Bonds can secure and grow business profitability and build client trust, but they require a comprehensive understanding of the financial considerations of risk and uncertainty. Century-old The Miller Financial Group emphasizes knowledge of suretyship, empowering artisan contractors & construction firms with the agency’s knowledge to sort through balance sheets, profit, and loss statements, and working capital dynamics. A thorough analysis of these financial metrics enables the agency and their surety bond partners to assess the financial readiness of the surety bond applicant for a solution for their surety bonding, securing the guarantees needed when bidding for construction work in both the public and private sectors.
The Miller Financial Group, an insurance tradition established long ago in 1920 by Ray Miller Sr., and with his son Ray Miller Jr, who entered the Property and Casualty tradition upon returning from Germany after WWII, the agency witnessed a growing demand in serving the artisan trade contractor, as a result of Ray’s marriage to Mary Lou Kramer, in a large family with her 8 sisters and 2 brothers. Today, under the leadership of Gary, representing the 3rd Miller generation, and his daughter Annie, the insurance practice continues to set benchmarks in surety bonding and beyond, demonstrating stability and expertise in the finance and insurance industry.
A Surety Bond is an agreement among three parties, the principal (Contractor), the obligee (Public or Private Sector Project Owner), and the surety (An Insurance Co). The principal or contractor is required to purchase a surety bond from a Surety, to provide a financial guarantee in favor of the obligee, in the event of the failure of the contractor to complete the construction project promptly. The Miller Financial Group, as the agent for the surety, understands this discipline well. If the principal doesn’t adhere to the bond’s terms, the obligee can file a claim against the bond. If the principal cannot resolve the issue, the surety may need to identify an alternative contractor or construction firm to continue the project, guaranteeing the completion and faithful performance of the construction project. As included in the surety agreement, the principal will be required to indemnify the surety, having pledged their financial assets to make the surety whole.
The Miller Financial Group highlights the rigorous underwriting process for surety bonds, which focuses on an applicant’s financial health, construction experience, and stability, unlike conventional insurance. Applicants are required to disclose personal financial information and often pledge their homes and cash assets as collateral, highlighting the invasive nature of the process. “The surety market has been very strong for many years, however, there is an increasing demand to attend to an aging infrastructure within the United States,” says Mr. Gary Miller.
The US surety market experienced a 15.7% growth in direct written premium (DWP) in 2022, according to data from Maximize Market Research. In a landscape where profit margins are razor-thin and financial stability is paramount, The Miller Financial Group adopts a proactive approach to risk management. Brokers are tasked with quantifying downside risks, especially when extending bonding facilities to financially deficient organizations. By leveraging expertise and insights, The Miller Financial Group mitigates risks while identifying opportunities for growth and expansion.
Surety bonds are an unsecured form of contingent liability that can be beneficial for businesses deficit in capital. Recognizing that positive working capital is fundamental to surety bond approval, smaller new start-up companies may be unable to secure a surety bond in the traditional surety marketplace. The Small Business Association (SBA) has a significant role in providing an additional guarantee to the surety, thus enabling a small or start-up company to secure a surety bond. The Miller Financial Group is a certified SBA surety bond broker, as a result of our surety bond experience and being a certified Veteran Owned Small Business (VOSB).
A surety is particularly valuable for renewable energy companies to meet obligations related to decommissioning, interconnection, and power agreements. Real estate and private equity investment also benefit from suretyship. Even private equity investors can use surety bonds to add value to their investments by returning cash to the balance sheet or using contingent forms of liability surety bonds. This allows the investors to take on more projects, knowing their financial risk is protected and secured, which can significantly impact the short-term and long-term valuation of the investment.
“Over the years, we’ve evolved and adapted to the changing landscape and evolving industries, but we remain committed to our clients,” remarks Annie Miller Slavin, the fourth-generation leader of The Miller Financial Group. “As we embark on the next chapter of our journey, we carry forward the legacy of our predecessors – a legacy built on integrity, professionalism, empathy, and personalized service.”
