RE: RE: word of caution to LT investors Hey indexer:
According to the reports Surety represents a very small portion of the business written by jevco. no material impact financially.
In surety you can write a small amount of premium but still have a lot of exposure. To give you an example, Jevco in 2009 (sorry for the outdated figures) wrote just under 16M$ of surety premiums in Quebec (I don't have the figures for the rest of the provinces). In surety, if we ballpark the net premium at 5.00$ per every 1000$ of contract price, this means that Jevco's exposure on 16M$ of premium is about 3.2 billion dollars. In contract surety, you are underwriting a small amount of contracts compared to P&C or personnal insurance. You can have 50M$ exposure on 1 single contract. So, if you don't stick to good underwriting it can really hurt when things start to go bad.