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Surety

Marsh’s construction practice experts give their insight into surety and capacity changes on a global and regional basis during Q1 2024.
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The surety market had a challenging year, with rates generally flat. 

The UK experienced several high-profile contractor insolvencies, and there were losses among small and medium contractors in Asia and Europe. This has led to tighter underwriting criteria and reduced capacity in some instances.  

Underwriting criteria remained conservative in the Pacific, with some sureties reverting to terms and conditions, which put it at a disadvantage to bank guarantees. 

Surety is a new product in India, with strong demand. However, reinsurers have yet to initiate broad support. In the Middle East, surety has little penetration, but the increase in infrastructure and construction projects in the Middle East is leading banks to look at sureties to distribute their guarantee exposures. 

Surety is widely used in Africa, but the lack of global sureties creates a capacity challenge. Additionally, the unfavourable rating of local/regional insurers limits their participation in large international projects happening in the continent. 

Global construction market update

Global macro trends point to an encouraging outlook for the construction sector.

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Our people

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Maarten van Haaps

Head of Construction, Marsh Specialty

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Donald Gardner

Head of Construction, Marsh Specialty, New Zealand

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.

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