OVERVIEW
Surety bonds are needed by many businesses for transactions with the public and wider public sector. Until recently, issuing a surety bond was a financial product offered almost exclusively by banks.
In international business, guarantees issued by insurers are common practice. While such bonds in Greece have traditionally been issued almost entirely by banks, the original publication states that insurers issue 25% of surety bonds worldwide, representing more than €900 billion in guaranteed capital.
Karavias Underwriting Agency introduced surety insurance through an innovative micro-underwriting product, opening a new market for insurance intermediaries through a process different from traditional procedures.
MAIN TYPES OF SURETY BONDS
Karavias Underwriting Agency can arrange surety insurance for businesses, covering the main forms of surety bond.
| Bid / Tender | Ensures that the successful bidder submits the required supporting documents on time and enters into the contract at the offered price. |
| Advance Payment | Ensures that an advance paid to a contractor undertaking a project is returned to the project owner if the project is not completed or the contract is not performed. |
| Performance | Protects the beneficiary against financial loss if the contractor fails to comply with the terms and conditions of the contract. |
| Maintenance / Good Operation | Ensures that the contractor can fulfil the maintenance obligations arising from the contract and protects the beneficiary against financial loss if those obligations are not met. |
| Payment | Ensures that the contractor pays specified suppliers of materials and services connected with the project. It protects a supplier against potential loss resulting from the insured’s failure to meet its obligations. |
Under surety insurance, a business is insured for a specified period and amount. The insurer agrees to pay the beneficiary if the insured business cannot meet the obligations it has undertaken.
Businesses of any legal form with a Greek tax identification number may apply to Karavias Underwriting Agency for a surety bond, subject to underwriting. The bond is accompanied by an insurance policy.
The following business sectors may be eligible for surety insurance:
- Food and beverage manufacturing
- Pharmaceuticals and medical devices
- Tourism
- Construction companies
- Waste-management companies renewing their licences
- Renewable energy companies
- Subsidised projects and businesses meeting an own-contribution requirement
- Businesses granted public movable or immovable property by TAIPED or another competent public body, including hotels, campsites, ports and airports
SURETY INSURANCE WITH INTERNATIONAL CAPABILITY
This product was developed by combining the experience and financial strength of three established organisations. Karavias Underwriting Agency works with Altius Insurance as insurer and ARCH RE as reinsurer.
ALTIUS INSURANCE LTD
Based in Cyprus, Altius operates in life, health and general insurance. Its solvency ratio reached 210% in 2020.
ARCH RE
ARCH RE is part of ARCH Group, with total gross written premiums of €11.1 billion, strong capital and earnings. The group operates internationally and is recognised as a specialist insurer and reinsurer.
Ratings: A+ / A+ / A2 / A+ from AM Best / Fitch / Moody’s / S&P.
INFORMATION MATERIAL
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