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PRESS RELEASE

Surety Bonds in Europe

London, 17 September 2020 – A new series of research reports covering Belgium, France, Germany, Italy, Poland, Spain, Switzerland and the UK establishes that, across those eight European countries, the market for surety bonds and related guarantees was worth as much as EUR 6.92 billion in 2019. Finaccord’s reports show that this market grew at an annual rate of 3.0% between 2015 and 2019.
 
“Worth over EUR 2.72 billion in revenues in 2019, the most valuable of these eight markets is the German one”, commented Enzo Guzzi, Consultant at Finaccord and co-author of the series. “This was more than France and Italy, the second and third biggest markets, combined.”
 
Another finding of this research is that surety bonds issued by insurance companies have been gaining share versus bank guarantees. Enzo Guzzi continued, “in most European countries, insurers have gained share from banks and they accounted for about EUR 2.20 billion or 32% of the market in 2019. However, banks still issue the majority of guarantees. Among insurers, Finaccord believes that the leading providers by gross written premiums are Euler Hermes and R+V: the first is a market leader because it is active in multiple countries, while the latter has a dominant position in Germany”.
 
Looking at the insurance market in particular, Finaccord’s research suggests that this market is mostly dominated by brokers and that their main clients are small companies with revenues below EUR 10 million. Finaccord also believes that most surety bonds sold in Europe are either performance bonds or bid bonds, although advance payment bonds make up the largest part of the market in some countries.
 
Enzo Guzzi also commented on the future of the surety market in the wake of the COVID-19 pandemic: “Finaccord expects the market for surety bonds to be severely hit by current economic conditions, especially as the construction sector is usually the most important buyer of surety bonds. Any recession is likely to hit construction activity, while at the same time making it more important that customers are protected through this form of insurance. As a result, premiums for surety bonds are forecast to rebound to about EUR 6.94 billion by 2023, which would mean that the market may take three years to recover its pre-COVID-19 levels”.
 
 
Media contact: David Parry, dparry@finaccord.com
 
Notes to editors:
 
Finaccord is a market research, publishing and consulting company specialising in financial services that is a part of Aon Global Operations SE (Singapore Branch), a part of Aon plc (NYSE: AON). It provides its clients with insight into and information about major issues in financial services around the world, with a particular focus on marketing and distribution topics such as affinity marketing, bancassurance and strategic alliances, as well as commercial lines insurance.