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SubSecure: A subcontractor financial analysis service

Subcontractor default presents a substantial risk. Marsh’s SubSecure platform measures financial factors to identify subcontractors with a high risk of defaulting.

Subcontractor default presents a substantial risk. A struggling subcontractor can have far-reaching financial and performance consequences on construction projects. In a worst-case scenario, a subcontractor default could jeopardize profit margins, adversely affect relationships between the contracting parties, and result in project delays.

General contractors, construction managers, owners, developers, and lenders must take steps to mitigate the risk of subcontractor default. This can include a thorough review of subcontractor qualifications prior to subcontract award. 

Financial analysis with SubSecure

Marsh’s SubSecure platform measures financial factors to identify subcontractors with a high risk of defaulting.

The analysis process includes:

  • Evaluating the subcontractor’s financial reports against standard financial reporting guidelines.
  • Scoring a subcontractor’s balance sheet, work in progress (WIP) schedule, income statement, and cash flows by comparing them to ratios commonly used by sureties in their underwriting reviews.
  • Reviewing subcontractor credit reports to identify any liens, judgments, or lawsuits outstanding.
  • Generating a score in four quartiles of risk, representing a measure of a subcontractor’s financial position. Marsh provides quarterly reports to the client stakeholder detailing the overall quality of the subcontractor portfolios.
  • Data Navigator, Marsh’s proprietary digital platform, which provides additional insight by centralizing and aggregating subcontractors’ pertinent financial qualification data. The online portal enables the submission of financial data, documents, and reviews by multiple stakeholders. The Data Navigator SubSecure platform provides online dashboards and reports updated in real time as underlying data is refreshed. 

Who it’s for

  • General contractors, construction managers and companies, owners, and lenders facing the risk of subcontractor default.
  • General contractors or construction managers who have, or are considering the purchase and use of, subcontractor default insurance (SDI).

What you get

  • A subcontractor benchmark report that scores a subcontractor’s financial factors against 10 important areas to identify if they present a high risk for potential default.
  • A subcontractor portfolio report to analyze the overall credit/financial quality of your subcontractors and manage your SDI program.
  • A method of financial prequalification approved by every carrier in the SDI marketplace.
  • Online access to Data Navigator SubSecure platform, to review the details and risk outcomes of subcontractors’ financial submissions.
  • Access to a variety of additional risk control services from Marsh.

Marsh’s Surety practice can help you with the tools you need to manage your subcontractor financial risk better.