The Annual Surety Review
Most contractors never meet their underwriter. They send statements through a producer once a year and receive a number back.
Contractors who hold a real annual meeting consistently get more capacity than their financials alone would support — not because underwriters are sentimental, but because an underwriter who understands your business can get comfortable with things the ratios cannot express.
One meeting a year. Two hours. It is the highest-return two hours in your bonding relationship.
Who runs it: the owner, with the CFO or controller. Your producer arranges it and attends. Do not send the producer alone.
When
Within 30 days of delivering your year-end financial statements — so roughly 90 to 120 days after your fiscal year end.
The order matters. They should have read the numbers before they walk in. The meeting is for the story around the numbers, not for the numbers themselves.
Where
Your office. Always offer this first.
An underwriter who visits sees the yard, the equipment, the office, the people, and whether the place runs well. That is a large part of what "character" and "capacity" mean in practice, and none of it survives a video call.
If they cannot travel, meet at their office. Video is the last option.
What to bring
Full document list in the annual surety meeting package. The core:
| Document | Why |
|---|---|
| Year-end financial statements | Already sent; bring copies |
| Current interim statements | Where you are now |
| Current WIP schedule | The most-read document in the room |
| Completed jobs, last 12 months, with bid vs actual gross profit | This is your credibility. See below. |
| Backlog schedule | Signed contracts, cost to complete, expected margins |
| Aged AR and AP | With explanations for anything over 90 days |
| Bond register | Every open bond, cost to complete, aggregate consumed |
| Org chart | With any changes since last year highlighted |
| Safety record | EMR trend, OSHA recordables |
| Bank line status | Amount, drawn, available, renewal date |
| Next 12 months' plan | Revenue target, pursuits, hires, capital spend |
| Your capacity ask | See below |
The bid-versus-actual schedule
If you bring one thing, bring this.
| Job | Bid GP % | GP % at 50% complete | Final GP % | Fade |
|---|---|---|---|---|
An underwriter's core anxiety is that your reported profit is not real. Percentage-of- completion accounting means your income statement is built on cost-to-complete estimates, and if those estimates drift, everything downstream — profit, retained earnings, net worth, working capital — is overstated.
A schedule showing that your jobs finish within a point or two of where you bid them and where you reported them at the halfway mark answers that anxiety directly and with evidence. It is worth more than any explanation you could give.
If your fade is bad, bring it anyway and bring the explanation and the fix. Discovered fade is much worse than disclosed fade. See how sureties read your financials.
The agenda
Two hours. Keep it moving.
| Time | Topic |
|---|---|
| 0:00–0:15 | The year in review. Revenue, margin, headcount, what changed. Three minutes of narrative, not a slide deck. |
| 0:15–0:35 | The financials. Walk the balance sheet and income statement. Address anything unusual before they ask. |
| 0:35–1:00 | The WIP. Job by job on anything material. Where the margins are, where the risk is, what is over or under billed and why. |
| 1:00–1:15 | Completed jobs and fade. The bid vs actual schedule. |
| 1:15–1:30 | Problems. Yours to raise, not theirs to find. |
| 1:30–1:45 | The plan. Next 12 months: revenue, market, people, equipment, and what could go wrong. |
| 1:45–2:00 | The ask. Capacity for the coming year. |
Then walk them through the yard.
Raise the problems yourself
The single highest-value thing you can do in this meeting.
Anything the underwriter would be unhappy to find later, you raise first:
- A job that is going badly
- A customer who is not paying
- A key person who left
- A loss year or a bad quarter
- A dispute or claim
- A covenant you tripped
- A change in ownership
Every experienced underwriter will tell you the same thing: they do not expect a perfect year. They expect to be told the truth. A contractor who brings their own bad news builds credit that is spendable later, when they really need flexibility.
The opposite is also true and much more expensive. A problem an underwriter discovers themselves — in the numbers, from the owner, from a claim — permanently changes how they read everything else you say.
Making the ask
End with a specific request, not a hint.
Bad: "We're hoping to grow next year."
Good: "We're targeting $34M next year, up from $27M. Our largest pursuit is a $9M facility for a repeat client where we did the $6M phase one. That would put us over our current $8M single limit. We're asking for $12M single and $30M aggregate. Our analyzed working capital is up $400K year over year, we've subordinated the officer loans, and here's the backlog that supports the aggregate number."
Then be quiet and let them respond.
Support the ask with the levers you actually pulled
| Lever | Say it out loud |
|---|---|
| Retained earnings | "We took no distributions beyond tax" |
| Subordinated officer debt | "The $400K owner loan is now subordinated on your form" |
| Cleaned-up balance sheet | "Affiliate receivable is repaid and gone" |
| Refinanced short-term debt | "Moved $300K off the line into a 5-year note" |
| Better statements | "First year on a review; audit next year" |
| Improved fade | "Fade went from 3.1% to 0.8%" |
| Continuity | "Buy-sell is now funded with key-person life" |
Each of these is something you did deliberately. Say so. An underwriter who sees a contractor managing their own credit profile treats them differently from one who is just reporting results.
After the meeting
Within one week:
- Send a thank-you with a written summary of what you committed to
- Send anything you promised to follow up on
- Confirm the capacity decision and the letter of authority expiration date in writing
Through the year:
- Send quarterly interims and WIP, unasked
- Send a short note on anything material as it happens
- Do the things you said you would do in the meeting
That last one is the whole game. Next year's meeting starts by comparing what you said to what happened. A contractor with a two-year record of doing what they said gets treated as a different class of risk.
If it goes badly
Sometimes the answer is no, or less than you asked for. Do not argue in the room.
Ask one question: "What specifically would need to change for this to be a yes?"
Get the answer in concrete terms — a working capital number, a fade number, a year of history, a completed job of a certain size. Then leave, build the plan around that answer, and come back with it done.
An underwriter who has told you what they need has given you something valuable. Most contractors never ask.
Prepare with: the annual surety meeting package, and run the surety readiness scorecard beforehand so you know what they are going to see.