Monday, March 22, 2010

Bail Bonds: The Importance of Collections in the Post Lehman World

In an effort to provide valuable information to our family of bail bond agents around the country, we are constantly scanning the financial environment to look at trends and identify issues that could be important to our industry. Since the “great recession” began in 2008, one area of particular interest to AIA and its family of agents is the issue of collections on bail bond premiums and forfeitures.

Due to a declining real estate market and high unemployment, the availability of cash for all large retail transactions has shrunk compared to the period prior to 2008. The impact of this lack of liquidity has been felt by bail agents throughout the country who are trying to provide a valuable service to the criminal justice system and their clients yet are confronted with indemnitors who do not have the adequate funds to pay for the premiums due on bail bonds. AIA is exploring ways to help our agents improve their collection systems in instances where they are owed money either for premium or costs relating to forfeitures on bail bonds.

One example of the importance of speedy recovery on accounts receivable is some information we discovered when looking at the National Collection and Credit Risk Conference currently being held in Miami, Florida. According to the people running this conference, the numbers of credit issuers (e.g. Banks and other lenders and providers of credit) who have signed up to attend this conference far exceed the number of collection agencies. This phenomenon is a clear indication of the emphasis that issuers of credit are placing on how to assess the risk of lending in today’s economy to speed up their recovery in 2010.

As I have said before in this bail bond industry blog; effective underwriting and the thorough assessment of an indemnitor’s ability to pay on credit extended coupled with solid collections practices at the retail level are going to be key drivers of success in the future for bail bond agencies. This is true not only for bail bond agencies, but for all retail operations that provide credit to their customers and clients. At AIA, we are continuing to explore ways that we can help our family of bail agents improve their collection processes. You should be on the lookout for these innovative changes to be announced sometime in 2010.

As always, I encourage your comments or questions regarding this bail bond industry blog.


  1. As an outgoing IFIC employee, It's a shame I hadn't discovered this site earlier. You seem to have a thorough understanding of the industry and markets in general. Keep up the good work.

  2. In this is post....I know about the importance of bail bond ...Its so interesting to learn more and more....we are all eagerely waiting for your next post as soon..


  3. It is good to find out that sites like this exist in the internet. It is so informative and really a great help to people.

  4. You are the most thorough surety company out there. I've heard nothing but good things about you guys from numerous Las Vegas bail bonds companies. One that comes to mind of the top is Hero Bail Bonds in Las Vegas.