Join Dan Huckabay, President of Commercial Surety Bond Agency, and Will Pfanmiller from Amerisure Surety for an insightful “behind the scenes” look at surety underwriting. This video reveals what might surprise most contractors about how underwriters truly focus when evaluating a bond program.
In this discussion, Will Pfanmiller, an underwriter with nearly 20 years of experience working with contractors of all sizes—from startups to those with several hundred million in revenue—explains Amerisure Surety’s unique approach. Amerisure maintains a very exclusive, limited distribution plan, partnering with only 27 surety agents nationwide, emphasizing the importance of professional surety agents in enhancing the underwriting process.
Key Takeaways from this Discussion:
While financial metrics like working capital and net worth are important, underwriters first seek to understand the contractor's "story" and the "why" behind it. This involves delving into their business plan, organizational structure, key personnel, and equipment management—what they call the "capacity piece". Financial metrics are then "dovetailed" into this understanding.
A central theme is the critical role of transparent, consistent dialogue among the contractor, the agent, and the surety. This proactive communication is essential to prevent major surprises that could negatively impact a surety program.
Contractors often have a significant impact on the quality and timing of information provided. Even if information isn't "perfect," getting it quickly removes guesswork and allows underwriters to make better, less conservative assessments of credit, maximizing what they can do from a surety capacity standpoint. This builds credibility and trust.
When problems arise (e.g., a "problem job" or unexpected loss), communicating bad news in a super timely manner with a clear plan of action (e.g., "This is how I'm attacking it... this is why I'm going to be okay") builds immense credibility. Hiding information or delays only lead to more questions and uncertainty.
A good agent acts as a "translator" between the contractor and the underwriter, helping contractors understand what information is needed and how to present it. They are trusted business partners who are not afraid to have frank conversations with contractors, even if it means telling them what they don't want to hear, and they have a firm grasp of surety as a specialty niche product. This involvement removes much of the "mystery" from the underwriting process.
