Surety: The greatest job nobody knows about
Whenever your skill is specialized and there aren’t enough people doing it, you become more valuable.
Among other things, 2023 will be remembered as the year Barbie made movie history, grossing over $1 billion in just three weeks.
The film’s main character is a doll that has given inspiration to millions of children, portraying over 200 jobs and professions. Barbie has been an astronaut, doctor, computer engineer, even a rock star.
But if Barbie has been in search of the perfect career, the creators have had one big miss. They haven’t envisioned Barbie as a surety underwriter — the greatest job nobody knows about.
When I attended college in the early 1980s, I tried to imagine what my career would look like. I would dream of being an economist, banker, consultant, accountant or perhaps a lawyer dealing in contract law. While I had never even heard the word, “surety,” before, little did I know that the job I would eventually land contained the best elements of all my dream jobs.
Inspired by the character Alex P. Keaton (Michael J. Fox) in the TV show Family Ties, I left college and joined a bank in pursuit of a career in lending. There were no TV role models pointing me to surety.
In the early 1990s, I joined a major insurance carrier as a property casualty underwriter. That carrier was in search of a surety underwriter and found me because of my background in lending. And I’m glad they did! I love my friends in insurance, and I am grateful I found this niche called surety.
Stumbling into an amazing career
Whenever veteran surety underwriters get together, the conversation often turns to how they got into the business. With only a few exceptions, most will say they stumbled into surety by accident. It seems nobody grows up wanting to be a surety underwriter. As a matter of fact, I recently asked a group of trainees in my region if they knew anything about surety before joining our company. All said no. Yet each is pleased they fell into an amazing career.
Unlike other jobs, there’s no quick explanation of what we do for a living. It’s confusing when we say we underwrite bonds. I once had a friend who worked for a municipality confirm she knew exactly what I was talking about. Her city was trying to get a bond passed to fund a new library. Sorry, but wrong kind of bond. Another friend understood that a good investment portfolio includes both stocks and bonds and asked if I had my Series 7 license. Again, wrong type of bond.
In our world, a bond is nothing more than a contractual promise. This is all someone needs to know about contract surety. It’s a business transaction with three parties involved: the project owner, the contractor and the surety company. By law, when public money is spent to build almost anything, a surety bond is required.
Bonds promise the owner their job will be completed per the terms of the contract and the agreed budget, and all subcontractors and suppliers will be paid. If the contractor fails, the surety will step in and make sure the job is completed per the terms of the contract and people are paid. Many nonpublic owners have found value in surety bonds and bond their projects as well.
What does a surety underwriter do?
It’s the job of the surety underwriter to evaluate the qualifications of the contractor and decide if they should be approved to bid a project. This evaluation includes running credit reports on the owners and their company, a financial analysis of their business, reference checks, and determining if the contractor has the experience to perform the work. It involves understanding the resources the contractor has, in terms of equipment and people, and how those resources fit the contractor’s schedule, given the other work they have.
Over time, the underwriter gains in-depth knowledge of construction. They learn how a successful contracting business is structured. The underwriter becomes a valuable advisor to the contractor and can suggest ways to improve a company and expand its bond credit.
Do all surety underwriters deal with construction?
Surety underwriting falls into two main categories: contract surety and commercial surety. While contract surety primarily deals with bid, performance and payment bonds for construction projects, commercial surety deals with hundreds, if not thousands, of bonds that guarantee various obligations.
On the commercial surety side, there are license and permit bonds, a vast array of court bonds and fidelity bonds. Commercial surety will often bond contracts that do not involve construction. They also write bonds that pertain to international trade.
Why is surety underwriting the greatest job?
For me, working in a professional environment is important. Surety requires collaboration with insurance agents, CPAs, bankers and occasionally lawyers. But the best part of the job is getting to know the owners of the construction companies. Contractors are smart and entrepreneurial, and we surety people get to become part of their team as trusted advisors.
Surety has opened my eyes to the way the world works. When society needs something guaranteed and people make promises, often a surety bond is involved. My work has made it possible for highways, sewers and waterlines, symphony halls, athletic stadiums and schools to be built, and it’s taken me to many exciting places as these projects are completed. I have walked a job in a remote Alaska village, bonded jobs in Hawaii and Guam, toured many military projects and bonded shopping malls and museums.
Who should pursue this career?
A career in surety would be worth a look if you possess:
- Strong interpersonal and relationship-building skills.
- Analytical skills.
- Great problem-solving skills.
- Curiosity and a desire for constant learning.
- A desire to work with great people.
I asked my trainees what they thought makes for a good job candidate. Their suggestions included being open to learning, a willingness to travel, good time-management skills, and financial and accounting experience. As one trainee put it, “While there is a lot of learning and financial analysis, you should also be able to comfortably meet new people that can possibly grow into long-lasting business relationships.”
Above all, these trainees said they valued the support they receive from other professionals in the surety industry and the relationships they’ve forged with agents and contractors. As one trainee said, “The job plays a crucial role in getting projects done and has an impact on cities and states. The job has many dynamic and engaging features that make every day different.”
Given that surety is so specialized, there are only a few of us. Whenever a skill is specialized and there aren’t enough people to go around, two things happen. If your skill is scarce, you become more valuable. As a result, the surety industry can pay very well. A second benefit is that due to the demand for our skill set, surety underwriters enjoy nearly full employment.
So, whether you’re Barbie, Ken or anyone else just starting out and you want to obtain that Malibu dream house or new Corvette, a career in surety just might be the path to your dreams.
Darrel K. Lamb, CPCU, AFSB, is regional vice president of Old Republic Surety Co. He can be reached at dlamb@orsurety.com. These opinions are the author’s own.
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