Record Gain Spurs
Price Competition

Signs clearly point to a turn in the hard cycle, with prices beginning to show slight moderation.

A nine-month net gain on underwriting—the industry’s first in at least 19 years—the length of time the Insurance Services Office (ISO) has been keeping tabs, has spurred a very modest turn in the hard cycle and a return to at least mild price competition between insurers.

According to the ISO, the U.S. property/casualty insurance industry’s net income after taxes rose 28.3%, to $26.7 billion, in the first nine months of 2004 from $20.8 billion in the first nine months of 2003.

ISO and the Property Casualty Insurers Association of America (PCI) also noted that the industry’s surplus, or statutory net worth, reflecting the growth in income, increased $22 billion, or 6.3%, to $369 billion at the end of September 2004, compared with $347 billion at year-end 2003,

Were it not for inflation adjustment, the property casualty industry’s surplus as of Sept. 30, 2004 would have been a record. Adjusted, the surplus stood 5.2% below its inflation-adjusted peak of $389.1 billion on June 30, 1998.

ISO noted that the industry’s strong results drove the increases in insurers’ net income and surplus insurers earned $2.8 billion in net gains on underwriting through nine months despite major hurricane losses. Prior to 2004, insurers suffered net losses on underwriting during the first nine months of every year since at least 1986, when the ISO began keeping records.

The combined ratio—a key measure of losses and other underwriting expenses per dollar of premium—improved 2.4 percentage points, to 97.9%, through nine months of 2004, from 100.3% through nine-months 2003. At 97.9%, the combined ratio for nine months of 2004 was also the best nine-month performance in 19 years.

According to the PCI, increases in investment income and realized capital gains also contributed to the growth in insurers’ net income and surplus. Through nine months of 2004, net investment income—primarily dividends from stocks and interest on bonds—grew 3.9%, to $28.7 billion, from $27.7 billion in the same period of 2003.

Insurers realized $6.5 billion in capital gains on investments in the first nine months of 2004, up from $5.6 billion in the previous nine months. Surplus also benefited from $1 billion in unrealized capital gains not included in income.

The above figures are consolidated estimates for all private property/casualty insurers, based on reports accounting for 96% of all business written by private U.S. property/casualty insurers.

INCREASING RATE OF RETURN

ISO notes that the industry’s annualized rate of return on average surplus rose to 9.9% for the first nine months of 2004, compared with 9.2% for the like period in 2003. The annualized rate of return through nine months has bounced back from a low of -1.1% for nine months of 2001 to its highest level since the 10% annualized return for nine months of 1998.

Lorna Parsons, managing director of the Construction Industry Group for Schinnerer & Co., says, “This is a time when carriers should be focusing on profitability. Instead, the market is moving into a competitive mode, using rate to build volume.”

The view that insurance is a cyclical business is borne out by ISO data that shows that the actual rate of changes on renewals for commercial insurance policies turned positive in mid-1999 and gained momentum through July 2002 when it peaked at 12.9%. Since then, rate changes on renewals have dwindled to just 3.1% in June 2004—less than a quarter of what they were at their peak.

Parsons suggests that 2005 should be a flat year for rates. Instead, she says, “We are beginning to see rate softening for professional liability.” She notes, however, that general liability continues to be a challenge for some contractors, particularly in problem areas of the country.

“Insurers are providing better deals for contractors with lower losses,” says Bill McIntyre IV, chairman, American Contractors Insurance Group. “There’s a definite softening across the board. The trend among some insurers is to drop the worst 20% of their accounts—the ones that represent 40% of their losses—and improve pricing on the remaining accounts.”

McIntyre says that contractors who have failed to manage their losses are being squeezed with higher rates. “This makes it difficult to compete with their counterparts who have improved their loss ratios and are being rewarded by insurers with lower rates,” he says. “We’re in a stable rate environment right now for good contractors. Contractors prefer stable rates, particularly when they are at levels that are seen to be fair.”

Steven D. Davis, director of construction risk services, McGriff Seibels & Williams, agrees, pointing out that “contractors with excellent safety programs in place and a history of good losses are beginning to see a definite easing of rates.”

Some see great variation in rate setting between the various lines. “Our read on the property and casualty market is that it is spotty,” says Henry Nozko, Jr., president, ACSTAR Insurance Co. “In some lines, we’re seeing loosening of pricing. In other segments, tightening continues.”

On a note of optimism, Nozko described the situation for contractors who have controlled their losses. “We are seeing the beginnings of a back-off in rates for general liability. Maybe 5% for accounts with good histories. Overall, rates are moderate and there is a distinct flattening in pricing,” he says.

Commenting on the geo/tech part of the market, Dave Coduto, president and CEO of Terra Insurance says, “There has been a bit of softening. While it may appear that the cycle has turned, this may well be a short-lived illusion. The insurance industry is making its same old mistakes: Large carriers, in particular, are competing on price again. Invariably, this leads to losses and eventual hardening.”

Focusing on architects and engineers’ professional liability, Grant Weaver president and CEO, RA&MCO says, “Rates remain adequate.”

Professional liability is an area that is running countercyclical to much of the rest of the market. Nozko points to the fact that rates remained relatively soft, even over the past four years when the rest of the market hardened. “Now, we’re seeing price increases in the face of some very serious losses that have been racked up. I would say that firms can expect to see increases in 2005, probably in the 10 to 20% range,” he says.

Bearing out the views of those who see an easing market are figures released by the Council of Insurance Agents and Brokers that reveal commercial insurance prices fell an average of 5.9% for accounts of all sizes. Also pointing to softening in insurance markets is the spread between written premium growth and GDP growth. That spread has turned negative, with premium growth through nine months of 2004 falling 2.2 percentage points short of the 6.7% increase in GDP versus year-ago levels. This is in contrast to premium growth that exceeded GDP growth by 5.2 percentage points for the same period in 2003.

SEVERE CATASTROPHE LOSSES

ISO notes that results for insurers would have been substantially better were it not for steep casualty losses racked up by four hurricanes in the third quarter. Allowing for losses covered by residual market mechanisms, the Florida Hurricane Catastrophe Fund and foreign reinsurers, private U.S. insurers suffered an estimated $10.3 billion to $12.3 billion in net losses from the third-quarter hurricanes.

Overall net loss and loss adjustment expenses increased $6.9 billion, or 3.2%, to $223.7 billion in nine-months 2004 from $216.8 billion in nine-months 2003. ISO estimates that U.S. insurers’ 2004 net loss (nine-month) and loss adjustment expenses after reinsurance recoveries included $14.5 billion to $16.5 billion in catastrophe losses. On a direct basis before recoveries from foreign reinsurers and the Florida Hurricane Catastrophe Fund, overall catastrophe losses including those covered by residual market mechanisms rose $15.6 billion, or 151.9%, to $25.8 billion in nine-months 2004 from $10.2 billion in nine-months 2003. According to ISO, the $25.8 billion in direct catastrophe losses during nine-months 2004 compares with an average of $9.3 billion during the first nine months of each of the 10 years from 1994 to 2003.

THE BOTTOM LINE

Pre-tax operating income—the sum of gains or losses on underwriting, net investment income and other miscellaneous income—climbed $9.4 billion, or 42.9%, to $31.2 billion through nine months of 2004 from $21.8 billion through nine months of 2003. Improvement in underwriting results accounts for much of the increase in operating income, with the $2.8 billion in net gains on underwriting in nine months of 2004 constituting an $8.7 billion positive swing from the $5.9 billion in net losses on underwriting in nine-months 2003. Net investment income increased $1.1 billion to $28.7 billion in nine-months 2004 from $27.7 billion in nine-months 2003. Other miscellaneous income dropped to negative $381 million in nine-months 2004 from $14 million in nine-months 2003.

In terms of net investment gains—the sum of net investment income and realized capital gains (losses)—there was a rise of $1.9 billion, or 5.8%, to $35.2 billion in nine-months 2004 from $33.3 billion in nine-months 2003.

Insurers’ net income after taxes rose $5.9 billion, or 28.3%, to $26.7 billion in nine-months 2004 from $20.8 billion in nine-months 2003.

The net gain on underwriting in nine-months 2004 amounts to 0.9% of the $307.1 billion in premiums earned during the period. The net gain on underwriting through nine-months 2004 contrasts with a net loss on underwriting through nine-months 2003 amounting to 2% of the $287.4 billion in premiums earned during the period.

Underwriting results improved even though premium growth slowed. Written premiums climbed $13.8 billion to $321.2 billion in nine-months 2004 from $307.5 billion in nine-months 2003. Written premium growth, however, slowed to 4.5% in nine-months 2004 from 9.7% in nine-months 2003. Earned premiums rose $19.8 billion to $307.1 billion in nine-months 2004 from $287.4 billion in nine-months 2003, even though earned premium growth slowed to 6.9% in nine months of 2004 from 11.1% in nine-months 2003.

THE RESIDENTIAL MESS

Participants at the 2005 Insurance Roundtable were unanimous in characterizing the situation in residential—in particular, condominiums—as having reached crisis proportions.

Steven D. Davis of the brokerage firm McGriff Seibels & Williams says, “Very few carriers are willing to entertain programs for contractors who are heavily involved in residential projects such as condominiums. The central problem is the completed operations’ exposure on construction defects claims. A select few underwriters are willing to provide coverage for contractors who have 20 – 25T of their total work in residential, but there is very little capacity in the market for contractors who perform most of their volume in residential construction. It is a situation that’s ‘brain damaging’ for both contractors and insurance brokers, and I don’t see much market relief at this time.”

For contractors heavily involved in condominium work, obtaining needed coverage or even getting renewals can be difficult and problematic.
“The good news for contractors involved in condominium projects is rate increases,” Nozko says. “The bad news is when they receive no quotes at all from carriers. California and the Southwest are crisis areas. Florida is problematic. And we’re seeing it spread into other parts of the East.”

McIntyre voices his surprise. “A lot of people, including me, thought the high level of activity in residential would abate,” he says. “But that doesn’t seem to be happening. In fact, some areas such as mixed-use projects are very strong.”

According to McIntyre, some insurers are imposing onerous exclusions for residential projects. “Some are lumping dormitories and hospitals into the mix. Some simply are not writing this kind of coverage. Others are charging an arm and a leg for stripped-down policies and requiring contractors to take on large retentions of up to $2 million,” he says.

The high cost of coverage for residential work is posing a serious problem for the creation of badly needed affordable housing in the U.S. “It’s hard to build when contractors and owners have to contend with sky-high rates,” says Parsons. She underscores the fact that for insurance carriers, residential, generates more claims per dollar of premium than any other line.

According to Nozko, the impact of high rates has reached the point where a condominium that might have cost $300,000 may now have to be priced at $400,000. “Even at these high rates, there are not a lot of companies writing coverage,” he says.

Davis says that “in many cases contractors heavily involved in residential construction approach the excess and surplus lines market. But that can be a very costly solution and the coverage terms are almost always more restrictive.”

McIntyre notes that “some contractors are refusing condominium projects without liability coverage that derives from the structure of the project to the time that the statute of repose expires.”

Condominiums continue to be problematic, particularly in the West and Southwest. “It’s all about the quality of construction and how condo owners view their rights,” says Weaver. “From the perspective of most insurance companies, condominium work is not a favored activity. In the end, though, the attitude of most insurers has to do with the quality of the clients the design firm is dealing with and the claims history of the architect or engineer.”

Weaver urges architects and engineers to engage in careful client selection and focus on high quality builders. He says this is the best way for A& E firms to minimize their problems. “It’s important to keep in mind that all clients are not equal,” he says. Actually, that’s true for whatever market segment you work in.”

Holding out a bit of hope for the future, Peter Arkley, managing principal/CEO, Aon Construction Services Group, says, “Aon hopes to have a facility in place this year to provide better ways to meet the needs in the residential/multifamily market.”

Residential is certainly not the only part of industry where problems are starting to show up.

Schinnerer’s Parsons notes that green design and LEEDs certification are areas where potential difficulties could crop up. She suggests that they may pose an emerging problem for design professions.

“Claims can originate from unmet client expectations,” Parsons says. “Design professionals need to make clear to clients what they can realistically expect in the way of savings. It’s a big mistake to oversell and create expectations that cannot be met. Also important is the timing. Are those savings that won’t show up in the first year but will kick in during the second or third?

“The new International Building Code is also creating problems. It’s a performance code, which is very different from old style prescriptive codes,” she adds.

“Sometimes we feel like we’re throwing cold water on many of the best new ideas. That’s not our intention. It’s important to understand the limits of what you are selling and make them clear to your prospects. If you do anything less, you’ll end up not sleeping at night.”

Coduto also sees other traps for design professionals. “Clients are once again pressing them to acquiesce to bad contract language, pricing concessions and higher insurance limits,” he says. “At the same time, most carriers appear to be turning their backs on the market realities of the design professionals, while continuing to push higher limits at prices that won’t cover losses in the long term.”

Turning to workers compensation, “Rates movement is very uneven—down in some states, up in others. Generally, though, we see increases in the cost per man-hour,” Davis notes. “But the real factor governing the cost to the contractor is the use of best practices in claims handling.”

“There is a much lower incidence of litigation when top management gets on the phone with workers and lets them know that the company is doing whatever is necessary to get them back to work,” he adds. “The last thing you want is workers sitting home in front of the television, feeling neglected and watching commercials from lawyers who are promising them big settlements. A little communications can go a long way. Unfortunately, the vast majority of contractors fail to do this one thing effectively.”

A major problem out there, particularly for subcontractors, according to McIntyre, is additional insured endorsements. “The insurance industry is using endorsements that limit coverage for the up-stream parties—the general contractors and owners. The response from most large contractors is that they will continue to require forms 2010, issue date (85). What we have is a game of chicken. My contractors are adamant about getting the 2010 endorsement and are providing it to our owners. If subcontractors can’t work within that, our people will be using contractor-controlled insurance programs (CCIPs).

“Many subcontractors don’t like CCIPs or their owner-controlled equivalents, OCIPs. There have been administrative and coverage problems with both in the past. Both types of wraps tend to reduce the buying power of subcontractors when they go out into the market to acquire their own coverage.

“The question right now: Will the general contractors stick to their guns as they lose some subs?”

Speaking out on an issue of concern to the entire industry, McIntyre says, “Ethics is a major area of discussion. The recent scandal has caused people to look again at how insurance companies pay agents and brokers and how agents and brokers charge their clients. At the end of the day, there will be some restructuring of disclosure and compensation.”

Looking at a bumpy road ahead, Bill Marino, CEO, Allied North America, says, “The insurance industry continues to struggle with the issue of profitability. It needs a couple of years of positive returns. Adequate pricing and the necessary underwriting discipline will ultimately yield more favorable loss results.”

The surety industry, and the contractors it serves, has suffered for a number of years from a shortage of capacity. In 2004, the industry saw the entrance of some new capital into the marketplace and greater availability. Even so, the changes have been moderate.

Arkley suggests that the surety market has opened up a bit after a couple of difficult supply years. “I sense that there is a greater comfort level out there concerning rates,” he says.

Arkley notes, however, that “the major theme among sureties right now is to limit risk.”

Terry Cavanaugh, COO, Chubb Surety, says that the industry is strong and rebuilding its capacity. “There’s plenty of capacity for all but the very largest accounts. Co-surety has become the standard for this end of the market, particularly contractors in the ENR Top 50. The system spreads risk for the surety and ensures availability for even the largest projects.”

Noting the sheer size of today’s mega projects, Marino points out, “Contractors frequently need to enter into joint ventures to handle these huge undertakings. Using a co-surety structure allows surety companies to accomplish the same objective of spreading risk over a larger capital base.

“In certain situations, mega project owners have had to accept bonds written in amounts less than 100% of the underlying construction contract’s value. Two examples include McCormick Place and Cal Trans, both of which required acts of legislature. Some governmental entities are not willing to support the necessary legislative initiatives resulting in larger projects being fragmented into smaller components. As the surety industry heals itself, solutions will be found to address this issue.”

The surety market has become very narrow at the top, with only a handful of companies having the capacity to make a major impact on very large projects.

Terry F. Lukow, executive vice president, St. Paul Travelers Bond Construction Services, says, “There are really only three major players who have committed significant capacity to the large contractor market—Chubb, St. Paul Travelers and Zurich. Another two or three companies add capacity to the market, but not in the size and scale of the three above-mentioned.”

In fact, the price of entry into co-surety deals appears to be declining.

Tim Mikolajewski, vice president of contract surety at Safeco, says, “It used to be that sureties couldn’t get into co-surety unless they were able to commit $250 million to $350 million. Now you can partner in the co-surety market with $100 million to $150 million—about half of what it used to be.”

A number of participants in the round table suggest that consolidation will continue within the industry.

According to Lukow, “Few surety companies have their own capital structure. Usually they are part of large insurance companies and use an allocated portion of the company’s overall capital base. What we are seeing now is that consolidation s the surety industry is being driven by consolidation of the property and casualty industry.”

Cavanaugh predicts that “over the next five years, we’re likely to see continued consolidation in the surety industry. This, no doubt, will affect the top surety companies who control the majority of the business.”

It appears that co-surety adds complexity for contractors, but that most are able to get the bonds they need. Bill Cheatham, president of surety, Zurich in the United States, says, “In fact, co-surety is really a business strategy—not unlike a joint venture.”

Mikolajewski says, “From the standpoint of contractors, the challenge of co-surety is to bring two, three or even four companies up to speed on their underwriting issues. All sureties have different ways of doing business. But the problem of rationalizing the deal across a number of partners is not a burden for contractors. While approving a large deal may take a bit longer than if one surety was involved, all underwriting issues ultimately get resolved by the various sureties.”

Cavanaugh notes that “contractors need to grapple with stronger, disciplined underwriting. It can be particularly challenging for accounts that need to use co-surety and therefore have to satisfy more than one surety company. A professional surety broker is an essential partner in these cases.”

Cheatham points out that “capacity has restricted in the surety market. The catalyst is the weakening of the underwriting discipline. Contractors used to operate on higher ratios of working capital to equity. What we’ve seen is widespread dilution of underwriting discipline.”

Moving from the top tier of large projects into the middle and smaller markets, the surety environment is quite different.

Marino identifies some softening in the insurance marketplace. Describing the middle and small markets, he says, “There are more players operating in both the small and middle markets. You see more carriers interested in quality business and a greater level of receptivity to the offering of terms and conditions that they may not have considered a year ago.”

“There is really no problem for mid-range firms that have been building their balance sheets and consistently making money,” says Mikolajewski. “The really important thing is that contractors need to recognize and stay within their job parameters.

Actually, middle-market companies are the most heavily targeted by sureties. While there are many players in this segment of the market, Arkley notes that “only about 10 or 12 account for the bulk of the business.”

Contractors that have a strong financial base will have a couple of sureties interested in doing business with them.

Seeing little or no change in the level of middle-market competition, Lukow says, “It’s still very competitive. The primary driver is the availability of reinsurance for this part of the market.”

Lukow says that at the small end of the market there are “as many or more competitors as in the past. While pricing and underwriting terms in the small contractor market have changed over the past 24 months, they have not, in my view, materially changed.”

Mikolajewski sees plenty of capacity at the small end of the market under $10 million. “What we are seeing, though, is some escalation in the number of losses among smaller contractors.”

Noting that it doesn’t take a lot of capital to compete in the small contractor end of the market, Cheatham says, “Sureties operating in that part of the market need to be consultants, and not just focused on top line.”

Cheatham notes that probable maximum loss statistics are higher at the smaller contractor level. “Unfortunately, there continues to be an excess capacity that dilutes the underwriting discipline and doesn’t bring added value to market. Our industry is allowing itself to continue to treat the product as a commodity in the small and mid-market levels.”

Seeing a problem area for smaller accounts, Aon’s Arkley says, “There is a growing pressure to present a strong balance sheet. If you are not well funded, you may have serious problems getting the bonds you need.”

There are signals that underwriting is returning to a more stringent approach. Cavanaugh sees “a growing demand to understand the contractor’s operations beyond what is on the balance sheet. Underwriters want to know how contractors control risk at all levels, including better knowledge of owners and subcontractors. There is also a need to understand the depth and quality of second-tier management.”

In line with tightening underwriting, there are also requirements for stronger indemnity. According to Cavanaugh, “For larger accounts that means access to the assets of the parent entity. For smaller accounts it often means personal indemnity.”

Looking forward to the year ahead, Lukow notes that “the surety industry just turned profitable last year. But that may be temporary. It has already moved to a heightened competitive posture.”

Notes Cavanaugh, “Instead of the generic pricing that used to be the norm in surety bonds, we are now seeing pricing based on contract terms, size and duration of the project. There is a recognition that surety is a credit instrument and that the farther out you go, the more you need to charge.”

Lukow points out that the industry has moved past the Enron, Kmart and WorldCom era. “Right now the commercial side of surety is performing much better than the contract side. In effect, the commercial side is now subsidizing the contract side.”

Predicting that it will continue to be difficult for contractors to have unfettered access to adequate surety capacity, Nozko points to the fact that “direct losses increased 22% for the six months ending June 30, 2004 compared to the same period in 2003. There was only a 4% increase in earned premium and the combined ratio was well in excess of 100%. We need to see these numbers settle down if surety capacity is to continue to be plentiful.”

Each participant in the 2005 Insurance Roundtable has contributed thoughts, insights and suggestions for coping with the current environment and looking out into the year ahead.

“Whether you’re a contractor, architect or engineer, look back on your coverage for the past 10 years. If you’ve had more than three companies, it may be that you are not picking well. Pick a horse with staying power and stick with it. Build your relationship. Saving a few dollars in premiums this year may look good, but it can cost you big time if there is a difficult period down the road.”
—Henry Nozko, Jr.
President, ACSTAR Insurance Company

“It’s important for the industry to find ways of responding to the requirements of clients and owners, even when they present multi-dimensional challenges. If we fail, the market will find other means of meeting their defined needs. As brokers, our job is to produce results.”
—Bill Marino
CEO, Allied North America

"We’re in an insurance market where buyers need to continue looking at their options and continue to be proactive in reducing losses. There is no doubt at all that safer contractors are getting substantially lower rates."
—Bill McIntyre IV
Chairman, American Contractors Insurance Group

“There is a strong theme in the market to move away from simple price consideration. Accounts recognize that neither insurance nor surety bonds are commodity products. Increasingly, buyers recognize the value of professional claims handling, the implementation of safety programs and the stability of the underwriter. There is a growing demand for brokers to put together programs tailored to the specific needs of the account. This is not a ‘one size fits all’ world.”
—Peter Arkley
Managing Principal/CEO, Aon Construction Services Group

“The surety industry has made strong advances over the past couple of years. As a result, we are seeing stable pricing and capacity at levels that are fair to everyone. Contractors can look forward to an environment in which their sureties serve them as valued partners.”
—Terry Cavanaugh
Chief Operating Officer, Chubb Surety

“When it comes to insurance, risk transfer involves just 20 - 30% of the ultimate costs. When you take control over losses, you also take control of your premiums. What you do this year can determine your cost for years to come.”
—Steven D. Davis
Dir. of Construction Risk Services, McGriff Seibels & Williams

“Whatever else you do, pick your clients with care. Equally important, deal through a knowledgeable, experienced broker who knows how to put together the insurance program that gives you the right coverages, terms and price.”
—Grant Weaver,
President & CEO, RA&MCO

“Invest in your surety relationship. Do not treat it as a transaction. Understand the dynamics of your surety partners and make them, wherever possible, partners in your strategic business plan.”
—Terry F. Lukow
Executive VP, St. Paul Travelers Bond, Construction Services

“The construction economy seems to be holding up pretty well. One of the big questions still out there is the Federal Highway Bill. Dept. of Transportation funding in some states, such as California, remains problematic. The state has borrowed dedicated DOT money to help with their huge overall state budget deficit. While that money will eventually be paid back to the DOT, right now it is impacting the state’s contractors and putting a crimp in highway work and projects such as the Bay Bridge.

“Bottom line, the outlook for the next three to five years is pretty good. For contractors and sureties who stay focused, there are opportunities for growth.”
—Tim Mikolajewski
Vice President Contract Surety, Safeco

“We tell our design professionals to protect themselves in their residential assignments. For openers, we suggest they select the clients carefully—work for owners who have a reputation for doing the job right. Then limit your firm to those clients who are willing to pay reasonable prices for your services. Finally, we suggest strongly that design firms require contracts that call for construction phase services.”
—Lorna Parsons
Managing Director, Construction Industry Group, Schinnerer & Co.

“You get what you pay for. Buyers need to focus on the long term stability of the insurance carrier as opposed to price. It’s a good idea to build up a relationship with a carrier that is going to be there in the long term.”
—Dave Coduto
President and CEO, Terra Insurance

“What concerns me is that there is a false sense of comfort out there concerning availability of surety capacity for small and mid-sized accounts. If the failure rate increases, it could impact the confidence of the reinsurers at that level of the market. As an industry we have to maintain profitability long term on all customer size levels or the product becomes vulnerable.”
—Bill Cheatham
President of Surety, Zurich in the U.S.