This is part of a series sponsored by IAT Insurance Group.
Whether you’re just starting out or considering a mid-career career, there’s a lot to be said for the insurance industry – but often the unknowns are an opportunity to prove yourself.
What is the guarantee?
Although a guarantee is a form of insurance, it is not insurance. Businesses often act as unsecured creditors who evaluate the creditworthiness of a business and/or individual when deciding whether to offer collateral services as collateral. The writing process usually consists of a thorough analysis of the organization’s finances or personal financial documents that require bonds, evaluation of business experience / business skills and credit history among other things in the writing process.
Security bonds are almost always issued by insurance companies that have a dedicated team of professional underwriters and administrators. Sureties usually operate their businesses focusing on two aspects – Contract and Commerce. Contract writers focus on the construction industry while Commercial writers focus on both non-construction business and personal needs.
An important part of a Contract Surety Underwriter’s job is working with construction companies that do construction work, building everything from capital equipment to roads, bridges and other important infrastructure.
For example, when a construction project is built, contractors are required to provide performance bonds and payments often based on the amount of construction work. Bonds guarantee that contractors will meet the requirements of the construction contract and that all subcontractors and suppliers who provided work or materials to the project will be paid. If the contractor fails to do these things, the project owner can place interest under the performance contract and if there are subcontractors or suppliers who have not been paid, they can place interest under the payment loan. If the warranty is lost, the contractor in this example is responsible for all compensation to the insurance company for his loss and expenses.
So how can an underwriter prove that their contractor is capable and helping them with a multi-million dollar joint venture? They also review contract requests and contracts, and follow up by asking questions to better understand the project and the contractor. Surety underwriters will review the construction schedule, contract start date and how that date will work with existing contracts, guarantees, and payments – and more – all to better understand the risks of the project. Meanwhile, the guarantee also includes a strong opinion on the financial, organizational and technical aspects of the contractor.
In addition to the construction industry, certified registrants examine a variety of industries that require security services, including automotive businesses, long-haul vehicles, retail, hospitality, construction and commercial, healthcare, financial institutions and many others.[1]
Surety experts do it all
Instead, a guarantor should be an accountant, a lawyer, a contractor or a business owner, a salesperson and a business advisor to their clients.
With a collateral bond, organizations that need collateral, also known as obliges, can reduce their risk. A security bond serves as a guarantee that the business or person in need of an inheritance has the money, knowledge, etc. to fulfill the obligation.
The way to work for sure
In terms of service capabilities, the surety has a lot to offer, including traditional insurance services such as underwriting, claims and distribution (agency/brokerage). There are also administrative and operational roles such as account managers, strategic management and leadership roles.
For entry-level clerical and consulting positions, a bachelor’s degree in finance, accounting, risk management, construction management or law is preferred. However, if a middle-aged professional does not have a preferred education but has many years of practical experience from other industries such as banking, credit and financial analysis or construction management, they may also be suitable.
Here are a few skills available to security professionals:
- Building great relationships is a great people skill
- High level of intellectual curiosity, and interest in various industries
- The desire to change and grow all the time
- Analytical skills
- Business interests
- A problem-solving mindset
Now is the time to consider the verification process
For anyone planning a career, now is the time to think about assurance because there is a huge demand for talent.
Many professionals will retire in the next few years, so these companies are doing what they need to do to recruit and train the next generation of writers and assistants.
To meet their professional needs, several companies, including IAT, offer summer internships to college students and have internship programs designed for entry-level positions – all with assurance and other insurance services.
These companies are also doing a lot to promote diversity. IAT’s Surety Business Unit, for example, funds the Surety and Fidelity Association of America’s (SFAA) Surety Foundation, which works to bridge the gap between the assurance and fidelity industry.
To learn more about what the IAT certification service can offer, please visit our website.
[1] Surety Bonds Direct “4 of the Biggest Companies That Need Bonds,” February 5, 2021.
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