5 September 2025

UK Surety Market Shows Signs of Recovery After £1bn Losses

The Surety Market remains cautious following significant claims and losses from insolvencies in the construction market in recent years including ISG, Buckingham, Henry and Readie. To put it in perspective, the Surety Market in the UK writes around GBP200m of Gross Written Premium (GWP) annually which includes bonds for all sectors including construction. However, the losses suffered by the UK Surety Market in 2022 and 2023 were believed to be in the region of GBP1bn, although some of this relates to large oil and gas projects.

These losses have prompted the Surety market and their reinsurers to tighten their underwriting and reduce their available capacity. Some Sureties including QBE and First have even withdrawn from the market altogether. This has resulted in the following outcomes:

  • Some contractors are now struggling to get bonds or are finding terms for their facilities changing significantly.
  • Response times from Sureties is taking much longer as they are now more diligent. The level of information they now require has also increased significantly.
  • Sureties are far more diligent on their bond wordings which now takes longer to review.
  • An increasing number of bonds are now released at Practical Completion rather than Making Good Defects.
  • Contractors are demonstrating stronger negotiating positions, successfully securing a 5% bond instead of a 10% bond.
  • Sureties are tightening up their counter indemnities.

That said, there is a growing appetite in the market driven by strong order books with only a few legacy problems remaining, which are typically related to fixed price contracts that were affected by inflation.

Furthermore, there are new Sureties entering in the market. Companies such as Advent have recently joined with another market participant due to enter in September and a further entrant rumoured in the next 6-9 months, which would assist with capacity.

While Sureties remain cautious, they are beginning to recover the losses made over the last few years and are showing more optimism, indicating the gradual market recovery. Sureties are more frequently requesting and utilising Facultative Reinsurance with one another more to effectively manage their capacity and share risk exposure.

For further information, please contact our specialist team.

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Nichola Blaney

Development Executive, Construction UK

+447767441808

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