In an interview with Brief, SoEasy Insurance CEO Yiannis Nicolaou sheds light on a relatively new product for the Cypriot market – Surety Bonds, or “Insurance Guarantees.” He explains how this innovative financial tool offers companies the freedom to participate in public tenders and execute projects without tying up capital, and why it may soon become a preferred alternative to bank guarantees for many local enterprises.
The CEO of SoEasy Insurance discusses the advantages of Surety Bonds over traditional banking solutions and the opportunities they create for Cypriot businesses.
Mr. Nicolaou, Insurance Guarantees remain a relatively unfamiliar product in the Cypriot market. What exactly are they, and why did you decide to include them in your portfolio?
At SoEasy Insurance, recognizing how vital liquidity is for every business and wanting to differentiate ourselves in the market, we introduced Insurance Guarantees – internationally known as Surety Bonds – to our range of products. It’s a global market expected to exceed 20 billion dollars by 2025. The main difference from traditional bank guarantees is that there’s no capital commitment involved. Through our partnership with AXERIA, a French insurance company belonging to the ARCH Group, we offer businesses engaged in public works the ability to participate in tenders and undertake projects while maintaining their liquidity.
You mentioned liquidity and capital commitment several times. How important is this in practice for a business?
When a company secures a bank guarantee, it often has to tie up an equivalent amount in a fixed deposit or provide other collateral. That means funds that could otherwise be used to buy equipment, pay suppliers, or participate in more tenders remain locked. With Insurance Guarantees, businesses can free up those funds and reduce their dependency on banks. At the end of the day, every company’s goal is growth and profitability – and this product is a key tool for achieving just that.
What kind of businesses can benefit from this type of insurance?
While the product can be used by many types of businesses requiring guarantees, one of the main sectors is construction – companies undertaking public works. It’s also ideal for public sector suppliers, waste management firms, customs-approved warehouse operators, and companies providing professional services. All these categories can boost their competitiveness through this solution.
What requirements must a business meet to obtain a guarantee through an insurance company?
Based on our experience, we’ve established specific criteria. The company must have at least three years of operation and audited financial statements for at least two years. It should be profitable and have positive equity. We also assess staff experience, equipment adequacy, and project delivery history. Additionally, we pay close attention to the company’s market reputation – including its conduct towards subcontractors and suppliers – as this is a strong indicator of reliability.
What types of guarantees can you provide?
Through AXERIA, we offer a complete range of guarantees, including bid bonds, performance bonds, advance payment guarantees, maintenance bonds, and guarantees for the Customs Department and the Energy Regulatory Authority. It’s worth noting that we’ve already issued guarantees for major organizations such as the Public Works Department, OKYPY, and the Ministry of Education – a clear sign of the market’s growing trust in the product.
The evaluation process sounds quite thorough. How do you ensure it’s both comprehensive and efficient?
Our process is based on three key pillars. First, the financial analysis of the company through audited statements. Second, the evaluation of suitability and experience in its specific sector. Third, an assessment of the company’s reputation and character in the market. Our constant goal is to maintain a balance between protecting the insurer and providing businesses with fast and reliable solutions.
Many entrepreneurs may wonder, is it worth the cost?
The cost of an insurance-based guarantee is slightly higher than a bank guarantee but remains comparable. The crucial factor is the overall benefit. When you free up funds that would otherwise be tied down, you can invest in equipment, stock, or participate in multiple tenders simultaneously. Believing in win-win partnerships, we see that the overall return far outweighs the initial cost of the guarantee.
AXERIA isn’t the only international company offering Surety Bonds. Why did you choose to work with them?
AXERIA has thirty years of experience in business insurance with specialization in multi-risk coverage and holds an A- rating from AM Best. It’s part of the global ARCH Group, with which we’ve maintained an excellent collaboration for four years. This trusted relationship has given us access to a strong portfolio of guarantee products tailored to the Cypriot market. That’s why today we can offer reliable solutions that don’t require capital commitment.
What are your immediate priorities regarding this product?
Educating the market remains our top priority. Through our regular SoEasy Insurance Seminars, we inform our network’s insurance advisors about the potential of Insurance Guarantees. We also plan to host events directly for business owners. Our goal is to establish this product as a trusted and recognized alternative for Cypriot companies that want to grow without unnecessary financial constraints.