Surety is currently a $5.5-billion industry, according to David Hombach, chief underwriting officer, Construction Services, Bond & Specialty Insurance at Travelers.

And because the industry is so complex, there’s a significant opportunity for agents to step in and help manage the relationship between insurer, contractor and project owner.

But in a soft market where competition is fierce, adding value beyond price can be easier said than done. Here are three strategies for building stronger relationships with your surety prospects and clients:

1) Be communicative. Rita Jorgenson, vice president at Goldleaf Surety, says the best contractor is a proactive one. “It really helps the underwriter when they keep us informed about what’s going on, whether that’s regarding a particularly challenging project or the business in general,” she says. “Communication is huge.”

Talk to your contractor clients about not only their ongoing projects and operations, but also their future plans. For example, maybe the business owner is nearing retirement and has plans to get a child involved with the business or sell it to a third party.

“Even if that’s five or 10 years down the road, let’s be talking about what needs to happen,” Jorgenson says. “Depending on how they structure the buyout, that can totally change their equity and working capital, and thus what capacity and rate they qualify for. If they don’t qualify for the bonds to get the jobs, that could have a huge impact on the company’s bottom line.”

“It’s very important to stay on top of generational shifts,” Hombach agrees. “The next generation of leadership in a construction company may not want to work with a parent’s agent or broker. Aligning agency personnel with the construction leadership in the continuity transfer is important.”

2) Sell it where it’s not required. According to Hombach, large swaths of corporate America don’t currently require bonds when they build. For the surety industry, “it’s always been the goal to more fully convert the private sector to surety bond users,” he points out. “In order to accomplish this, the industry has to build a product that both meets the needs of a corporate owner and performs as advertised.”

Hombach says the National Association of Surety Bond Producers recently launched an effective marketing campaign to accomplish exactly that. But now, “the industry needs to go out and sell it,” he says. “That’s where agents can help—by showing corporate America the benefits of bonding a project.”

To be of more value to owners, you must be able to sell a surety product “that responds quickly and has a certainty of outcome which defends delivery dates,” says Hombach, who adds that the industry is currently responding with “new bond forms that commit to faster response times, support the costs for mitigation and supplementation of poorly performing subs while the surety investigates the claims in order to keep the projects running, and provide a dedicated claim persons contact information for improved and more timely communications.”

3) Shift the focus away from price. Surety clients who are taking advantage of the soft market by constantly shopping their account for a lower rate may be in for a rude awakening in the future—and as their agent, it’s your job to make sure they understand the consequences of that approach.

“We have clients that have been established with sureties for a long time, which creates a strong relationship and trust,” Jorgenson points out. “If the client has a larger-than-normal project they would like to bid on and it’s pushing their current limits, the surety is more than likely going to support their request due to the relationship they have with the client.”

By contrast, “if contractors are constantly shopping for rate and switching sureties, they never build a relationship with a surety,” Jorgenson explains. “Without the relationship, all the surety has is the black-and-white numbers on paper. They don’t really know the contractor at all.”

That’s the kind of knowledge that can help you prove value. “We have seen agents lose 50-year business relationships because they stopped bringing value to their customer,” Hombach cautions. “They might have been sending their client all the bonds they asked for, but they were doing nothing else to help them as their business grew and evolved. On the client service and support fronts, there can be no resting on your laurels.”

To differentiate yourself and better serve new and existing customers, “you need to bring relevant and impactful products and services to clients that help them run a better business,” Hombach says. “If you can identify needs within a firm and bring solutions of value, you will not only gain an audience—you will usually win that piece of business.”

Jacquelyn Connelly is IA senior editor.