The U.S. surety insurance market is experiencing one of its strongest periods in history, fueled by an unprecedented surge in infrastructure spending and a favorable claims environment. Major players including Travelers, CNA, Liberty Mutual, and specialty carriers such as RLI and Arch are reporting record combined ratios, premium growth, and profitability as the sector benefits from massive public and private construction activity.
Here are key visuals of U.S. infrastructure projects driving surety demand—highways, bridges, renewable energy, and data centers:
The primary catalyst is the Infrastructure Investment and Jobs Act (IIJA) of 2021, which continues to unleash billions in federal funding for transportation, broadband, water systems, and clean energy. Combined with private-sector investments in manufacturing (CHIPS Act), data centers (AI boom), and renewable energy, total U.S. construction spending hit new highs in 2025 and is projected to remain elevated through 2027–2028.
Surety insurers provide bid, performance, and payment bonds that guarantee project completion and payment to subcontractors. With more large-scale projects, demand for these bonds has soared—premiums grew 12–18% year-over-year in 2025 for many carriers, according to industry reports.
Record Profitability Drivers
- Low Loss Ratios: Surety claims remain historically low (often 20–35 cents on the dollar), thanks to rigorous underwriting, contractor pre-qualification, and fewer contractor failures during the post-pandemic boom.
- High Combined Ratios: Many surety lines are posting combined ratios in the 60–75% range—among the best in property-casualty insurance—leading to exceptional underwriting profitability.
- Capacity Expansion: Carriers have increased risk appetite, with some adding new underwriting authority and teams to capture market share.
- Rate Stability: Despite strong demand, rates have remained relatively flat or only modestly up, allowing for robust top-line growth without pricing pressure.
Here are infographics illustrating the surety market’s profitability trends and infrastructure spending growth:
Industry experts expect the momentum to continue into 2026–2027, though some caution that rising interest rates, labor shortages, supply chain volatility, and potential slowdowns in federal funding could eventually temper the cycle. For now, however, surety insurers are riding the infrastructure wave to what many describe as record profitability.
This performance stands in contrast to other P&C lines facing elevated catastrophe losses or social inflation pressures, making surety one of the brightest spots in the insurance landscape today.