...Niche Specialty Lines Fidelity and surety are relatively small property/casualty (P/C) industry market segments that provide important economic functions. Surety mainly provides a third-party guarantee of performance or payment of contractual obligations. Fidelity protects against theft or dishonest acts from individuals or employees. Premium Growth Challenges Surety represents 1% of industry net written premiums and fidelity only 0.2%. Over the last five years, premium growth has been stunted in each line less than 1% on average in surety and 1% in fidelity, versus 3.4% for all lines. Slow economic growth and limited construction activity, particularly infrastructure- and government-related projects, have hindered surety growth. Consistent Underwriting Profitability Both surety and fidelity are traditionally high expense ratio, low loss ratio businesses that generate consistent underwriting profits. Market fears of large incurred losses from the 2008¡2009 recession did not materialize....
