The US surety market is working well for primary carriers but much less so for their reinsurers, and that tension will shape the January 1 renewals, according to Willis Re.
In its October market view on credit, surety and political risk, the reinsurance broker said US surety primary carriers continue to post direct loss ratios that remain low by historical standards. Reinsurers have had a different experience. Excess of loss structures expose them less to steady attritional profit, and more to the large contractor and project defaults of the past five to ten years.
Primary writers have raised their retentions, but the largest losses have been big enough to break through them, Willis Re said, so reinsurers have absorbed much of the recent volatility. The broker expects that disconnect to persist while megaprojects, including data centers, concentrate jumbo bond limits on a small number of contractors.
Recent losses show the pattern. The Pine Gate Renewables Chapter 11 filing in November 2025 affected around $1.85 billion of surety bonds and surety-backed letters of credit across several sureties, according to Moody’s.
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