The trade credit insurance market is growing fast, projected to reach $13.34 billion in 2025, up 9.3% from 2024. This growth is driven by rising insolvencies (40% increase in the U.S. last year) and economic uncertainty. Businesses are turning to trade credit insurance to protect cash flow, reduce risks of non-payment, and secure financing.
Key points:
- Market Growth: Expected to hit $19.25 billion by 2029, with a CAGR of 9.6%.
- Economic Factors: Higher bankruptcy rates and a 7.5% prime rate are increasing demand.
- Technology Impact: AI and digital tools streamline underwriting, claims, and fraud detection.
- Geopolitical Influence: Tariffs and trade tensions are reshaping global commerce.
- New Opportunities: SMEs and sustainability-focused businesses are finding tailored solutions.
For businesses, adopting trade credit insurance now can safeguard finances, unlock credit lines, and mitigate risks in an unpredictable economy.
Credit Insurance in Challenging Market Conditions | SCHUMANN Conference 2024
Economic and Market Factors Affecting 2025
As we move through 2025, businesses are grappling with growing economic uncertainty. This turbulence is pushing many to turn to trade credit insurance as a safeguard against mounting financial risks.
Economic Uncertainty and Business Risks
With the prime rate sitting at 7.5%, borrowing has become more expensive, and tighter lending conditions are adding pressure. Coupled with inflation and fluctuating interest rates, businesses are experiencing extended payment terms and a higher likelihood of payment defaults. These challenges are driving a surge in demand for trade credit insurance, as companies look to shield themselves from the risk of non-payment.
While domestic financial pressures remain significant, the global stage is no less complicated. Geopolitical tensions are adding another layer of uncertainty to international trade.
Geopolitical Issues and Their Impact
International political dynamics are reshaping trade risks in ways that are hard to ignore. In 2025, tariff measures have pushed the average effective U.S. tariff rate to over 20% – a level not seen since the early 1900s. This has put a strain on global commerce, with Atradius forecasting global trade growth to hover at just 2.5% for both 2025 and 2026. The impact is clear: heightened trade tensions are eroding business confidence and curbing investment.
"The time for extra trading ahead of tariffs that can push up trade figures temporarily has hardly been there. It’s been a dizzying start to 2025 for importers and exporters."
– John Lorié, Chief Economist at Atradius
Geopolitical instability is also wreaking havoc on supply chains. Production disruptions, damaged infrastructure, and rerouted shipping lanes are lengthening transit times and driving up costs. Many firms are being forced to reevaluate long-standing trade relationships. On top of this, rising tensions are accelerating technological decoupling, which is fragmenting global tech supply chains and raising costs across various industries.
"Heightened risks around the economy, geopolitics, and the changing climate are creating an incredibly complex operating environment unlike any other organizations have experienced in decades. Those that build on their ability to comprehend, assess, and mitigate the risks facing their operations will likely be better positioned to identify opportunities where others may only see ambiguity and gain a competitive edge in these uncertain times."
– Robert Perry, Global Political Risks & Structured Credit Leader, Marsh Specialty
This challenging landscape is fueling increased demand for short-term export credit insurance, especially in the first half of 2025. Businesses are seeking this protection as they face rising risks of bad debts and insolvencies, underscoring the need for robust risk management strategies in an unpredictable world.
Technology Changes in Trade Credit Insurance
The trade credit insurance industry is in the midst of a digital transformation that’s making it more accessible and efficient. With the global trade credit insurance market expected to grow from $13.7 billion in 2024 to $25.3 billion by 2033, technology is a driving force behind this expansion. This shift is paving the way for AI tools and cutting-edge insurance products that are reshaping how trade credit insurance operates.
Digital Policy Management and AI Tools
Artificial intelligence is revolutionizing how insurers evaluate risk and handle claims. In fact, 76% of U.S. insurance companies are already using generative AI in at least one area of their operations, with claims processing, customer service, and distribution being the most common applications.
Take underwriting as an example. Companies like Atradius utilize AI to process an impressive 20,000 credit applications daily, managing €780 billion in trade credit lines. Etihad Credit Insurance (ECI) showcased the potential of AI in January 2025, using it to assess buyer risk across multiple markets. By analyzing both structured and unstructured data, ECI employed real-time analytics to identify trends and predict possible payment defaults. Their models draw on data from over 400 million buyers worldwide.
"AI’s strength lies in its ability to transform vast amounts of high-quality data into variable output for a given purpose – whether that is classification (i.e. decision), generation (e.g., text generation), or something else." – André Düsing, Senior Manager Corporate Strategy, Atradius
One of AI’s standout abilities is its capacity to process unstructured data – like news articles and annual reports – that traditional systems often struggle to handle. This enables insurers to identify emerging risks more quickly and make precise evaluations. Additionally, AI-powered chatbots are improving customer interactions by delivering instant policy information, while automated systems are verifying data and detecting fraud. This is especially important given that fraudulent property and casualty claims cost $122 billion annually, accounting for 10% of such claims.
These advancements in AI are a natural extension of the industry’s broader digital transformation.
New Insurance Products and Solutions
Technology is also enabling the creation of entirely new insurance products tailored to meet the evolving needs of modern businesses. Composable ecosystems are replacing outdated monolithic platforms, allowing insurers to offer flexible, customizable solutions that can adapt without major disruptions.
Digital platforms now provide faster coverage options, competitive pricing, and tailored solutions. However, nearly 70% of insurers cite legacy systems as their biggest technological hurdle, which is accelerating the move toward more agile, adaptable platforms.
No-code and low-code tools are empowering employees to roll out new workflows and make system changes without needing IT support. This speeds up product innovation, enabling insurers to respond to market demands more quickly and create customized solutions for specific industries or risk profiles.
AI is also playing a critical role in fraud detection. The market for AI-driven anti-fraud technologies is projected to grow from $4 billion in 2023 to $32 billion by 2032. These tools, combined with advanced data analytics, are helping insurers identify and prevent fraudulent claims before they cause financial damage.
"AI is central to the transformation efforts across underwriting and reinsurance while ensuring compliance. AI enables insurers to analyze vast amounts of data to make more accurate risk assessments and streamline operations by automating tasks." – Jake Sloan, Vice President, Global Insurance, at Appian
The rise of the Managing General Agent (MGA) model is another trend reshaping the industry. Technology is lowering barriers to entry, encouraging more specialized insurers to develop niche products tailored to specific business sectors.
For businesses looking to take advantage of these advancements, partnering with insurers who use modern, specialized platforms is key. These insurers combine cutting-edge technology with deep expertise, ensuring that businesses are well-equipped to manage risk and safeguard their operations in an increasingly complex global market. As technology continues to evolve, such partnerships will be essential for staying ahead.
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Market Competition and Key Players
The trade credit insurance market has undergone a dramatic transformation over the last 25 years. Once dominated by just three major players, it has grown to include over 20 private short-term credit insurers competing for market share. This growth has created a lively and competitive environment, offering businesses more options for coverage. With trends shifting and digital advancements playing a major role, competition in the industry has only intensified.
Despite the increase in competitors, the market is still heavily concentrated at the top. Three dominant groups control nearly 85% of the global credit insurance market, with their operations primarily centered in Western Europe. These leading players include Allianz Trade, AIG, Coface, Atradius, and FCIA. Beyond these giants, other notable participants in the broader credit risk transfer market include names like Markel, Chubb, QBE, TMHCC, Zurich, Mercury, Cartan, and Liberty.
The market’s strong financial performance has drawn new investment and inspired new entrants, particularly through the Managing General Agent (MGA) model, which has gained popularity for its flexibility and efficiency.
Major Companies and Industry Changes
To stay competitive, leading insurers are making substantial investments in technology and developing new products. For instance, in September 2023, Coface introduced an innovative Application Programming Interfaces (API) portal aimed at financial directors and credit managers. This portal includes 26 API products for trade credit insurance and access to Coface’s extensive database, covering over 188 million companies. Such advancements highlight how insurers are embracing technology to meet evolving customer demands.
Competitive pricing strategies are another key feature of the current market. Despite a noticeable rise in claims – both in numbers and amounts – insurers are keeping pricing attractive to draw in new clients. Financial institutions are also reshaping the competitive landscape by using trade credit insurance to improve their financing capabilities and strengthen their market positions.
Providers are focusing on industries where risk and opportunity intersect. Sectors like retail, automotive, and metals have become focal points, with insurers tailoring their products to address the specific challenges these industries face.
Provider Feature Comparison
As technology and competition reshape the trade credit insurance market, providers are differentiating themselves in unique ways. While the core protection features remain consistent, differences emerge in areas like technology integration, coverage flexibility, and specialized services.
| Provider Category | Technology Features | Coverage Specialization | Key Differentiators |
|---|---|---|---|
| Major Global Insurers | Advanced AI underwriting, API integration, digital policy management | Broad global coverage, multi-sector expertise | Extensive buyer databases, global networks, proven expertise |
| Regional Specialists | Targeted digital tools, streamlined workflows | Industry-specific coverage, local expertise | Quick decision-making, tailored service, competitive pricing |
| MGA Model Providers | Agile platforms, customizable solutions | Niche market focus, specialized risk profiles | Flexible terms, innovative products, fast market adaptation |
The competition highlights the unique strengths of different providers. Established insurers rely on their extensive historical data and advanced digital platforms to deliver sophisticated AI-driven solutions. Meanwhile, newer entrants focus on agility, leveraging modern technology to quickly adapt to market demands. This creates a landscape where businesses can choose from a variety of options, each offering distinct advantages while maintaining similar core protections.
For businesses, the challenge lies in identifying which provider aligns best with their industry, geographic presence, and risk management goals. With more choices available, careful evaluation is essential to finding the right fit. As competition continues to evolve, the opportunities for businesses to benefit from advanced solutions and tailored offerings will only expand.
Future Predictions and New Opportunities
The trade credit insurance market is on a fast track for growth, driven by the increasing complexity of global trade and a rising awareness of the need for robust risk management. As economic uncertainties linger and technological advancements reshape the industry, both insurers and businesses are finding new avenues for growth and collaboration.
Expected Market Growth Through 2029
Research indicates that the trade credit insurance market is set to grow significantly. By 2029, it’s projected to hit $19.25 billion, growing at a compound annual growth rate (CAGR) of 9.6%. Broader estimates suggest the global credit insurance market could reach $29.92 billion by 2032, with a similar CAGR of 9.52%.
Several factors are fueling this upward trend. Global trade volatility has underscored the risks of extending credit, especially during uncertain economic times. Post-pandemic, many companies that previously operated without credit insurance are recognizing its role in stabilizing cash flow and supporting growth. Supply chain resilience has also become a top priority, pushing businesses to seek insurance solutions that cover disruptions across their operations.
The rise of digital trade finance is another key driver. As more transactions shift online and cross-border trade becomes increasingly digital, there’s a growing need for advanced risk assessment tools and protection mechanisms. Additionally, new market entrants are broadening coverage options and introducing competitive pricing, making credit insurance more accessible to businesses of all sizes.
"Despite challenging macroeconomic conditions, market conditions for new insureds remain favorable." – WTW
Economic uncertainties and geopolitical shifts are also sustaining demand for credit protection. The intricate nature of international trade relationships, combined with evolving regulations, ensures that businesses continue to seek comprehensive solutions. These trends are paving the way for opportunities in previously underserved markets.
Business Opportunities in New Markets
As the risk landscape shifts and digital tools become more sophisticated, new markets are opening up for both insurers and businesses. Tailored credit solutions are enabling companies to expand domestically and internationally with greater confidence.
In the U.S., the credit insurance market shows significant potential due to its historically lower adoption rates compared to Europe. Recent geopolitical changes, including new tariffs, are reshaping demand. For instance, increased domestic production driven by tariffs could heighten the need for credit insurance to support reshored manufacturing operations. This creates a space for insurers to develop specialized products tailored to emerging supply chain needs.
Canada is also demonstrating strong growth potential. Allianz Trade reported a 59% increase in its Canadian insurance pipeline since March 2025, reflecting heightened concerns over trade disruptions. David Dienesch, CEO of Allianz Trade in North America, highlighted the sector-specific impacts:
"Our new business premium is up 20% year over year. Food and transportation are getting hit hard. And with tariffs in place for steel, aluminum, and auto sectors, those industries are especially exposed."
The insured exposure in Canada grew by 7.5% in 2024, reaching a record €3.5 trillion. This trend shows that businesses are not only purchasing more coverage but also increasing their coverage limits, signaling growing confidence in credit insurance as a strategic tool rather than just a safety net.
The financial health of the industry further supports these expansion opportunities. Since 2015, trade credit insurers have maintained an average net combined ratio of 78%, reflecting solid profitability and enabling continued investment in new products and markets. Trade credit premiums grew at an annual rate of 14% between 2019 and 2023, highlighting sustained demand across economic cycles.
Sustainability-linked credit insurance is another emerging area of interest. Businesses focused on meeting environmental, social, and governance (ESG) criteria are increasingly seeking credit insurance solutions that align with their sustainability goals. This segment offers opportunities for companies to integrate risk management with responsible operations, often with favorable terms.
Clean-tech investment presents a unique opportunity, albeit with challenges. Many small and medium-sized enterprises (SMEs) in this sector face tight margins and higher credit risk perceptions, which can make traditional financing difficult to secure. Credit insurance can help bridge this gap by providing the risk mitigation needed to attract lenders and support clean-tech ventures.
Demand for specialized credit insurance products tailored to SMEs is also growing. Historically, such coverage was primarily available to larger corporations, but insurers are now developing more flexible, technology-driven solutions. This shift allows smaller businesses to access the tools they need to compete effectively in global markets.
Looking ahead, 60% of Berne Union short-term insurers anticipate growth in trade credit insurance coverage over the next year. This optimism reflects the industry’s confidence in its ability to support businesses as they navigate risks and seize opportunities.
Richard Wulff, Executive Director of ICISA, emphasized the industry’s importance:
"These results reflect more than just market performance – they represent the willingness of our members to support the economy, even when there are clouds on the horizon. The strategic agility of our members enable the indispensable role our industry plays in enabling trade, investment, and development globally."
For businesses considering credit insurance, the current landscape offers an ideal time to explore their options. Competitive pricing, expanded coverage, and technological advances make it easier than ever to implement comprehensive protection strategies. As the market continues to evolve, early adopters stand to gain a strategic edge while safeguarding against emerging risks.
Conclusion: Key Points for Businesses in 2025
The trade credit insurance market in 2025 brings a mix of challenges and opportunities, urging businesses to take proactive steps. With bankruptcies and insolvencies on the rise, securing comprehensive credit protection has never been more critical.
If you’re considering trade credit insurance, acting within the next 60 days could be crucial. Potential tariff impacts may limit future coverage options, even though current conditions remain favorable for new policyholders despite broader economic challenges. This favorable window may not stay open for long.
The financial stakes are high. Insurers are reporting a sharp increase in both the number and value of claims, driven by rising insolvencies. These trends highlight why trade credit insurance has shifted from being an optional safeguard to a strategic necessity for maintaining cash flow and fostering growth. Advances in technology are further supporting this shift, making risk management more efficient.
Digital tools, AI-driven platforms, and real-time risk analysis are transforming the industry. These innovations streamline processes, improve decision-making, and reduce administrative workloads. Adopting these technologies allows businesses to make quicker, more informed credit decisions while simplifying day-to-day operations.
The growing adoption of trade credit insurance reflects its importance as a core business tool, not just a risk management measure. Companies that focus on clear communication about their risks and work closely with brokers tend to secure better terms and more tailored coverage options. These custom solutions are increasingly powered by digital advancements that refine and expand coverage capabilities.
To stay ahead, businesses should partner with experienced professionals and keep a close eye on market developments. Regularly reviewing and updating policies ensures that coverage aligns with business growth and changing market conditions. For those exploring their options, platforms like CreditInsurance.com offer helpful resources and guidance on how trade credit insurance can protect against non-payment, customer insolvency, and political risks. Additionally, it can help unlock better financing opportunities and increased credit lines.
With rising risks, evolving market conditions, and cutting-edge technologies, businesses have a unique chance to strengthen their financial footing. By acting now, companies can secure robust protection at competitive rates while building the resilience needed to succeed in an increasingly complex global economy.
FAQs
How is AI shaping the future of the trade credit insurance industry, and what advantages does it bring to businesses?
AI is reshaping the trade credit insurance industry, bringing new levels of efficiency and precision. By refining risk assessments, accelerating claims processing, and automating routine tasks, it’s making processes smoother and decisions sharper, all while improving the overall customer experience.
For businesses, AI-powered tools provide quicker credit evaluations, real-time risk tracking, and predictive insights to anticipate and tackle potential issues early. This not only simplifies operations but also helps safeguard financial health and drive growth by mitigating risks such as non-payment and insolvency.
What geopolitical factors are shaping the trade credit insurance market in 2025, and how are they influencing global trade?
In 2025, the trade credit insurance market faces a turbulent landscape shaped by global challenges like trade disputes, tariffs, and international conflicts. These issues are shaking up global trade, disrupting supply chains, increasing credit risks, and influencing cross-border investments in unexpected ways.
Take rising tariffs and trade tensions between major economies, for example. These factors are prompting shifts in trade partnerships and raising the likelihood of non-payment for businesses. On top of that, ongoing conflicts and political instability are delaying shipments and undermining the dependability of global trade flows. In response, more companies are turning to trade credit insurance as a safeguard, helping them navigate financial risks and maintain stability in an unpredictable environment.
Why is trade credit insurance essential for small businesses and sustainability-focused companies, and what solutions are available to meet their needs?
Trade credit insurance plays a vital role for small businesses and those focused on sustainability by offering protection against financial risks such as unpaid invoices or customer insolvency. These issues can disrupt cash flow, particularly during uncertain economic times. With this safeguard in place, businesses can prioritize growth and maintain financial stability.
For businesses committed to sustainability, trade credit insurance also supports responsible credit management and aligns with ESG goals by encouraging sound risk practices. Customized solutions often include flexible coverage options, tools to navigate global risks, and user-friendly digital platforms that simplify policy management. These features provide businesses with the confidence to expand while staying prepared for unexpected challenges.
