Trade Credit Insurance Market - By Organization Size (SMEs, Large Enterprise), By Coverage (Whole Turnover, Single Buyer), By Application (Domestic, International), By End Use (Healthcare, Automotive, F&B, IT & Telecom, Manufacturing) & Forecast, 2023 – 2032

Trade Credit Insurance Market - By Organization Size (SMEs, Large Enterprise), By Coverage (Whole Turnover, Single Buyer), By Application (Domestic, International), By End Use (Healthcare, Automotive, F&B, IT & Telecom, Manufacturing) & Forecast, 2023 – 2032

Trade Credit Insurance Market Size

Trade Credit Insurance Market size was valued at 9.2 billion in 2022 and is estimated to register a CAGR of 10.2% between 2023 and 2032. The expansion of trade globally has created a demand for trade credit insurance to reduce the risk of non-payment from foreign buyers, contributing to the trade credit insurance industry share. The increased uncertainty in global trade and protectionism will drive the demand for trade credit insurance. Furthermore, these insurers provide data to their insured companies about the businesses they want to work with, thus helping them identify payment difficulties and allowing insured companies to operate their businesses with greater confidence.

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Trade credit insurance, also known as credit insurance or export credit insurance, is a type of insurance coverage that protects businesses from the risk of non-payment by their customers or debtors. It provides financial protection to businesses that sell goods or services on credit terms, safeguarding their trade receivables and reducing the risk of potential losses due to customer insolvencies, protracted defaults, or political & economic events.

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During economic downturns or recessions, businesses may experience financial difficulties, increasing the risk of payment defaults and insolvencies. These challenging economic conditions can lead to an elevated number of claims in the trade credit insurance market, impacting the insurer’s profitability and potentially leading to premium increase. Furthermore, changing global trade dynamics, geopolitical tensions, or trade disputes can also disrupt international trade flows and impact the creditworthiness of businesses. Uncertainty in trade relationships or the imposition of trade barriers can introduce additional risks, posing challenges for insurers to accurately assess and price policies.

COVID-19 Impact

The COVID-19 pandemic had impacted the global trade dynamics including trade credit insurance. Due to the pandemic, governments were forced to seal international borders and temporarily close markets, industries, and other public places in 2020. Manufacturing plant closures resulted in revenue losses for businesses, leading many major corporations to bankruptcy. Disruptions in the supply chain hampered global sales and trade, lowering the demand for trade credit insurance in 2020. However, during these uncertainties, many businesses turned to trade credit insurance to protect their trading risks and continue business with confidence.

Trade Credit Insurance Market Trends

Trade credit insurance protects businesses from economic and political risks that can jeopardize their financial situation. The benefits of trade credit insurance policies, such as protection of accounts receivable from the loss caused by bankruptcy or credit risks including extended default, are driving product adoption globally. Furthermore, rising strategic initiatives among market players, such as partnerships, collaborations, and acquisitions, are expected to fuel market growth. Advancements in digital technology will enable insurers to provide more efficient & cost-effective services, making trade credit insurance more accessible & affordable to businesses.

Trade Credit Insurance Market Analysis

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Based on organization size, the trade credit insurance market is categorized into SMEs and large enterprise. The large enterprise segment is estimated to register a CAGR of over 9% by 2032. This growth can be attributed to the increasing demand for trade credit insurance policies in large enterprises to reduce the risk of non-payment. Furthermore, market participants such as Allianz Trade provide trade credit insurance designed specifically for large enterprises to protect their cash flow and receivables. Large enterprises trade in huge volumes of sales with long payment terms, where the risk of non-payment is high, thereby prompting them to implement trade credit insurance policies.

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Based on end use, the trade credit insurance market is divided into healthcare, automotive, food & beverages, IT & telecom, manufacturing, and others. The automotive segment is estimated to reach over USD 2.2 billion in 2032. The automotive sector is facing uncertainties due to rapid technological advancements, changing consumer tastes, government regulations, and relative pricing. Considering the high value of transactions and the potential risks associated with supplying goods to a diverse range of customers, trade credit insurance is crucial in the automotive industry. The growing awareness of the benefits of trade credit insurance among automotive businesses is further propelling market expansion.

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Europe led the global trade credit insurance market with a share of over 35% in 2022. Europe's economic stability and well-established legal frameworks make it an attractive region for trade. However, economic downturns, geopolitical uncertainties, and changes in government policies can impact the ability of businesses to recover from debts, leading to an increased demand for trade credit insurance to mitigate payment risks. Europe has a highly active trade environment, both within the EU and with countries outside the EU. The high volume of international transactions including imports, exports, and cross-border trade creates a need for trade credit insurance to safeguard businesses from the potential financial losses associated with non-payment.

Trade Credit Insurance Market Share

Some major players operating in the trade credit insurance market are

• American International Group, Inc
• Aon Plc
• Atradius
• Chubb
• Coface
• Credendo
• Export Development Canada (EDC)
• Euler Hermes
• Great American Insurance Company

These players are focused on strategic partnerships, new product launches, and commercialization efforts for market expansion. They heavily invest in research to introduce innovative products and garner the maximum market revenue.

Trade Credit Insurance Industry News

• In April 2023, Allianz Trade, a trade credit insurance provider, partnered with Bueno.money, a Singapore-based B2B BNPL provider, to enter the growing Asia Pacific B2B e-commerce arena. With the help of Allianz Trade’s innovative credit solution, E-commerce Credit Insurance, Bueno.money will provide deferred payment solutions to online merchants in real-time while mitigating credit risks.
• In July 2022, The Export Credit Guarantee Corporation of India (ECGC), an export credit provider, announced a new scheme to insure up to 90% of the credit risk in export finance, assisting small- & medium-sized exporters by empowering banks and financial institutions to provide more credit for export in the face of global economic volatility.

The trade credit insurance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments

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By Organization Size

• SMEs
• Large enterprise

By Coverage

• Whole turnover coverage
• Single buyer coverage

By Application

• Domestic
• International

By End Use

• Healthcare
• Automotive
• Food & beverages
• IT & telecom
• Manufacturing
• Others

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Sweden
  • Switzerland
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Singapore 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • Israel

Frequently Asked Questions (FAQ)

What is the size of the trade credit insurance market?

Market size for trade credit insurance reached 9.2 billion in 2022 and will record 10.2% CAGR from 2023-2032 driven by the surging need to limit the risk of non-payment from foreign buyers.

Why is the demand for trade credit insurance growing across the automotive sector?

Trade credit insurance industry share from the automotive industry is estimated to exceed USD 2.2 billion by 2032 due to the changing consumer tastes, government regulations, and relative pricing.

What is the trade credit insurance market worth in Europe?

Europe held more than 35% of the trade credit insurance industry share in 2022 owing to the presence of economic stability and well-established legal frameworks in the region.

Who are the major trade credit insurance business players?

American International Group, Inc, Aon Plc, Atradius, Chubb, Coface, Credendo, Export Development Canada (EDC), Euler Hermes, and Great American Insurance Company are some of the key trade credit insurance providers