Secrets of Bonding #166: Meet the Weatherman

Tonight’s forecast: Dark!

We like to joke about the TV weather team: “I wish I had a job where I could be wrong 50% of the time!” *  But in reality, we still tune in and watch.

   Question: Is a surety bond underwriter just like a weatherperson?  How are they similar?

Both are paid to make predictions.  They gather and analyze information: “Crystal ball gazers.”  There is a hope / expectation that they will achieve some degree of accuracy.  Whether you are forecasting the POP, or the completion of a construction project, isn’t it just about the same?

You know forecasters use computer models.  They have the National Weather Service and there are Canadian and European Models.  They could just put that up on the TV screen!  We don’t really need the “local weather talent,” do we? 

What about bonding? Many sureties already use computer based programs.  These provide instant or quick answers on surety bonds that fall into certain categories.  Is that all we need?  Should we get rid of the Surety Underwriter / Weatherman entirely?  We say “No!”  Here’s why…

  • The Underwriter does more than predict the future. A good underwriter contributes to the outcome.  Their efforts positively affect many people. 
  • When bonds are approved, the bond agent makes money.  The construction company achieves new revenues. So do their suppliers and subcontractors.  Think of the ripple effect!
  • The bonding company and their reinsurers make money. 
  • Presumably something of value is built for the owner; a useful asset is created. 

Really good underwriters are more than “yes / no” decision makers, they are facilitators. The experienced underwriter sees a path forward that may not be obvious to others.  How can this deal (performance bond) be supported while protecting the interests of the surety, the guarantor of the project’s success?  Here’s where knowledge, experience and attitude come in. 

Does the underwriter want to make the deal happen, and have the know-how to do it?

These high level underwriters aren’t weathermen, they are Rain Makers!  They work actively to produce profits and success for all they touch. Without their expertise, projects would not be supported and built.  Doors get opened and companies reach new, higher levels of mutual success. 

This is a combination of science and art with a dash of experience.  And you don’t find it too often.  But when you do, grab an umbrella and watch good things happen.

Steve Golia is a long established surety bond provider and expert. Call us with your next bid or performance bond. 856-304-7348 

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*  Actually, weather forecasters average more than 80% accuracy.  Good job guys!

Surety Derangement Syndrome “SDS”

Why wouldn’t you be upset?!

You need a bid or performance bond for a construction project (you need it now). 

It goes from the underwriter who loves it, to the supervisor to the bond manager, then to the genius in home office who HATES it! And it only took two weeks to get… a declination.

There are just too many layers! Naturally you have Surety Derangement Syndrome!

The good news is that we will provide a solution. Here it is, your very own, “Preferred Access Code.” With this code you can cut through all the layers. You want to get right to the decision maker. Talk to the person with the authority to make it happen. Present your case and have the dialogue that can result in an approval. This is the process you’ve been hoping for, but nobody would allow you.

With your special Preferred Access Code, you can talk directly with a $10 million underwriter. Just think of it. You pick up the phone, make the call, and immediately, you have access to a $10 million approval. Awesome.

Get a pencil and write it down. Here is your special Preferred Access Code:

GIMMESTEVEPLZ

Call this number 856-304-7348 and enter your Preferred Access Code.  You will immediately be connected directly with the decision maker. Not a receptionist. Not a computer: “Your call is very important to us…” 

Not a Junior Assistant Underwriting Trainee. This is the real deal.

Say goodbye to your chronic SDS! Steve Golia is a long established surety bond provider and expert. Call us with your next bid or performance bond. 856-304-7348 

Test your code today to verify it works, and you can use it all day, every day. That’s right. You don’t have another surety like this.

Here it is again:

856-304-7348

“GIMMESTEVEPLZ”

Secrets of Bonding #164: The Phantom of the Underwriting Department

When it comes to surety bonds, you know your underwriter. You know the process.  There are questions and answers, then a decision.  Simple, right?

You rely on your rapport with the surety and know how to monitor the status of the underwriting.  Maybe you understand the underwriter you see.  But what about the invisible surety underwriter, a shadowy phantom who exists in every transaction, and whose opinion always affects the outcome. Call this mysterious one “The Phantom of the Underwriting Department.” 

For mood music, Click!

You cannot talk to the Phantom…

Invisible.

There are no emails, no Q. and A. 

And yet, the Phantom analyzes, reviews and influences every bonding decision.  Let’s pull back the curtain on this ethereal being.

Contractors Questionnaire

It all starts here.  Your underwriter looks at the basic info: How long in business?  Largest prior jobs? What do they do, what do they sub?

But the phantom yearns for more. What company ownership structure was chosen?  Is it a proprietorship, corporation or LLC?  Did the founders make prudent decisions? These choices affect taxes, profits and future liabilities.  They can help or hurt the company… and its surety.

If criminal history, litigation, tax problems or surety bond claims / losses are indicated, these may require further investigation.  The Phantom will make a deeper review.

Continuity of Ownership: Who succeeds the current stockholder in the event of death? Will the company maintain operations and complete its projects? These arrangements show that management has an eye toward the future.

The Work In Process Schedule

These are requested often.  They show the contracts in progress, their billing status and costs. The underwriter wants to know how much “work on hand.” Then, silently, the Phantom digs deeper.

The current expected profit is compared to the original estimate. What does this show? Is the profit expectation as predicted or better? Is the estimating department in sync with the field organization?  Is job site supervision highly efficient? Can an undeclared underbilling asset be added to Working Capital?

Is the expected profit sufficient to produce a net profit at year end?  The Phantom will compare the projected job profit percentage to the company Profit and Loss Statement. Based on historical expense trends, the likelihood of an upcoming profitable fiscal year-end can be verified.

Company Financial Statements

He loves these.  There is so much.  They talk to him. The Phantom takes full advantage of this document to determine more than just “the numbers.”

Beginning with the accountants cover letter, who has the contractor chosen for this important assignment? Are they using a construction expert? Did they pay for a quality presentation?  Is the best accounting method in use? Is the fiscal date at an advantageous point in their business cycle?

Obviously, underwriters look at working capital, net worth, ratios, profitability. But there is so much more.  The financial statements show how the stockholders / managers treat the company.  What does it mean to them? Do they nurture and respect it, growing the tiny acorn into a mighty oak?

Past borrowing practices are revealed.  Also, the relationship between financial performance and the ambitions of management.

Growth of the revenue stream is observed and management’s success in monitoring / controlling expense levels.

The Phantom reviews financial statements and tax returns to appreciate the owner’s commitment to the bonded company.  This commitment is a cornerstone of the underwriter’s confidence.

Banking Relations

Very important! There are similarities between banking and surety bonds.  The banker’s opinions help reaffirm the underwriting position.

The banking history can reveal good cash flow and prudent business practices.  It can indicate stability, reliability and good management skills.

Credit Reports

The pay record is just the tip of the iceberg.

Now there is a historical review which indicates the adequacy of cash flow, the quality of money management, planning and the applicant’s good moral character.

The Phantom is always there, making this deeper analysis that may never be discussed, but can always make a difference.

Meet Our Phantom

Now, Remove the Mask!

Sorry, we don’t actually have any Phantoms.  All our underwriters are regular people, with real experience and know-how when it comes to bid and performance bonds. Our surety professionals review the facts promptly and efficiently. 

Their deep analysis enables us to support opportunities that may have been declined elsewhere – up to $10 million each.

We hope you found this article entertaining, but more importantly, informative!  With us, the underwriting is deep and detailed, giving the applicant the highest likelihood of approval.

Call us with your next bid or performance bond, and speak to a real person. 856-304-7348 

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It’s SO HOT!

Record heat is being recorded in many parts of the country.  But what else is hot?

  1. Floyd Mayweather – Hot earner made $7.6 million per minute for his fight with Connor McGregor
  2. Stephen Curry – Hot contract, NBA’s first for over $200 million
  3. Timothy Berners – Lee (never heard of him?) Inventor of the world-wide web and creator of the first web site. He changed everything. Very hot.
  4. Surety Bonds by KIS – Exclusive national underwriters for Great Midwest Insurance Company!
  5. Bill and Melinda Gates – Hot philanthropists donated $4.78 Billion in 2017. (Don’t worry, they kept some for themselves.)

What was that number 4, Surety Bonds?! Come on!  How can they be hot?

Glad you asked:

Surety bonds are a special area of the business.  They are unique and difficult, an opportunity and sometimes an obstacle.  But they are always a chance to shine: A path to greater success for you and your clients.  All you need… is a way to get there.

What if the surety underwriters were cooperative and production oriented?

Wouldn’t THAT be hot?

You need to ask yourself

  • Do my underwriters promise a same day response?
  • Do they help me find a way to write the business?
  • Are they open to a wide range of underwriting situations?
  • Are they Problem Solvers?

If not, you need to heat up your surety bond production.  Find out why agents bring their big / tough contract surety bonds to us.

Same day response.  Bonds up to $10 million.  Flexible and creative.  THAT’S HOT!

We can help you solve your next contract surety need. Call us! 856-304-7348

Our Surety Agents Look Good

* Tuesday 6/19/18: We received an urgent submission.  A new client needed a $1 million final bond. We reviewed the file immediately and sent back our “road map to success.”

Complicating factors:

  • New file.  Short fuse.  All the basic analysis, credit reports, financial evaluation, indemnity agreement, etc. were needed.
  • Another surety had issued a bid bond, but because of unexpected developments, was unable to provide the final bond
  • There was a bid spread
  • The job specifications needed clarification regarding the surety obligation and possible requirement for a maintenance bond
  • Company year-end FS was a draft
  • Analysis regarding the collection of FYE Receivables was needed
  • Two other sureties reviewed this opportunity, causing the clock to run down for the client

* Wednesday 6/20: Agent provided additional info.

* Thursday 6/21: An engineering evaluation of the project was completed, including the adequacy of price.  Wednesday evening and Thursday, the underwriting review was completed. Bond is approved!

*Friday 6/22: Bond is issued and in the hands of the agent and contractor.

Actual agent comment: “Thanks so much!  Great job!”

Making our agents look good.  That’s what we do.

We can help you solve your next contract surety need. Call 856-304-7348

Bucket List: Update

Great news!!  Today you can check off one more item from your Bucket List!

Current Bucket List:

  1. Learn to bartend like Tom Cruise in “Cocktail”
  2. Visit Abbey Road in London and re-create The Beatles’ cover
  3. Hug Mickey Mouse
  4. Write my name in wet cement
  5. Bury a time capsule
  6. Ride a Vespa
  7. Find a Bonding Company as Good as I Want
  8. Make a tie dye shirt
  9. Be the house on the block with the most Christmas lights
  10. Try every cheesecake at The Cheesecake Factory

Today you can finally check off #7: “Find a Bonding Company as Good as I Want” There are two big questions and we will answer them now.

Question

What do you want from a bonding company? They must have capacity.  If the company is too small, they can only write tiny bonds.  They are of little use to Surety Bond Agents and their Contractor clients.

Good credentials.  The bonds must be widely accepted so contractors can use them on various contracts, in any state.

Flexible underwriting.  The process of getting the bond approved must be willing and aggressive, like the underwriters actually want to write the bond.

Speed.  You can’t wait forever for an answer.  How long should it take the underwriter to respond?  Basically, your Bucket List surety will give you a same day response.

What about speed? Our underwriting expertise originated in the early 70’s!  We have lots of experience solving problems for our clients efficiently and with a same day response.

Hooray!  You nailed #7.  When you need the next bid or performance bond call us: 856-304-7348.

Now, here is a link to help you with #1: Click!

Security Solutions!

If you have read my (numerous!) surety articles online, you may think bonds are the only thing I care about.  While this is true, I do have ideas on other subjects and here is one that has me worried: Cyber Security.

The threats are all around us: Phishing, hacking, denial of service attacks, viruses, identity theft and credit card fraud.  It is obvious that the bad guys will never let up, never stop looking for ways to take advantage of people – unless we do something dramatic to thwart them forever.

So here they are, solutions that are inexpensive or FREE! that will help protect you, your privacy and your assets.

Protect Your Data

Do you trust the “cloud”?  What if they lose your data, sell it or they get hacked?! Here is a solution that will protect your passwords, account numbers and other valuable info, prevent all internet and email scams and assure that you have complete access to all your info, all the time.

This solution is portable and permanent, and the total cost is (you’re gonna love this): $1.79 at Staples. 

This security solution is called a “Pocket Notepad.”  Here’s how it works:

You write down all your important stuff, then you put the notepad in your pocket. 

THAT’S IT!  No hacking, no phishing, and you can take it with you when you go fishing. Totally portable!

Credit Card Fraud

So many ways for thieves to get your info.  They use skimmers to read your data. There is malware, web scams and picking through your trash.

Here is a security solution that will prevent all unauthorized use of you credit / debit cards – and this one is Free!  This solution is called “Cash.”

Cash is paper money and coins issued by the government.  You can use it to buy anything, and it is accepted everywhere.  Pay with Cash and never worry again about unauthorized access to your account.

Privacy

Facebook and other social network platforms gather your info – then what?  There is no way to predict who may have access and then misuse it.

Our final security solution is another Free one!  This will absolutely protect your info from misuse or attack on the internet.  You will still have the ability to pursue new relationships and maintain current friendships as you do with your current social media.

In fact, this solution goes even further! It enables an enhanced level of communication where you can see the individual in real time, and actually touch them!!!  It is called “Talking.”  You talk to the person, they answer you and (get this) they are right in the room with you!!!  Insane!

This is actually a very old concept that has been used successfully for thousands of years.  It is tried and proven – and it could work for you.

So there you have them, three great inexpensive / free solutions to the cyber threats we face.  Technology is the cause of the problem, and it may not be the cure.  With this article, we invite you to consider the following:

  1. You may not find the solution to every problem in your cell phone. I admit they are cool and do a lot – more every day.  But sometimes “old school” is better.  Try giving it a chance occasionally.
  2. You think all Bond People are boring? We’re not!  We love to use our knowledge and creativity to solve bonding problems. Our underwriting staff has many (many, many) years of contract surety expertise.  When you call needing a bid or performance bond up to $10 million, our greatest joy is to be the solution you were looking for.  Keep this number in your new $1.79 Notepad: 856-304-7348.

We are the national contract bond underwriting department for Great Midwest Insurance Company, a corporate surety with an A-8 rating.  We can help you solve your next contract surety need. KIS Surety 

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