3.3.7.6Vertical

Surety & Bonding

Carriers and programs providing contract surety bonds for construction projects, commercial surety bonds for licensing and court requirements, and fidelity and crime bonds protecting businesses against employee dishonesty and theft.

Market snapshot

These figures describe Specialty & Surplus Lines Insurance (3.3.7), the segment that Surety & Bonding sits within. They are not figures for Surety & Bonding on its own.

Market size
~$25B
Growth
~9.7%CAGR (2017–22, nominal)
Companies
~472 firms
Firms by employee count

82.2% of firms have fewer than 20 employees: 388 micro-businesses, below most mandates.

The investable universe84 firms with 20+ employees
20–99
3440%
100–499
1113%
500+
3946%

The fastest-growing insurance segment: surplus-lines and specialty underwriters writing cyber, D&O, marine, environmental, and other hard-to-place risks outside the admitted market. Emerging risks (cyber), hardening rates, and the migration of business from admitted to E&S markets drive it, and the MGA/MGU model of delegated underwriting backed by carrier capacity has fueled explosive growth and deal activity. Much of the broader E&S and MGA economy is also captured under brokerage.

NAICS 524128. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

Business model & economics

Revenue model

Specialty premiums and MGA underwriting/commission income

Key economics

Revenue per firm
$53,655,284
Revenue per employee
$704,028
Employees per firm
68.9
Recurring revenue
Moderate–High

renewing specialty programs

EBITDA margin
Strong for MGAs; combined-ratio for carriers
Capex intensity
Low

Characteristics

  • Scale-driven: payroll is only 13% of revenue, so the cost base is assets, not headcount
  • Moderate strategic-buyer pool: 39 firms exceed 500 employees, so a scaled asset has buyers, but not many
  • Fastest-growing insurance segment.
  • Emerging risks (cyber) and hardening rates drive growth.
  • MGA/MGU delegated-underwriting model expanding rapidly.

NAICS 524128. U.S. Census Bureau, 2022 Statistics of U.S. Businesses; U.S. Census Bureau, 2022 Economic Census.

M&A deal context

Deal activityHigh

Who’s acquiring

  • Specialty carriers & MGAs
  • Brokerage & program consolidators
  • PE-backed underwriting platforms

What’s driving deals

  • Explosive MGA/MGU growth and acquisition.
  • Migration of business to E&S markets.
  • Emerging-risk (cyber) demand.

Find Surety & Bonding acquisition targets

Search Acquisera’s index for companies classified under Surety & Bonding (3.3.7.6) and build a targeted deal pipeline.

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