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4/2/2020
1
Risk Rewarded
COVID-19 and Surety Considerations
CSDZ Construction Practice
Virtual Townhall Series
Risk Rewarded
CSDZ Townhall Moderators
Joshua R. Loftis
Sr. Vice President, Surety
Bob Bowman
Surety Underwriting Manager
Colby White
Surety Operations Manager
Brian Oestreich
VP, Client Executive
4/2/2020
2
Risk Rewarded.
Participating in the Virtual Townhall
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Risk Rewarded
This is a Human Problem
Organizational Wellbeing
Finding Alignment
Seeking Answers Together
Welcome & Opening Thoughts
4/2/2020
3
Risk Rewarded
Contracts & Supply Chain
• Force Majeure
• Substitutions
Financial
• Overhead
• Liquidity / Borrowing resources
COVID-19 Specific Inquiries
• Impacts and action plans
• Upstream and downstream risk
COVID-19 Surety Discussions
Risk Rewarded
Portfolio Management
Reinsurance Dynamics
Understand How You are Evaluated –
Credit Scoring & Evaluation
Corporate Capital Allocation –Surety and Other Lines of Insurance
Surety Behind the Scenes
4/2/2020
4
Risk Rewarded
What’s Our Strategic Plan Now?
Risk Rewarded
What’s Our Strategic Plan Now?
4/2/2020
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Risk Rewarded
We can improve visibility of change with
increased measurement and communication
We can control our preparation with Scenario
Planning that models:
• Backlog Delay Sensitivity
• Overhead Decisions
• Cashflows
We can proactively prepare for liquidity
shortfalls – talk to your Bank about adequacy
of current program and the CARES Act
What Can We Control?
Risk Rewarded
Lean into your Work-In-Process for Financial Modeling
• Accuracy and Frequency of Backlog Metrics from the Field
• Predictability of Project Delay or Shutdown
• Timeliness of Monthly Financial Reporting
Consider how you measure Revenue Acquisition
• Define the horizon for overhead decisions and outlook for 2021
Can you Shift Fixed Costs to Variable Expenses
• Start with Allocation Related Costs
• Example: Owned vs Rented Equipment
• Example: Variable Compensation for Business Development
Strategic Planning Considerations
4/2/2020
6
Risk Rewarded
We Are Building Tools To Help
Risk Rewarded
Focus on the problems you can solve
Cut the fat first
Economic Uncertainty
"A bad economy does not
cause businesses to go
broke, but it does expose the
weak ones." ~ Warren Buffett
4/2/2020
7
Risk Rewarded
Coming into 2020
Balance sheets and backlogs are
strong
Early project starts
Ample project opportunities
Acquisition opportunities
Economic Uncertainty –
Creates Opportunity
Risk Rewarded
Incredibly low interest rates
CARES Act
Fresh Pool of new Potential Hires
Stick to your process
Refine Company Culture / Purpose
Economic Uncertainty –
Creates Opportunity
4/2/2020
8
Sandra Engstrum Sarah Dragt
Lin Ulven
Rachel Thomas
Tina Domask
Mel Bloddget
Emily White
Nicole Stillings
Colby WhiteNate Weaver
Nick EtzelKurt Lundblad
Josh Loftis
Brian Oestreich
Bob Bowman Ted Jorgensen
CSDZ Surety Team
Roger Frank
Risk Rewarded
Virtual Townhall Series
4/2/2020
9
Risk Rewarded.
You Can Find Additional Information
on our website (www.csdz.com)
We have created a COVID-19 resource tab
Thank you
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