b'LOSSES IN THEBONDING INDUSTRY The bonding industry experienced its worst year to date in 2018 with the industry incurring more in claims than the revenue they took in. Has the trend continued into 2019?By Brittany Nicolas,CAIB, ACSB | Surety Broker, Construction Services Group, AonIn 2018 the Canadian surety market faced a year oflenders will become increasingly important. Contractors may challenges. Direct written premium was surpassed by directalso face an upswing of project-specific concerns such as claims and the industry was rocked by a 105 per cent grossrequirements for cash flow projections, project breakdowns loss ratio (compared to a loss ratio of 8.7 per cent in 2017).and bonding back of subtrades. Significant changes and Ontario, Manitoba and Saskatchewan bore the brunt ofchallenges within your company should also be brought to the claims; however, the losses left the entire industry inthe brokers attention so issues can be addressed ahead of recovery mode.bond requests.Below is a chart illustrating the years results for ManitobaBy providing timely and quality financial information to your and Saskatchewan. The loss ratio for the prairies is a dismalsurety broker, contractors can mitigate the changing market 220 per cent, although, notably the losses were mostlyconditions. Although losses of this magnitude are unlikely to segregated to one bond company.repeat in 2019, there will be a watchful eye from the surety and reinsurance markets while they recover from the worst The surety and credit industries have responded byyear in the last quarter-century. indicating they will proceed more conservatively. In the coming months, we may see bond companies forced toBrittany Nicolas is a Surety Broker withadhere to stricter conditions dictated by their reinsurers.Aons Construction Services Group. She canConsidering that poor operational performance and heavybe reached at brittany.nicolas@aon.ca ordebt loads contributed to the bond claims, contractors can(204) 934-2736.expect that financial reporting to their bond company and MANITOBA & SASKATCHEWAN20182017 WRITTENWRITTENYEAR TOEARNEDINCURRED PREMIUMSPREMIUMSYEARPREMIUMSCLAIMS LOSS COMPANY ($ 000)($ 000) CHANGE($ 000) ($ 000) RATIO Western Surety$6,530 $7,058 -7% $6,632 $-7 0%Company Intact Insurance$4,238 $5,365 -21% $4,926 $-944 -19%Company The Guarantee$4,171 $4,517 -8% $4,164 $-705 -17%Company of North AmericaTravelers Group $4,113 $4,950 -17% $4,773 $79,668 1,669%Trisura$3,965 $3,290 21% $3,800 $574 15%Guarantee Insurance Company Others $10,895 $10,498 4% $11,632 $471 4%Industry Totals$33,912 $35,678 -5% $35,927 $79,057 220%(MB & SK)Issue 3FallEdition 2019 BUILD MANITOBA 43'