How is suretyship different from more common lines of insurance?

In traditional insurance, the risk is transferred to the insurance company. In suretyship, the risk remains with the principal. The protection of the bond is for the obligee. In traditional insurance, the insurance company takes into consideration that a certain amount of the premium for the policy will be paid out in losses. In true suretyship, the premiums paid are "service fees" charged for the use of the surety company's financial backing and guarantee. In underwriting traditional insurance products, the goal is to "spread of risk." In suretyship, surety professionals view their underwriting as a form of credit, so the emphasis is on prequalification and selection.