Barriers to Modernization in Surety: The Maintenance Trap

The Surety industry stands at a crossroads. Leaders universally recognize that digital transformation is no longer optional. Modernization is essential to remaining competitive over the years to come. Yet when Everest Group surveyed the industry for Surety Outlook 2025: Tech & Ops Benchmarks, they uncovered a troubling reality: most firms are investing heavily in technology while falling further behind.

The reason? They're pouring resources into the wrong place.

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The survey reveals where technology investments succeed—and where they stall. One finding stands out: how Surety players allocate their technology budgets can have major effects on their business outcomes.

The Budget Allocation Problem

While the Surety industry acknowledges the need for digital transformation, execution often lags behind ambition. Many brokers and carriers spend the majority of their technology resources maintaining legacy systems, rather than pursuing modernization. This creates several challenges:

Legacy systems are often inadequate for modern Surety operations, forcing team members to employ manual workarounds and use a patchwork of tools to get their work done—wasting valuable time in the process.

Additionally, maintaining old systems ties up money and IT staff that could otherwise fund meaningful modernization, including advanced tools, integrated data platforms, predictive analytics, and workflow automation.

Lastly, when a Surety business spends most of its technology budget maintaining a legacy system, it creates a vicious cycle—and a perception that technology is a money pit rather than a growth enabler. Often, this inertia stems not just from cost, but from comfort: teams are used to doing things a certain way and hesitate to disrupt familiar processes, even when modernization would drive efficiency and scale.

Key Findings:

• Brokers typically operate with a patchwork of modern tools layered on top of manual processes: only 22% report having an integrated platform.
• Carriers are more likely than brokers to report having integrated platforms, but many still underinvest in modernization, with some allocating less than 3% of Surety revenue to technology.
• Some players view technology as a cost center, rather than a strategic investment, which is a primary barrier to progress.

Breaking Free

To achieve meaningful technological improvement—and the efficiency gains that come with it—Surety players must redirect spending from maintaining outdated systems to investing in integration-first solutions that automate core workflows. It’s easy to get stuck maintaining a legacy system that only does part of the job, but the cost of staying put is now measurable.

The survey data makes the case clear: among contract-heavy carriers, top performers are roughly twice as efficient as the median—processing 2× more bonds per FTE and operating with about half the staffing per $10 million in premium.
Quantifying these outcomes gives leaders a tangible business case for modernization—turning technology from a maintenance expense into a measurable driver of productivity and profit.

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