Credit insurance is reshaping supply chain finance in 2025. Here’s why it matters:
- Rising bankruptcies: U.S. business bankruptcies are up 23.5% this year, with 25% linked to unpaid invoices.
- Cash flow stability: Credit insurance protects businesses from non-payment, improving cash flow and reducing risks in supply chains.
- Market growth: The global trade credit insurance market is projected to grow by 9.3% this year, reaching $13.34 billion.
- Better financing terms: With insured invoices, businesses secure higher credit limits and lower financing costs.
- Tech-driven efficiency: AI and digital platforms are speeding up underwriting, risk assessments, and access to financing.
Credit insurance is no longer just about covering losses – it helps businesses expand, secure funding, and navigate economic uncertainty. Whether you’re a small business or a multinational, understanding and utilizing credit insurance can transform your financial strategy.
Understanding the Divide: TCI vs. Supply Chain Insurance Explained
Key 2025 Trends in Credit Insurance and Supply Chain Finance
As credit insurance continues to play a vital role in stabilizing cash flows, its application and market dynamics are evolving significantly in 2025. Let’s explore three major trends reshaping how companies approach risk protection and supply chain financing.
Growing Demand for Risk Protection During Economic Uncertainty
Economic instability is pushing more businesses to turn to credit insurance for safeguarding their supply chains. The trade credit insurance market is forecasted to grow from $12.21 billion in 2024 to $13.34 billion in 2025, reflecting a 9.3% compound annual growth rate (CAGR). This upward trajectory is expected to continue, with projections reaching $17.48 billion by 2028.
The rise in insolvencies – expected to affect countries contributing to 50% of global GDP in 2025 – has heightened concerns over payment defaults. This has led to a surge in demand for non-cancellable policies, which provide guaranteed coverage even under worsening economic conditions.
At the same time, global merchandise trade is expected to grow by 3.0% in 2025, offering new opportunities for cross-border transactions but also increasing exposure to international payment risks. Factors like supply chain disruptions, inflation, and geopolitical tensions have made businesses more aware of the potential for customer defaults.
"The demand for trade credit insurance will only grow as businesses confront an increasingly uncertain future." – ICISA
Companies are realizing the critical role of credit insurance in global trade. For example, short-term trade credit insurance accounted for 15.07% of global trade in 2023, equivalent to €8.5 trillion. Rising non-payments, declining sales, and growing insolvencies are driving businesses to adopt credit insurance as a key risk management tool.
How Credit Insurance Improves Business Liquidity
Credit insurance is reshaping how U.S. businesses access capital and manage cash flow. Traditional lending, which focuses on company-wide credit metrics, is giving way to transaction-based financing that evaluates individual supplier relationships and payment behaviors.
This shift particularly benefits mid-market companies, which have historically faced higher financing costs and longer cash conversion cycles. These companies often see working capital improve by 20–30% within 90 days thanks to credit insurance. It serves as alternative collateral, meeting the security requirements of capital providers.
What’s more, credit insurance programs are quicker to implement. Program setups typically take 3–5 weeks, compared to the 10–14 weeks required for traditional financing facilities. By focusing on individual transactions, mid-market companies can secure premium terms on 60–70% of their supplier relationships.
The broader supply chain finance (SCF) market reflects this trend of integration. Valued at $7.5 billion in 2024, the global SCF market is expected to grow to $15.2 billion by 2033. Businesses are increasingly turning to SCF solutions for immediate cash flow relief, avoiding the hurdles of traditional lending during economic downturns.
Growth in Private Credit Insurers and Market Options
The credit insurance market has evolved into a competitive landscape, offering more choices for U.S. businesses. Twenty-five years ago, just three private insurers dominated the trade credit market with nearly 100% market share. Today, more than 20 private short-term credit insurers operate in the market, providing greater diversity and competition.
This transformation has been fueled by strong market performance, which has attracted new capital. Private sector insurers now account for 72% of the trade credit insurance market, with premiums exceeding €15 billion. New entrants have brought additional capacity and fresh approaches to underwriting.
Advancements in technology have also lowered barriers to entry. Digital platforms and automated underwriting systems have streamlined processes, while the rise of the MGA (Managing General Agent) model is expected to attract even more players in 2025.
Established insurers are expanding into this sector as well. Companies like MSIG, Tokio Marine HCC, and Canopius are adding capacity to the market. This growth is supported by record-high reserves, with U.S. policyholder surplus exceeding $1 trillion and global reinsurance capital surpassing $700 billion.
The increased competition benefits businesses by offering better pricing, more flexible terms, and specialized products. Insurers are now tailoring policies to meet the specific needs of industries like pharmaceuticals, construction, agriculture, and electronics. Financial institutions are also bundling trade credit insurance with other lending products, particularly for export financing.
"This diversity of supply helps create a fully functioning competitive market ecosystem, and is much to be welcomed." – Mike Holley, Strategic Advisor, SCHUMANN
This competitive environment allows businesses to find coverage that aligns closely with their risk profiles and financial needs. It also sets the stage for further technological advancements and innovative partnerships in supply chain finance.
Technology Changes and Their Impact
As we move into 2025, advancements in technology are reshaping the landscape of credit insurance and supply chain finance. Tools like digital platforms, artificial intelligence (AI), and advanced analytics are breaking down old barriers, making these financial services more accessible and efficient for businesses of all sizes.
Digital Platforms: Simplifying Credit Insurance Access
Digital platforms are revolutionizing how businesses interact with credit insurance, turning what was once a cumbersome process into something much more streamlined. This shift has been especially helpful for small and medium-sized enterprises (SMEs), which have historically faced challenges like lengthy applications and extensive paperwork.
Today, fintech platforms serve as marketplaces, connecting buyers, suppliers, and funding providers in a seamless way. This connectivity has significantly expanded access to supply chain finance. By 2025, over 80% of large global manufacturers are expected to have some form of supply chain finance program in place.
Open banking APIs are playing a critical role here, enabling faster and more informed credit decisions. These APIs allow financial systems to exchange data efficiently, reducing the time it takes for businesses to receive credit assessments from days to just hours.
The benefits extend beyond speed and accessibility. Supply chain finance programs powered by these platforms can reduce working capital costs by as much as 30%. A standout example is Standard Chartered’s partnership with Chinese fintech Linklogis to launch SCeChain – a platform designed to connect and finance suppliers across multiple tiers. Additionally, the digital connectivity of these platforms allows insurers to monitor risks in real time, providing early warnings for potential issues.
Building on these advancements, automation and AI are taking risk assessment to the next level.
Automation and AI: Transforming Risk Assessment
AI is revolutionizing credit insurance underwriting, dramatically improving both speed and accuracy. For instance, AI has reduced the average underwriting decision time for standard policies from three to five days to just 12.4 minutes – all while maintaining a 99.3% accuracy rate.
One of AI’s key strengths lies in its ability to analyze massive datasets and uncover patterns that humans might miss. By examining financial behavior, payment history, and even unstructured data, AI creates detailed risk profiles that help insurers make more informed decisions. For more complex policies, AI has cut underwriting times by 31% and improved accuracy by 43%.
AI is also a powerful tool for fraud detection. It can analyze unstructured data to spot inconsistencies that might indicate fraudulent activity or heightened risk. And because AI systems learn and evolve as new data becomes available, their assessments continually improve over time.
There are numerous examples of AI making a tangible impact. Berkshire Hathaway Homestate Companies introduced Z-FIRE in 2021, an AI-based wildfire risk assessment solution developed by ZestyAI. This tool uses 200 billion data points and a model trained on over 1,400 wildfire events to provide property-level risk scores. Similarly, Planck, an insurtech startup from Israel, developed an AI platform for commercial insurance underwriting that automates applications and delivers risk insights in under five seconds.
"AI has the ability to discern patterns in ways and in data sets where humans simply cannot, or they simply just don’t have the capacity to look at ginormous data sets and tease out various patterns. That’s what AI can do very successfully." – Doug McElhaney, Partner at McKinsey
The productivity gains from AI are remarkable. Banks using AI underwriting have reported reductions in time-to-decision for commercial loans by 50% to 75%, with overall productivity improvements ranging from 20% to 60%. These capabilities are setting a new standard for data-driven decision-making in credit insurance.
Data-Driven Decision Making: The Future of Credit Insurance
Big data and advanced analytics are empowering insurers to evaluate credit risks with greater precision and flexibility. By 2025, nearly half (45%) of financial organizations globally are expected to integrate AI into their data analysis processes, underscoring the growing importance of data in strategic decision-making.
Data analytics offers a comprehensive view of operations, enabling businesses to identify opportunities and make smarter investments. For credit insurers, this means moving away from one-size-fits-all approaches and instead offering tailored solutions based on detailed risk assessments. Companies that embrace data-driven strategies can achieve up to 9% annual portfolio growth, while those that don’t risk losing over half of their customers.
Predictive analytics, powered by AI and machine learning, is particularly valuable for forecasting market trends and risks. A good example is Rubix Data Sciences’ Rubix ARMS+EWS platform, which delivered real-time analytics, risk scores, and sectoral insights in early 2025. This tool proved invaluable during a challenging period when U.S. companies were filing for bankruptcy at the fastest rate in 15 years.
The integration of generative AI technologies is further enhancing these capabilities, providing advanced tools for predictive analytics and automation. This data-driven approach is also driving the diversification of supplier bases, which increases demand for deep-tier supply chain finance. As supply chains grow more intricate, the ability to assess risks across multiple tiers becomes even more critical.
How Credit Insurance Integrates with Supply Chain Finance
Credit insurance has shifted from being a supplementary feature to an essential component of supply chain finance, addressing the complexities of global trade. With credit insurance underpinning 80% of global trade, understanding its role in supply chain finance is key to staying competitive.
Supply chain finance enhances cash flow for buyers and suppliers by leveraging financial tools and technology platforms to connect all parties. When credit insurance is added to the mix, it not only safeguards against non-payment but also allows receivables to be insured and used as collateral. This enables businesses to secure better financing terms and strengthens financial resilience. Together, these elements create a powerful foundation for innovative financing solutions and collaborative models, which are explored further in this section.
Partnership Models Between Insurers, Banks, and Fintechs
The integration of credit insurance into supply chain finance often relies on partnerships between insurers, banks, and fintechs. These collaborations bring together the expertise and infrastructure of each party to deliver seamless financial solutions. For instance, Banking-as-a-Service (BaaS) models allow fintechs to offer credit insurance and supply chain finance through established banking systems. A notable example is Stripe’s partnership with Goldman Sachs and Evolve Bank & Trust, which powers Stripe Treasury and enables businesses to embed financial services directly into their platforms.
Embedded finance is another rising trend, integrating financial services into non-banking platforms for greater accessibility. Referral partnerships, on the other hand, connect businesses with the right insurance providers at pivotal moments. Open banking has further advanced these models by enabling secure data sharing between third-party providers, facilitating real-time risk assessments and expanding access to financial products.
The growing popularity of these partnerships is evident in the numbers. A 2019 PwC survey revealed that 42% of banks were involved in joint ventures with fintechs, and 94% of financial services companies believed fintech collaborations would boost their revenue. Real-world examples include Tradeshift‘s partnership with HSBC to create a digital platform for global supply chain management, N26 teaming up with Wise to offer international money transfers in over 30 currencies, and DoorDash‘s collaboration with Stride Bank to launch a prepaid business Visa debit card that offers U.S. delivery drivers 10% cash back on gas.
"Companies can remain focused on running and growing their business without spending a ton of time on technical bank integration." – Meg Garand, Head of CashPro Payments and CashPro API at Bank of America
Comparison of Integration Methods
Different integration methods cater to varying business needs and priorities. Direct partnerships with banks provide strong institutional backing and robust risk management, though they often require significant resources and time to implement. Fintech platform integrations, on the other hand, offer quicker deployment and lower initial costs, making them ideal for businesses seeking immediate access to financing and credit insurance.
BaaS and embedded finance models combine the strengths of traditional banking with the flexibility of digital solutions, enabling seamless integration into existing business operations. Referral partnerships provide an accessible starting point for companies exploring credit insurance options within supply chain finance.
Ultimately, the best integration method depends on a company’s technical capabilities, risk appetite, and growth objectives. These factors will determine the most effective approach for leveraging credit insurance to enhance supply chain finance.
Opportunities and Challenges for U.S. Businesses
The U.S. credit insurance market in 2025 presents both promising opportunities and persistent barriers, particularly for small and medium-sized enterprises (SMEs).
Opportunities for Small and Medium-Sized Enterprises (SMEs)
SMEs stand to benefit significantly from credit insurance, which has traditionally been more accessible to larger corporations. By adopting credit insurance, these businesses can improve their supply chain financing capabilities and expand their market reach.
Statistics highlight the advantages: SMEs using credit insurance report up to 30% more stable cash flow, experience 45% fewer non-payment issues, and achieve a 25% increase in international sales. Additionally, insured companies can recover up to 90% of their losses and secure financing at rates up to 2% lower. These benefits make credit insurance a powerful tool for managing risk and supporting growth.
However, despite these clear advantages, many SMEs remain unaware of the potential of credit insurance, and regulatory challenges further complicate adoption.
Challenges in Market Adoption and Awareness
The U.S. credit insurance market faces a significant awareness gap. Many businesses remain unfamiliar with how credit insurance can strengthen their financial strategies. This lack of knowledge is a major barrier to wider adoption.
Although credit insurance premiums in the U.S. currently total around $1 billion, the potential market includes an estimated 18 million companies. Regulatory restrictions in the U.S. also limit the ability of banks to utilize credit insurance effectively, especially compared to the more flexible environment in Europe. These challenges are compounded by rising financial pressures, with insolvencies increasing by 40% for the 12 months ending March 31, 2024, and business bankruptcies climbing since Q2 2022. These factors make it harder for businesses to secure favorable terms and manage risks effectively.
How CreditInsurance.com Supports U.S. Businesses
CreditInsurance.com steps in to address these challenges by offering tailored support to U.S. businesses. The platform provides unbiased information to help companies navigate credit insurance options and make informed decisions. Importantly, they offer broker services at no extra cost, assisting businesses in comparing quotes and implementing the right policies.
Their team of specialists works closely with businesses to identify solutions that align with specific supply chain finance needs. As CreditInsurance.com states:
"Working with a specialist can help you determine the best custom solution for your unique needs. Credit insurance pays you when your customer (the debtor) does not – simple as that!" – CreditInsurance.com
The platform also educates businesses on the benefits of trade credit insurance and how it can help mitigate non-payment risks. Through resources and guidance, they help businesses determine when credit insurance is a smart choice – particularly for those relying on open account sales, facing risks tied to international expansion, or dealing with unpredictable market conditions. With global events driving an increase in business insolvencies, credit insurance is becoming an essential part of risk management strategies.
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Conclusion and Key Takeaways
The evolving role of credit insurance in supply chain finance has never been more evident. As we move through 2025, credit insurance is no longer just about mitigating risk – it has become a strategic tool for U.S. businesses to enhance resilience and fuel growth. By integrating credit insurance with supply chain finance, companies are rethinking how they approach financing and market opportunities.
For mid-market firms, the impact is striking. These businesses have managed to improve working capital by 20–30% within just 90 days, even in the face of rising financing costs and extended cash cycles. Suppliers participating in insurance-backed programs have also seen significant benefits, reducing their financing costs by 400–600 basis points.
From a broader perspective, the adoption of credit insurance has delivered measurable financial stability. Companies recover up to 90% of insured losses while achieving an average 30% improvement in cash flow stability. This boost in liquidity, paired with reduced financing costs, provides a crucial edge in today’s unpredictable economic climate.
Gary Lorimer, Aon‘s Growth Leader for Credit Solutions, highlights this shift:
"We’re seeing more and more people starting to use credit insurance to access better financing rather than as a risk mitigation tool only."
Cruz Gonzalez, Global Head of Receivables and SCF at LST Europe, emphasizes the importance of timing:
"Discussing around insurance, utilizing the trade credit insurance that corporate clients might have at a sooner stage will help them also in their discussions with their lenders. So it is always beneficial that these discussions start from a sooner perspective, because you can make transactions into a bankable or fundable solution."
The integration of ESG priorities, advancements in digital technology, and the drive for supply chain resilience all point to credit insurance as a critical element of competitive strategy. Businesses that adopt these solutions are better positioned to weather economic uncertainty, enter new markets, and secure the funding they need for sustainable growth. This transformation solidifies credit insurance as a key pillar in modern financial strategy, enabling companies to stay agile and forward-thinking in an ever-changing landscape.
FAQs
How does credit insurance help businesses maintain stable cash flow in 2025?
The Role of Credit Insurance in 2025
In 2025, credit insurance continues to be a key tool for businesses looking to maintain stable cash flow. It shields companies from financial risks like non-payment, customer insolvencies, and bad debts. By stepping in to cover these risks, credit insurance ensures businesses still get paid, even if a customer fails to meet their obligations. This safety net helps keep revenue streams steady, even in unpredictable situations.
Beyond protecting against defaults, credit insurance gives businesses the confidence to plan ahead. With reduced worries about delayed payments or economic ups and downs, companies can focus on growth. This added layer of financial stability often leads to better financing opportunities and supports expansion efforts while keeping risks under control.
How are digital platforms and AI transforming credit insurance in supply chain finance?
How Digital Platforms and AI Are Changing Credit Insurance
The world of credit insurance is undergoing a transformation, thanks to digital platforms and AI technologies. These advancements bring innovations like real-time data analysis, automated workflows, and dynamic risk assessment into the mix. The result? Faster and more accurate credit evaluations, streamlined claims processing, and better tools for businesses to make informed decisions while managing risks effectively.
AI-driven tools also play a key role in creating personalized financial profiles and predicting potential risks. This not only boosts operational efficiency but also adds a layer of reliability to credit insurance processes.
One area where this shift is particularly impactful is supply chain finance. By leveraging these technologies, businesses can enjoy smoother transactions, healthier cash flow, and stronger protection against financial uncertainties – a critical advantage in today’s increasingly interconnected and complex global economy.
Why are more small and medium-sized businesses (SMBs) turning to credit insurance in 2025?
Credit Insurance Trends for SMBs in 2025
In 2025, small and medium-sized businesses (SMBs) across the United States are increasingly turning to credit insurance, driven by a mix of economic challenges and growth opportunities. As many businesses venture into new markets, the risk of payment defaults rises, making financial protection a priority. At the same time, economic uncertainties have led to a surge in customer insolvencies and bankruptcies, further highlighting the need for safeguards.
Another reason credit insurance is gaining traction is the growing recognition of its advantages. It helps businesses protect their accounts receivable, ensuring they can weather financial setbacks. Plus, it can improve access to financing, as lenders often view insured receivables as a lower-risk asset. On top of that, advancements in technology have made credit insurance easier to access and manage, giving SMBs the tools they need to handle risks while maintaining financial stability.
