to guarantee the operations of contractors tasked with establishing infrastructure. For this reason, globe surety should be in great demand as they are crucial for ensuring that investments are safely used.


Growing Construction Sector


The increase in the construction sector is one of the factors that drive the Surety Market. The rise in the number of constructions is estimated for the upcoming years since their development is affected by the increasing level of urbanization and population growth. Thus, the larger construction sector would cause a higher demand for construction surety bonds, which are utilized in the construction sector to guarantee the contractors’ performance and secure project owners from financial losses.


Increasing Adoption of Green Building Practices


Another factor that is expected to drive the growth of the Surety Market is the rising adoption of green building practices. Green building practices are being adopted more frequently as companies and governments look to reduce their environmental impact. Green building projects require specialized contractors and materials which have the potential to increase the costs of construction. However, surety bonds can be used to help mitigate the increased cost and risk and protect the investment for the owners of the projects.The increased adoption of green building practices is expected to lead to higher demand for surety bonds.


Surety Market Segment Insights:


Surety Market Exposure Type Insights


The Surety Market is segmented by Exposure Type, as Contract Surety, Commercial Surety, Fidelity Surety, Judicial Surety, and Other Surety. It is expected during 2023 that Contract Surety will hold the largest market share in the Surety Market, covering just over 55% of revenue. The growth of this market segment is due to the increasing demand for construction projects, which is particularly high in developing economies, resulting in increased demand for surety bonds to mitigate the risk associated with project completion. Commercial Surety is another noticeable market segment in the Surety Market and is expected to grow at a rate of roughly 5.5% during the forecast period.The increasing demand for surety bonds as businesses require contracts to be guaranteed, to safeguard against financial damages in the event of non-completion. Fidelity Surety guards against financial loss emerging from worker extortion, as the demand for this product is likely to increase on a global scale. Given the high incidences of corporate fraud and embezzlement, the demand for these types of surety bonds is anticipated to rise, particularly in industries such as banking, finance, and retail. However, the growth rate for this market segment is likely to be lower than previously discussed. The Judicial Surety market segment is also expected to show a rather moderate growth rate during the forecast period. While the relatively large amount of legal disputes across the globe would suggest a higher growth rate, the final segment seems to indicate otherwise. Other Surety includes all other types of surety bonds not covered in the discussion above and is expected to hold the smallest market share. The remaining segment is forecast to have a steady growth pattern during the period in question, buoyed by the increasing need for specialized surety bonds.


  Surety Market Exposure Type Insights


Source: Primary Research, Secondary Research, MRFR Database and Analyst Review


Surety Market Construction Industry Insights


One of the major end-users of surety bonds is the construction industry. The Surety Market in the sector is expected to reach USD 785.6 billion by 2024. The demand for surety bonds in construction is fueled by the need to reduce the risks connected to the completion of the project. The developers should ensure that the project is implemented in the desired time, within the agreed budget, and according to the standards. The leading user of surety bonds is the commercial construction segment, which comprises more than 40% of the global market.The residential construction and infrastructure construction also should be mentioned as significant users with the growing attraction to them. Heavy construction and other construction. In such a way, the surety market in construction is growing with the development of all the mentioned segments.


Surety Market Surety Underwriting Criteria Insights


Surety underwriting criteria play a crucial role in the surety market by assessing the risk associated with issuing a surety bond. Key underwriting criteria include Financial Strength of the Principal: The financial stability and creditworthiness of the principal (the party seeking the bond) are evaluated to determine their ability to fulfill the terms of the contract. Experience and Track Record of the Principal: The principal's previous experience in executing similar projects or contracts, their reputation in the industry, and their track record of completing projects on time and within budget are considered.Value of the Project or Contract: The size and complexity of the project or contract being bonded are assessed to determine the potential risk involved for the surety. Terms and Conditions of the Contract: The terms and conditions of the contract, including the payment schedule, performance guarantees, and dispute resolution mechanisms, are analyzed to identify any potential risks or concerns. Other Risk Factors: Additional factors that may be considered include the nature of the industry, the location of the project, and any environmental or political risks that could impact the project's completion.


Surety Market Contract Type Insights


The Surety Market is segmented by Contract Type into Performance Bonds, Payment Bonds, Bid Bonds, and Other Contract Bonds. Among these, Performance Bonds accounted for the largest market share in 2023, and it is expected to continue its dominance throughout the forecast period. This growth is attributed to the increasing demand for performance bonds from government and private sector construction projects. Payment Bonds are also expected to witness significant growth due to the rising need for financial guarantees for timely payments to subcontractors and suppliers.


Bid Bonds, which are essential for contractors to participate in bidding processes, are projected to maintain a steady growth rate. Other Contract Bonds, including maintenance bonds, warranty bonds, and license and permit bonds, are expected to contribute significantly to the overall market growth.


Surety Market Regional Insights


The regional segmentation of the Surety Market provides insights into the market dynamics of different regions. North America is expected to hold the largest market share over the forecast period 2024-2032, owing to the presence of a robust construction industry and the high demand for surety bonds. Europe is also a significant market for surety bonds, driven by the growing infrastructure and real estate sectors. The APAC region is projected to witness the fastest growth in the surety market over the coming years due to the increasing construction activities and government initiatives in infrastructure development. South America and MEA are emerging markets for surety bonds, with potential for growth in the future.


Surety Market Regional Insights


Source: Primary Research, Secondary Research, MRFR Database and Analyst Review


Surety Market Key Players And Competitive Insights:


There are two main ways to grow within the Surety Market, and these include strategic partnerships and consolidation. The market looks quite fragmented at this point, and there is plenty of room for growth. Therefore, with the maturing of the Surety Market, M tendencies are likely to increase. Just as importantly, with the new demands on the Surety Market players emerging, they will need to pool their resources and combine the technologies that they have to offer in order to create a product that can be truly competitive.


Founded in the late 1880s, Hartford Financial began as a small insurance provider to the dairy industry. Today, the company is also known to provide surety bonds and relevant services, which means that it can be described as a company that has grown in the Surety Market and is one of the major players in it at present.


It would be an understatement to say that CNA Surety does not have such a long history in the surety market as Hartford Financial. Nonetheless, after the company’s opening in the late 1940s, CNA Surety has managed to gain a significant market share by providing a broader array of surety products and services to its clients and meeting the needs of the relevant target audiences with remarkable precision. It is also worth noting that the use of cutting-edge technology allowed the firm to increase its presence in the target market.


Key Companies in the Surety Market Include:




  • Berkshire Hathaway Specialty Insurance Company




  • Tokio Marine Nichido Fire Insurance Co., Ltd.




  • Allianz SE




  • XL Group Ltd.




  • QBE Insurance Group Ltd.




  • Beazley Plc




  • Swiss Reinsurance Co.




  • RSA Insurance Group Plc




  • American International Group Inc.




  • Chubb Limited




  • Munich Reinsurance Co.




  • The Hartford Financial Services Group Inc.




  • AIG




  • Arch Insurance Group Inc.




  • Zurich Insurance Group Ltd.




Surety Industry Developments


The Surety Market is projected to reach USD 1,971.3 billion by 2032, exhibiting a CAGR of 4.98% during the forecast period. The market is driven by increasing demand for surety bonds from various sectors such as construction, energy, and infrastructure. The construction sector is expected to remain the largest end-user of surety bonds, owing to the rising number of construction projects globally. The energy sector is also expected to witness significant growth, driven by increasing investments in renewable energy projects.


Furthermore, the growing adoption of digital technologies is expected to further drive market growth by streamlining the surety bonding process and reducing costs. Recent developments include the launch of new surety bond products and services by major players and the entry of new players into the market. The market is expected to remain competitive, with key players focusing on innovation, customer service, and geographical expansion.


Surety Market Segmentation Insights


Surety Market Exposure Type Outlook




  • Contract Surety




  • Commercial Surety




  • Fidelity Surety




  • Judicial Surety




  • Other Surety




Surety Market Construction Industry Outlook




  • Commercial Construction




  • Residential Construction




  • Heavy Construction




  • Infrastructure Construction




  • Other Construction




Surety Market Surety Underwriting Criteria Outlook




  • Financial Strength of the Principal




  • Experience and Track Record of the Principal




  • Value of the Project or Contract




  • Terms and Conditions of the Contract




  • Other Risk Factors




Surety Market Contract Type Outlook




  • Performance Bonds




  • Payment Bonds




  • Bid Bonds




  • Other Contract Bonds




Surety Market Regional Outlook




  • North America




  • Europe




  • South America




  • Asia Pacific




  • Middle East and Africa



Report Attribute/Metric Details
Market Size 2022 17.3 (USD Billion)
Market Size 2023 18.02 (USD Billion)
Market Size 2032 23.6 (USD Billion)
Compound Annual Growth Rate (CAGR) 3.4% (2024 - 2032)
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Base Year 2023
Market Forecast Period 2024 - 2032
Historical Data 2019 - 2023
Market Forecast Units USD Billion
Key Companies Profiled Berkshire Hathaway Specialty Insurance Company, Tokio Marine Nichido Fire Insurance Co., Ltd., Allianz SE, XL Group Ltd., QBE Insurance Group Ltd., Beazley Plc, Swiss Reinsurance Co., RSA Insurance Group Plc, American International Group Inc., Chubb Limited, Munich Reinsurance Co., The Hartford Financial Services Group Inc., AIG, Arch Insurance Group Inc., Zurich Insurance Group Ltd.
Segments Covered Exposure Type, Construction Industry, Surety Underwriting Criteria, Contract Type, Regional
Key Market Opportunities Growing construction sector Increased infrastructure spendingRising demand for specialty surety bondsDigitalization and automationExpansion into emerging markets
Key Market Dynamics Increased construction activityGrowing infrastructure investmentRise in government regulations.Demand for performance guaranteesTechnological advancements
Countries Covered North America, Europe, APAC, South America, MEA


Frequently Asked Questions (FAQ) :

The Surety Market is projected to reach a valuation of approximately 18.02 Billion USD in 2023.

The Surety Market is anticipated to exhibit a steady growth rate, with a CAGR of around 3.4% over the forecast period from 2024 to 2032.

North America is expected to maintain its dominant position in the Surety Market, accounting for a significant share by 2032.

The growing demand for surety bonds in construction, infrastructure, and energy projects, coupled with increasing government regulations, is primarily propelling the expansion of the Surety Market.

The Surety Market is characterized by the presence of several established players, including Chubb, Zurich Insurance Group, Berkshire Hathaway, AIG, and Allianz.

Surety bonds find extensive applications in various sectors, including construction, infrastructure development, energy projects, financial institutions, and government contracts.

The COVID-19 pandemic had a moderate impact on the Surety Market. While certain sectors, such as construction, experienced temporary setbacks, the demand for surety bonds in infrastructure and government projects remained relatively stable.

The increasing adoption of digital technologies, such as blockchain and insurtech, is transforming the Surety Market by enhancing transparency, efficiency, and risk management capabilities.

The Surety Market faces certain challenges, including economic downturns, regulatory changes, and increasing competition from alternative risk transfer mechanisms.

The long-term prospects for the Surety Market appear positive, driven by the continued growth in infrastructure development, urbanization, and government regulations requiring surety bonds.

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