WILMINGTON, DE, UNITED STATES, May 7, 2026 /EINPresswire.com/ -- SuretyScience™ today announced its advancing transformation initiatives and introducing patent pending data products that enable significantly increased process automation and accelerates adoption of artificial intelligence across the Surety industry, a specialized line of insurance.

At the center of this effort is The Surety Blueprint™, an optimized future operating model developed by SuretyScience that enables the Surety industry to achieve full automation and unlock the power of artificial intelligence. Its foundations are uniform processes, industry wide technology standards adoption, and strong data governance.

While surety insurers, agents, and obligees increasingly recognize the potential of automation and artificial intelligence, the industry has remained historically resistant to change. A continued reliance on highly manual processes, non‑standardized data, and disconnected systems has constrained efficiency, reduced transparency, and imposed a clear ceiling on growth.

Gallagher's Risk Placement Services division has acquired S Philips Surety & Insurance Services.

The deal expands Gallagher's U.S. wholesale brokerage and programs business.

The acquisition strengthens NYSE:AJG's presence in the surety and specialty insurance distribution segment.

For NYSE:AJG, wholesale and program business is an important part of how the company reaches specialty insurance buyers and supports retail brokers. Surety, where S Philips is focused, tends to be relationship driven and often tied to construction and infrastructure activity, which remain key areas for many insurers and intermediaries. This deal reflects a broader industry pattern of large brokers adding specialist wholesalers to broaden product reach and deepen expertise.

Investors watching NYSE:AJG may view this transaction as part of the company’s ongoing use of M&A in core areas rather than a move into entirely new lines. The acquisition adds another distribution platform that may help Gallagher expand its network of client and carrier relationships over time, which is often a focus for brokers aiming to scale specialized segments like surety.

Washington, D.C., United States, March 03, 2026 (GLOBE NEWSWIRE) -- Largest Legislative Fly-In Brings Industry Message to Congress

The Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP) hosted their most successful Federal Legislative Fly-in to date, bringing a record number of surety professionals from across the country to Capitol Hill to engage lawmakers on the value of surety bonding as a proven safeguard for protecting taxpayer dollars and mitigating risk on federally supported projects.

Canada’s contractors are gearing up for a flood of federally funded infrastructure work. At the same time, the surety market supporting those projects remains stubbornly soft - even as claims pressure rises.

For Steve Hastings (pictured right), SVP, head of surety for Liberty Mutual Canada, that combination should make brokers and contractors far pickier about whose paper they rely on.

“In times of plenty, we sometimes see some additional surety providers enter the market,” he said. “Some international, some from the US. And these are the ones that you will see… It takes a number of years for the process to play out and for some sizable losses to occur. And they may exit almost as quickly as they came in.”

From the outside, a soft market – more players, more capacity, keener pricing – can look like a win for buyers. Hastings said that view ignores how long it takes for large surety losses to materialize, and how exposed contractors can be when a provider pulls back or leaves the country mid-project.

“It’s currently a tough go for a contractor in Canada,” he noted, pointing to elevated claim activity in the surety sector tied to recent geopolitical and economic uncertainty. “It can be difficult to understand the aggressive facility terms being extended in such a tough environment.”

Aiden Lanzon (pictured left), SVP, Quebec regional leader and construction national practice leader at Liberty Mutual Canada, drew a parallel with other specialty lines that have seen an influx of capacity from players without much loss history.

“These are big projects for insurers,” he said. “At the beginning, you sign the contract. Then the premiums start to flow in. But you’re involved in a project for a long period – six, seven, eight or even nine years. That’s why underwriting is so important.”

In a $115 billion infrastructure cycle, he warned, claims are not a surprise.

“In these large and complex projects, which will likely cost billions, there’re going to be claims,” Lanzon said. “That’s inevitable. But insurers can play a key role in helping prevent the events that cause claims through risk engineering and in effectively managing them.”

When your surety (or insurer) doesn’t go the distance

The risk, Lanzon argued, isn’t just that newer entrants may underprice early projects. It’s that they may not be there when something goes wrong years later – or when a contractor needs to extend or restructure coverage as timelines and costs shift.

“You want to consider whether, as contractors need to understand the pipeline of these projects, you have an insurer who’s going to be there for the long term,” he said. “These projects are so long… A project that says it’s going to take six years is likely going to take seven.”

From the risk‑transfer side, continuity matters when terms need to change.

“Infrastructure projects are long and complex, so they are likely to change as construction progresses. It’s practically a given. That’s why it is so important to work with an insurer committed to the market, with a dedicated and stable team of professionals that can partner with the broker and contractor to refine the risk management program as the project evolves, bringing the right resources and products to bear.”

“Otherwise, you’re introducing a potential risk there,” he added.

He urged brokers and contractors to be “really selective” about which carriers they partner with on multi-year infrastructure work.

“Do they have an established track record of doing big, large projects like this? Because this is big and tempting money,” he said. “A lot of different construction insurers are going to say, hey, I’m willing to do this, I’m willing to do that. The good brokers and the good clients understand who the long-term partners are, the ones who will be able to support them through those projects.”

Claims as an education - if you have the right partner

Lanzon also highlighted the complexity of losses on mega‑projects, where multiple parties, layers of coverage and large dollar figures are the norm.

“The claims process can be arduous, it can be long,” he said. “You want to ensure that you have the insurance companies that are familiar and know how to manage these claims. Because some companies may see an $80 million loss, and start to be concerned.”

By contrast, he noted, Liberty Mutual operates at a global scale.

“Liberty Mutual is a big company. We pay hundreds of millions in claims every single year,” Lanzon said. “Because we play on these large projects around the world, we know how to mitigate and manage the risks associated with them, and how to effectively manage their claims.”

That experience, he argued, turns claims into a learning tool rather than an existential threat.

“As we say on the insurance side, a claim is like an education,” Lanzon said. “Having a dedicated, stable team creates institutional knowledge. Looking across a deep construction book lets your team apply that collective wisdom.”

For Hastings, the message is similar on the surety side: capacity quality matters more than headline price when the cycle turns.

“We’re obviously going to match our construction strategy to our broker partners who share and believe in that same strategy,” he said. “When you get the contractor on board with that as well, it’s a perfect partnership.”

WASHINGTON — Today, the U.S. Small Business Administration (SBA) announced that its Surety Bond Guarantee (SBG) Program delivered record results in fiscal year (FY) 2025 with $10.6 billion in guarantees, marking the strongest year in the program’s history. In FY25, the program supported more than 2,200 small businesses – especially those within the construction, contracting, manufacturing, and fabricating sectors.

“In addition to surpassing the $100 billion mark in 2025 for small business lending and SBIC investment, the Trump SBA guaranteed a record $10.6 billion through our Surety Bond Guarantee Program to support small manufacturers, contractors, and other job creators across our industrial base,” said SBA Administrator Kelly Loeffler. “With historic backing from the SBA, this Administration is empowering small businesses as they meet new demands for hiring, growth, and investment made possible by the America First economic agenda.”

Through its Surety Bond Guarantee Program, the SBA provides a guarantee on surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties. Surety bonds help small businesses compete for and win public and private contracts by providing the customer with a guarantee that the work will be completed.

The results underscore the agency’s broad success in expanding access to capital, strengthening domestic manufacturing, and helping small businesses reduce their regulatory burdens. Last year, the agency approved record lending through its 7(a) and 504 loan programs, totaling $45 billion to more than 85,000 small businesses. Combined with capital deployed through the SBIC and SBIR programs, the agency supported over $100 billion in capital in FY25.

Surety Bond Guarantee Program Record Performance Highlights:

The United States surety insurance market has enjoyed a boom the likes of which it has not seen in 10 years.

The United States surety insurance market has enjoyed a boom the likes of which it has not seen in 10 years.    (Adobe Stock photo) With a hat tip to the Federal Reserve for funding transportation construction initiatives such as the IIJA and IRA, the surety market has seen steady demand for construction bonds.   (Adobe Stock photo) The surety insurance sector saw a marked improvement in its direct incurred loss ratio, which fell to 20.5 percent through the 2025 third quarter. It was at 24.9 percent in 2024.   (Adobe Stock photo) With the impending expiration of legislation such as IIJA, the surety market is banking on continued bond demand this year, as well as the need for insurance solutions for renewables, data centers and infrastructure for power needs.   (Adobe Stock photo)

Because of the infrastructure sector, the surety insurance market is achieving profit margins it hasn't seen in 10 years.

Experiencing "a golden era of profitability," these insurers also can thank the fed for funding the transportation construction initiatives that are feeding steady demand for contractor and developer bonds.

Though not without its challenges that could erode big gains, the surety market is looking good.

"These stellar results reflect more than simple scaling," notes the editorial team at Risk & Insurance of the report from global credit rating agency AM Best.

The industry's direct incurred loss ratio improved dramatically, falling to 20.5 percent through the 2025 third quarter, compared with 24.9 percent in 2024.

The surety line maintained relatively stable pricing, with increases of less than 1 percent for 13 of the past 14 quarters, according to the AM Best report.

Despite that, the line generated nearly double-digit premium growth through the first nine months of 2025, the report said.

R&I editors wrote that the surety industry had a net profit margin of 45.6 percent in 2024. That's its highest level since 2014.

The industry's underwriting profits topped $2.35 billion for the third consecutive year, according to the Best research.

"This organic growth … demonstrates the robust underlying demand for surety bonds as contractors undertake more projects," said R&I.

They believe the growth is driven by "macroeconomic factors rather than rate increases." Chiefly, the IIJA, IRA and the CHIPS and Science Act.

These federal transportation-related bills have been instrumental in propelling this expansion, AM Best said.

"These legislative initiatives have directed substantial funding toward clean energy and semiconductor manufacturing projects," said R&I.

And at the heart of them, many of these initiatives require surety bonds for contractors.

Bright Outlook Despite Potential Slowdown

The Small Business Administration (SBA) announced in January that its Surety Bond Guarantee (SBG) program delivered record results last year. With $10.6 million in guarantees, the program enjoyed the strongest year in its history, supporting more than 2,200 small businesses.

"Especially those within the construction contracting, manufacturing and fabricating sectors," said the federal agency.

Beyond surpassing $100 billion in small business lending and investment in 2025, the SBA guaranteed a record $10.6 billion through the SBG program. Through its SBG program, the agency provides a guarantee on surety bonds for certain surety companies. This, it said, allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties.

"Surety bonds help small businesses compete for and win public and private contracts by providing … a guarantee that the work will be completed."

Last year, the agency approved record lending through its 7(a) and 504 loan programs, totaling $45 billion to more than 85,000 small businesses, it noted. Combined with capital deployed through the SBIC and SBIR programs, the agency supported more than $100 billion in capital in FY25.

However, Kenneth Araullo with Insurance Business magazine reported funding from IIJA will wind down as the legislation expires in September 2026. This "could result in a slowdown in public spending," he said, but "other sectors are presenting growth opportunities for surety insurers."

Demand is expected to continue this year, said Araullo, in tandem with insurance solutions for renewables, data centers and infrastructure for power needs.

As tech advances and insurers explore emerging risk areas, "the build-out through additional projects may spur future premium growth," David Blades said.

Associate director of AM Best, Blades attributes the growth to public and private infrastructure initiatives over the near term.

Surety insurers may see an increase in bottom-line profits for the year, said Robert Valenta, a Best senior financial analyst.

Aggregate premiums are higher and loss ratios lower during the first nine months of 2025, he said.

Valenta noted, too, that results through that period show both continued growth for surety insurers and favorable underwriting trends.

Insurance Business reports that surety insurers have maintained underwriting and operating profitability.

They produced net profit margins above 30 percent during each of the past 11 years, from 2014 to 2024.

AM Best found that the surety line's net profit margin has outperformed every other major U.S. commercial line of insurance over that period.

"However, the … surety segment's relatively low premium volume limits its impact on the overall property/casualty industry profit margin," Araullo wrote.

Best said that from a comparative perspective the surety line's net profit margin has outperformed every other major U.S. commercial line of insurance.

With the impact on the profit margin for the industry, "the relatively low premium volume for the surety line limits that benefit," Best said of its findings.

While infrastructure investment has created a favorable environment, underwriters face mounting pressures that could erode recent gains, AM Best said.

R&I noted rising construction costs, skilled labor shortages and supply-chain disruptions are increasing claim incidences and elevating losses for insurers.

"The tight labor market has forced sureties to adopt firmer underwriting standards, disciplined pricing strategies and stricter risk selection practices."

High underwriting expense ratios mean "a formidable barrier to entry" for insurers lacking specialized systems and operational efficiencies, Best found.

"This expertise-intensive barrier has kept the market relatively consolidated," R&I said of the Best research.

Most surety specialists are dedicating more than 90 percent of their net premium written to the surety line.

"This structure also demonstrates the technical competence required to navigate the complexities of surety underwriting successfully," according to Best.

Private construction spending has declined moderately through the first half of 2025, a shift that could signal challenges ahead for premium growth, noted R&I.

"The decline in private sector construction has been partially offset by increased public construction," the editors said.

The spending is tied to ongoing infrastructure projects, "but this advantage carries an expiration date," R&I stressed.

What Happens After IIJA Expires?

Last August, the AGC released a detailed explanation of potential scenarios, once the IIJA in particular expires at the end of September 2026.

Reprinted in an issue of Ohio Contractor magazine, the article explained that IIJA provides the Highway Trust Fund (HTF) with expenditure authority.

It provides the ability for state and local governments to get reimbursed for obligations for projects.

As AGC explained, "this expenditure authority ends unless Congress passes an extension or a new reauthorization bill."

Payments on projects already obligated continue, but lettings, new grant agreements and many discretionary awards pause until Congress restores authority.

"DOT's own lapse plans underscore this: during an authorization lapse, federal-aid highway programs stop obligating new funds," AGC said.

So, what will Congress do? "History suggests we should be ready for a period of extensions before a deal lands," said the construction association.

Extensions keep formulas moving but inject planning uncertainty and can push lettings to the right if obligation limitation arrives late, it continued.

"Governors have already warned that any lapses could threaten states' abilities to maintain roads and bridges."

AGC believes discussions around the next full five-year reauthorization will focus on how to fund our nation's transportation infrastructure.

It noted that fuel taxes, the HTF's main revenue source, haven't been increased since 1993.

"And the CBO projects that under current policy, the highway account will run short of cash by FY28, with annual gaps approaching $40 billion."

AGC said analyses of CBO's baseline suggest holding spending near IIJA levels through FY27-31 would require nearly $150 billion in added resources. These resources would have to happen through either more general fund transfers, new user revenues or some mix of both.

"That reality makes a ‘same as IIJA plus all the advances' outcome less likely," said the association.

In other words, said AGC, Congress can most easily keep the HTF formulas steady for FY27 under an extension or a modest "skinny" reauthorization. This is possible because the structure already exists and states rely on it, said the association.

Recreating the extra billions for bridges and megaprojects, in particular, is the expensive choice.

The AGC said doing so requires fresh general fund commitments beyond the trust fund baseline.

"If lawmakers are searching for ways to pare back totals without cutting core formulas, dialing down or dropping the advances is the low friction lever."

So, what does all this mean for contractors in 2027? AGC told members it's safest to expect formula-heavy letting calendars and a leaner discretionary grant environment.

"In addition, expect some possible timing friction," the group said. Even if Congress avoids a lapse, multiple short extensions can shift bid dates and cash flows.

DOT's lapse guidance also reminds that while reimbursements continue for obligated projects, new obligations can't proceed without authority in place.

AGC advised members to track two numbers: The FY26 obligation limitation and the Division J annual amount that falls off without a new vote.

The FY26 obligation limitation is a workable proxy for a "flat" extension, the association explained.

Together they explain why the years following IIJA's expiration are likely to feel thinner, even if headline formula numbers look flat in nominal terms, said AGC.

"When you layer on the increased construction costs, flat nominal dollars will buy less work than they did when IIJA launched." CEG

OLDWICK, N.J.--(BUSINESS WIRE)--The February issue of Best’s Review includes the following exclusive rankings:

Largest Surety Insurers

Largest MENA Insurers

Best’s Review is AM Best’s monthly insurance magazine, covering emerging issues and trends and evaluating their impact on the marketplace. Access it here.

For Best’s Review advertising opportunities and a complete media kit, visit AM Best Advertising Services.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Ottawa’s latest federal budget promises roughly $115 billion in infrastructure spending over five years – a pipeline of mega‑projects that will reshape roads, hospitals, ports and power systems across Canada. For contractors and their brokers, it looks like a once‑in‑a‑generation opportunity.

From a surety perspective, that’s exactly when things can go wrong.

Steve Hastings (pictured), SVP, head of surety for Liberty Mutual Canada, said the riskiest periods for contractors aren’t downturns – they’re booms.

“We see more contractors fail in times of plenty than in leaner times,” he said. “When there’s a lot of spending and a lot of work, contractors believe they have the ability to take it all on and complete it successfully. Contractors are very confident and very proud.”

Ottawa’s latest federal budget promises roughly $115 billion in infrastructure spending over five years – a pipeline of mega‑projects that will reshape roads, hospitals, ports and power systems across Canada. For contractors and their brokers, it looks like a once‑in‑a‑generation opportunity.