In the past decade, EuroCaution has established itself as an insurance and reinsurance broker specialising in underwriting sureties, loans and various financial losses. To mark its 10th anniversary, the company has decided to breathe new life into its surety brokerage services and develop its products aimed at small and medium-sized enterprises. Alessandro Rizzo, CEO, and Cédric Doppagne, CCO, tell us more.
What does security brokerage at EuroCaution involve?
AR: EuroCaution has three business areas. Firstly, we have our own financial insurance guarantee products, then reinsurance brokerage services aimed at the companies themselves and, finally, insurance brokerage for firms. In this final area, our role is to analyse the applicant’s needs, understand all the guarantees it needs in the short, medium and long term, and negotiate the implementation of a framework contract, in other words a series of surety lines that it can use depending on what it needs, with a sufficient number of insurers.
What objectives have you set yourselves in this area?
CD: We are very well known among our clients in Belgium and Luxembourg for our financial performance guarantee services, infrastructure guarantee services and so on. The actual brokerage part, specialising in the risks underwritten for the construction and property development sector, represents a business area that, while perhaps not as well known, is expanding rapidly. Applications from companies are growing by the day. They are looking for performance, advance payment and sometimes even environmental guarantees. All these options allow firms, on the one hand, not to have to call on their banks or encumber their traditional credit lines and, on the other hand, to avoid tying up or monopolising money. Indeed, if the company has to set aside 5 or 10% of an amount linked to a project, then it is doing nothing with this money. However, if an insurer guarantees this type of performance instead, it will be able to use its financial resources much more efficiently. All this is part of our business, and the idea is to continue developing it to reach companies that have large investment capacities, as well as those with more modest resources.
“Our approach is really about making life easier for clients.”
AR: Currently, with us or elsewhere, the brokerage service is limited to clients with a high turnover, since insurers require minimum commitments for using annual lines. The advantage of working with an operator such as EuroCaution is that, on the one hand, when we see that a product is missing from the range of small and medium sureties, we create it. On the other hand, we can really advise large groups, which need far more substantial guarantees, in their search for a global solution.
Does the digitisation of your services support this business sector?
AR: Absolutely. EuroCaution’s strength resides in its digital platform, which allows clients to have a single entry point for all the types of product they are looking for. They no longer have to contact the various companies out there and ask them to issue the guarantee. They can now log onto our platform, find out all the options available to them and simply take out the product they want directly, via a single tool.
CD: Our approach is really about making life easier for clients. We are not about “stand alone”, in other words working to find a single guarantee for an applicant. Our added value is based on the fact that we have a discussion with our client, we want to find out its needs, and then we discuss it with the insurers so that the applicant always has a price and a surety or guarantee line policy that matches its requirements and needs.
What challenges remain in terms of refining your platform?
CD: While it is already operational for large firms, we have a lot of smaller clients without a specific solution, except for what their banks have to offer. Banks are by no means unaware of this and, as a result, client applications sometimes entail a significant cost which can, in some cases, impact their traditional financing capacities.
Today, a client that needs a guarantee of 50,000, 100,000 or even 200,000 euros cannot get help unless it makes a turnover of several million euros per year… except for from its bank. We are therefore developing a model that can provide the solutions it needs. We are developing a tool digitally by incorporating it into our existing platform in order to simplify procedures and thus reduce response times.
AR: The major challenge in terms of developing the platform is the digital onboarding of the client, enabling firms to benefit from our products with the least possible human interfacing. It is important to understand that if we receive an application for a guarantee of 50,000 euros tomorrow, we cannot carry out a whole series of processes manually because this would be far too time-consuming. It is essential to cut down on waiting times by limiting human involvement by digitally automating certain procedures. This represents the final step in our project and is already at a very advanced stage, as all we have left to do is carry out the testing phase on the platform. Clearly, the surety brokerage product for SMEs will be launched by the end of the year.
Interview by Pauline Paquet – LG Magazine April 2022