What do classic movies like “Pulp Fiction” and “Raiders of the Lost Ark” have in common with surety bonds?
The explanation is an adventure in itself.
“Pulp Fiction” tells the story (stories, in fact) of several characters all seeking one elusive item central to the plot, what storytellers call the MacGuffin: the object sought by many in a shared quest.
The Holy Grail. The Ark of the Covenant. Excalibur. The One Ring. While the details of the tale may change, the quest is where the narrative unfolds — and the journey to achieve the goal is far more important than the MacGuffin itself.
Which, naturally, brings us to surety.
What do we really do as a surety? How many of us can explain it in a three-minute elevator speech? Who is really the customer? Who can make a claim? What is the service we provide?
Often these questions aren’t easy to answer, in part because the details are not the same for every bond. Many agents can’t provide clear answers, nor could a few underwriters I have known over the years.
What we actually charge for is claims. We pay claims.
Yet we don’t just accept a claim and cut a check; we investigate. We mitigate damages to make claims smaller. Not just smaller for Old Republic — we mitigate damages to make the loss to our indemnitors smaller. We mitigate damages for the obligee by getting their project moving again after a default.
Think about how meaningful that is for an individual who has signed our indemnity agreement. They bet the roof over their head and their bank accounts that they could run a successful business, and they did. Until they couldn’t.
One of the things I learned during the years I spent handling claims was that contractors and other businesses experience challenges and issues every single week that could doom them. Yet they work through problems. They find solutions. They negotiate resolutions big and small.
We never know about those hurdles until the business encounters something insurmountable, an obstacle so beyond their control they can’t work through it on their own — and that is where our claims department comes in.
What Is Our Value Proposition?
To operate in surety claims, you have to possess a thorough understanding of the law. You need to understand negotiation and leverage. You have to be able to run the numbers. If you can’t run the numbers, you can’t understand the cost versus the benefit of the choices you make in handling a claim.
What's more, you must have a thick skin.
Perhaps the hardest part of the job is being a diplomat. When you arrive on the scene, everyone is already angry at each other — and you’re the one with the deep pocket they all want to access.
It is often said the next onerous bond form comes out of the last bad claim experience the obligee had with a surety. Ultimately, our claims department must make certain Old Republic Surety lives up to its obligations under the bond.
There are surety claim departments that will reserve their rights, do nothing and wait to see if they get sued. I am proud to say that we are not that company. We are proactive in handling claims.
Consider: If we can’t distinguish ourselves in a soft, ever-more-crowded and competitive market by crafting bond forms that can make us stand apart, how do we meaningfully compete? What is our true value proposition?
Simply, it’s the people we work with. It’s how we come together as a team. It’s how we follow through and deliver on our promises. It’s how we build trust with our agents and bond principals.
What are we selling? License bonds that keep businesses in business. Contract bonds allow contractors to bid and build projects.
In reality, what we sell is not bond forms. The bond form doesn’t matter in the sale we make, because everyone has the same bond.
Recall what I said about the MacGuffin. The Ark of the Covenant moves from a hidden, ancient tomb in Egypt to a secret government tomb in the U.S. We never learn the contents of the briefcase for which Vincent Vega and Jules Winnfield risk their lives.
Those objects are essential to the plot of the movie; the action revolves around them. Yet in and of themselves, they are not the entire story. Bonds are not truly what we sell.
We make things possible for our bond principals. We make it possible for them to pursue their business. What we sell is opportunity. I can think of nothing more positive and optimistic to sell than opportunity.
We work together as a team to sell that opportunity. That is what we do.
Just as all the swashbuckling and action, mystery and intrigue, dramatic dialogue and deeds draw the audience to those movies, it’s what we do and how we do it that sets us apart. It isn’t the bonds; it’s how we execute the process and follow the policies designed to provide a service and keep us profitable.
That’s what sets Old Republic apart.
In time, we will measure how far we’ve come in this collective mission. We will celebrate successes. We will learn from failures. For now, let’s pursue our goal with swashbuckling action, dramatic words and deeds. Let’s go out and sell opportunity with optimism and solid underwriting — all set to a rousing soundtrack.
