Surety bonds are not the most common product in an insurance agent’s commercial book of business. Many insurance agents are unaware they are able to fulfill their insureds’ surety bonds needs. Even more, insureds are unaware they can purchase their surety bond through their insurance agent! It’s time to change that! A multiple part blog series will cover the various aspects of surety bonds that agents need in order to empower themselves. With the proper knowledge, agents will develop the confidence to penetrate their existing book of commercial business, as well as attract new commercial insurance business by offering surety bonds.
The first step is becoming appointed with a surety or a surety bond broker, such as Allied American Underwriters (AAU), a division of USG Insurance Services, Inc. Some sureties will appoint retail insurance agents to submit bond applications directly. Other sureties are more selective with which agencies they will appoint. A surety that values top-line growth will appoint as many agents as possible. In order to protect their bottom line, these sureties may not be able to underwrite every type of surety bond and must enforce higher underwriting criteria. These sureties tend to have a general email for agents to submit submissions or online platforms, allowing agents to do all of the work. Sureties that value their bottom line will be more selective with appointing agents. An appointed agent will often have an individual underwriter assigned to them, to personally review each bond submission. Underwriting tends to be more relaxed and a variety of bonds can be underwritten. These sureties are selective, as they must appoint agents who are familiar with surety bonds and the specific appetites each surety has.
A way for retail insurance agents to have the best of both worlds is to become appointed with a surety bond broker, like AAU. By using a broker, agents can have access to all types of surety bond markets, underwriting styles, and free up their time and resources for commercial insurance business. Agents who are appointed with a broker still earn surety commissions and fulfill their client’s needs, despite their credit or backgrounds. AAU is appointed with 24 surety carriers and can place all types of bonds with varying degrees of risk.