Core Specialty enters contract surety market following American Surety acquisition

Core Specialty Insurance Holdings and its subsidiaries have announced the expansion of its surety offerings by entering the contract surety market.

The firm’s new Surety division, part of its Bond, Credit & Guarantee subsegment, was established on November 1, 2023. American Surety Company became a subsidiary of Core Specialty on May 31, 2024.

Following the acquisition, AM Best upgraded American Surety’s Financial Strength Rating to A and its Financial Size Category to XIII. The company also received an expanded underwriting limit of $46 million from the Department of Treasury.

As of June 30, 2024, American Surety’s surplus has increased to $461 million. With these improved financial metrics, Core Specialty is optimistic about future opportunities in the surety market.

Additionally, Core Specialty has entered into a program management agreement with Distinguished Programs Insurance Brokerage LLC to offer customised contract bonding solutions for businesses across various industries.

The program, led by Trevor Hash, will begin underwriting in the fourth quarter of this year. American Surety Company will be the bond issuing carrier and will service claims.

Jeff Consolino, Founder, President, and CEO of Core Specialty, stated, “Following our announcement of the acquisition of American Surety Company, these accomplishments support our intention to become a significant factor in the surety marketplace under the leadership of Tim Martin.”

He added, “According to AM Best market data, the surety market included approximately $10 billion in direct premiums written in 2023 and produced a 10-year average combined ratio of 71%. We continue to believe that the surety market represents a highly attractive segment for us to enter given its strong underwriting profitability over time and barriers to entry, and our entry into the contract surety market is in support of that belief. With the expertise and industry relationships present with Tim and with Trevor and his team, we are pleased to add contract surety to our Surety Division’s current product offerings.”

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