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Marsh’s US Surety Practice wins Broker Team of the Year

Business Insurance recently named Marsh’s US Surety Practice “Broker Team of the Year” for its bank-fronted surety solution that is lowering US clients’ collateral costs and improving their liquidity positions.

11/16/2021

Business Insurance recently named Marsh’s US Surety Practice “Broker Team of the Year” in its annual US Insurance Awards program.

Launched in 2018, the program highlights exceptional work by insurance professionals working at companies across the commercial insurance industry. The awards honor teams of professionals working on specific projects.

Marsh launched its bank-fronted surety solution in 2020 amid the global COVID pandemic to help US clients address their cash flow and revenue concerns.

By replacing bank-issued letters of credit (LOCs) — used to post collateral on high-deductible casualty insurance programs — with a surety bond/counter guarantee, Marsh’s surety team knew they could free up capital and credit for clients. The problem was, US casualty carriers limit their use of surety guarantees and, in some instances, do not accept them at all for collateral requirements.

To solve for this challenge, the surety team built a panel of highly rated banks and surety carriers to facilitate bank-fronted surety transactions. While the solution — a bank-issued LOC 100% backed by a surety bond — has been in use for a number of years internationally, it had hardly ever been used in the US due to the overall acceptability and popularity of the traditional surety bond product outside of the casualty collateral space.

Since Marsh’s first bank-fronted surety transaction in June 2020, the team has closed on dozens of deals, lowering collateral-financing transaction costs for clients by as much as 50% and improving their liquidity positions.

Read more about the award win here: 2021 US Insurance Awards: Marsh, Broker Team of the Year | Business Insurance