Why choose an insurer for your deposits and guarantees?
Until recently banks in Belgium had a monopoly on issuing sureties and guarantees, today more and more specialized insurers are active on this market. For the latter, sureties and guarantees are part of their core business. However, insurers’ extensive expertise and adapted offer is still not sufficiently spread amongst companies on the market.
What are the advantages of an insurer as a specialist guarantor and guarantee provider opposite a bank? We'll list the 5 most important ones for you.
1. Your credit lines remain free
Sureties and guarantees are usually part of the short-term mixed lines of credit for a bank. Each guarantee therefore means a consumption of this line of credit. If you choose an insurer, your company will keep space free on the mixed lines of credit at the bank.
2. No hard guarantee needed
When a bank grants you a credit opening, you must provide collateral and covenants, including for sureties. That's not the case with an insurer. He relies only on the financial information about your business and the inherent risk associated with the specific warranty.
3. Specialized warranty managers
Your business banker advises you on a wide range of financial matters. One of them is sureties and guarantees. With an insurer, a specialized 'guarantee manager' is awaiting you with an expert advice, tailored to your specific need.
4. Bespoke sureties and guarantees
A bank usually offers standard bank guarantees 'at first request'. This means that it will have to pay cash immediately if the warranty is invoked. As a result, your company may be in a weaker position compared to the counterparty. An insurer's warranty manager helps you negotiate adjusted terms. He or she proactively points out the dangers of certain guarantee types and guides you in the preparation of 'balanced' warranty texts.
5. Performing technology and experienced specialists
Sureties and guarantees involve a lot of administration. Communication must be quick and punctual amongst all parties involved. For insurers, a specialized staff provides smooth administration, combined with having a dedicated software for the management of sureties.