The bonds we write for the coal industry are reclamation bonds, which guarantee that if the operator becomes bankrupt and fails to reclaim the property (by returning it to its original condition), Argo Surety will become the responsible party to fund such reclamation. The same goes for the oil and gas sector, where we will step up to properly plug and abandon (P&A) the site if the energy company fails to do so.
Sureties should already work with partners that reclaim mines as they go (concurrent reclamation) and are not wholly dependent on leaving the process up to the surety company at the end. This will be even more important as the Biden administration’s policies begin to take effect. Companies that are unable to meet requirements expose themselves and their coverage providers to unattractive risks.
At the same time, Argo Surety is increasing writings on renewables as that market continues to expand. There is significant new business in the solar, wind, hydro and geothermal spaces. We anticipate a boom in those sectors with the new administration’s support and are prepared to meet those surety needs in our industry outlook.
Prepare for changes to happen quickly and aggressively
Anytime one party controls the White House and both houses of Congress, it’s the best chance for that group to successfully push through their agenda. That means changes are likely to take place quickly, be more aggressive (especially if an opposing agenda was in place during the previous administration) and even trickle down to the state level in some cases.
We can anticipate some things that are likely to happen during the Biden administration based on his campaign rhetoric, the prior roles held by his new appointees, and possible interest in pursuing “unfinished business” from the Obama administration.
Insurers must be aware how changes could affect the industries they cover and be prepared to respond as quickly as they occur.
Argo Surety targets all types of industries, including construction, manufacturing, transportation, energy, waste management, mining, technology, retail, public utilities and healthcare. Learn more.