Trade Credit Insurance Market Size, Share & Trend Analysis Report By Enterprise Size (Large Enterprises, Small & Medium Enterprises), By Coverage, By Application, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global trade credit insurance market size was valued at USD 9.56 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 11.1% from 2023 to 2030. The growth of the trade credit insurance industry can be attributed to the growing expansion of trade across several locations leading to the demand for trade credit insurance to reduce the risk of non-payment from foreign buyers. Furthermore, increased uncertainty and protectionism in global trade are expected to drive the demand for trade credit insurance (TCI). In addition, the data provided by the insurer to their insured companies about the businesses they want to work with can help them identify the difficulty in payments, and hence insured companies can run their business with greater confidence.

The introduction of digital software to streamline banking and insurance services and the use of data analytics and blockchain in trade finance is expected to drive market growth. Moreover, the market players are expanding trade credit solutions for digital platforms to gain a competitive advantage over their rivals. For instance, in November 2021, Atradius N.V., a trade credit insurance provider, announced the expansion of its trade insurance for digital platforms. The initiative helped the company gain a competitive advantage due to increased demand for embedded insurance from B2B marketplaces. The company offered its single transaction cover insurance (STCI) to buyers in over 130 countries.

The industry is experiencing various technological advancements, such as the launch of Artificial Intelligence (AI)-based applications and the Internet of Things (IoT)-enabled insurance solutions. For instance, in October 2021, LiquidX, a financial technology firm providing solutions for trade finance, working capital, and insurance, introduced InBlock Digital Policy Management for trade credit insurance. The new launch InBlock Digital Policy Management solution leverages AI, Distributed Ledger Technology (DLT), and smart contract technology that integrate trade credit insurance policies into financial workflows and automate critical policy management and compliance processes. Hence, the integration of advanced technologies into the market is expected to drive the growth of the market over the forecast period.

Trade credit insurance is insurance intended to protect businesses from economic and political risks that could affect their financial situation. Furthermore, the benefits of trade credit insurance policy, including protection of accounts receivable from loss caused by bankruptcy, insolvency, or credit risks, such as extended default, are driving the adoption of trade credit insurance worldwide. In addition, the rising strategic initiatives, such as partnerships, collaborations, and acquisitions, among market players are also expected to fuel the market’s growth. Moreover, the rise of digital technology enables insurers to offer more efficient and cost-effective services, making trade credit insurance more accessible and affordable to businesses.

The trade credit insurance can be costly and complex to manage which might hinder the growth of the market. Furthermore, a lack of awareness among businesses about trade credit insurance policies also might hinder market growth. In addition, the conflict and differences in the trade regulations across different jurisdictions can be considered as one of the major factors restraining the market’s growth. However, the uncertainty in the market and increasing non-payment frauds worldwide are anticipated to propel the market’s growth over the forecast period.

COVID-19 Impact Analysis

The COVID-19 pandemic affected the global industry. It has significantly altered the global trade dynamics. In 2020, governments were forced to seal international borders and temporarily close markets, industries, and other public places due to the pandemic. The closure of manufacturing plants resulted in a loss of revenue and businesses. This financially impacted business and led to the bankruptcy of many leading companies. The supply chain disruption negatively impacted the sales and trades in the global market, which led to a notable drop in the demand and sales of trade credit insurance in 2020. However, facing such high tides of ambiguity, many businesses turned to trade credit insurance to safeguard their trading risks and continue doing business with assurance.

Enterprise Size Insights

The large enterprises segment accounted for the maximum revenue share of more than 60.0% in 2022 and is expected to retain its dominance over the forecast period. The growth can be attributed to the increasing demand for trade credit insurance policies by large enterprises to reduce the risks of non-payments. Furthermore, the market players such as Allianz Trade are involved in offering trade credit insurance specifically designed for large enterprises to protect their cash flow and receivables. Additionally, large enterprises trade in large volumes of sales over long payment terms, where the risk of non-payment can be significant. Hence, large enterprises are adopting trade credit insurance policies worldwide.

The small & medium enterprises segment is expected to grow at the fastest CAGR over the forecast period. This can be attributed to small & medium enterprises (SMEs) in the trade credit sector experiencing cash-flow difficulties as many of their sales are tied up in credit to buyers. Therefore, small & medium enterprises receive support from TCI as trade finance concentrates more on the trade itself rather than the underlying borrower. Moreover, governments worldwide are trying to support SMEs by introducing different schemes. For instance, in July 2022, the Export Credit Guarantee Corporation of India (ECGC), an export credit provider, unveiled a new scheme to insure up to 90% of the credit risk in export finance, assisting small & medium-sized exporters by empowering banks & financial institutions to provide more credit for export in the face of global economic volatility.

Coverage Insights

The whole turnover coverage segment dominated the industry in 2022 and accounted for the largest share of more than 62.0% of the overall revenue. The whole turnover policy coverage provides cover against the risk of non-payment. Usually, businesses purchase the whole turnover policy to support their credit control management and get coverage against their total debtor book. Furthermore, the high share of this segment can be credited to the whole turnover coverage being less expensive and safeguarding insurers from the initial high-probability credit losses. Moreover, the insured can significantly reduce coverage costs by raising the deductible, depending on its risk retention capabilities.

The single buyer coverage segment, on the other hand, is anticipated to register a significant growth rate over the forecast period. The growth of this segment can be attributed to the credit limit offered that enables underwriters to cover all financial transactions with the customer. This policy provides highly tailored protection against a single buyer failing to pay for goods or services provided. The companies involved in dealing with new customers commonly opt for single-buyer insurance to avoid a customer’s payment issues.

Application Insights

The international application segment dominated the market in 2022 and accounted for the maximum share of over 66.0% of the overall revenue. This growth of the segment is attributed to the advantages, such as significantly reducing the payment risks associated with performing business at an international level by providing the exporter a conditional assurance of making the payment if the foreign buyer is not able to pay. Furthermore, the rising launch of trade credit insurance policies for the exporter is further anticipated to drive the segment’s growth. For instance, in July 2022, the Export Credit Guarantee Corporation of India (ECGC), introduced a scheme of insuring 90% of the credit risk in export finance for small exporters.

The domestic application segment is expected to grow at the fastest CAGR over the forecast period. The growth of this segment can be attributed to a rise in the adoption of trade credit insurance within domestic sales. The rise in the adoption of trade credit insurance in the domestic market can be attributed to businesses focusing on avoiding bad debts and improving their cash flow. Furthermore, trade credit insurance offers companies the protection they require as their customer base consolidates creating larger receivables from minimal customers and protecting them from great risk.

End-use Insights

The food & beverage was the single individual segment that dominated the market in 2022 accounting for the largest share of over 19.0% of the overall revenue. The segment growth can be attributed to the increasing demand for trade credit insurance across the food & beverage industry. The low margins, changing consumer expectations such as high-quality ingredients, and volatile agricultural commodity pricing have created a need for protection of cash flows driving trade credit insurances across the food & beverage industry. Furthermore, trade credit insurance allows food & beverage companies to mitigate credit risk and enhance competitiveness by offering extended payment terms, thereby driving the segment’s growth.

The automotive segment is anticipated to register the fastest CAGR over the forecast period. The growth of this segment can be attributed to the automotive sector being a major industry facing uncertainties due to rapid technological advancements, changing consumer tastes, government regulations, and relative pricing. Furthermore, trade credit insurance can be particularly important in the automotive industry, given the high value of transactions and the potential risks associated with supplying goods to a wide range of customers. The growing awareness regarding the benefits of trade credit insurance among businesses in the automotive industry is also driving the segment’s growth.

Regional Insights

Europe accounted for the largest revenue share of more than 32.0% in 2022 and is anticipated to retain its position over the forecast period. The presence of major market vendors and the high adoption of advanced technologies in the region are the key factors driving the region’s growth. Moreover, governments have launched different schemes to support companies by promoting TCI. For instance, in June 2020, The UK government formed a reinsurance scheme of USD 12.5 billion to assist businesses during the pandemic by assuring trade credit insurers insure financial transactions. The scheme will cover 90% of business-to-business TCI transactions for companies in the UK.

Asia Pacific is anticipated to grow at the fastest CAGR over the forecast period. The growth of the region can be attributed to the rising demand for TCI due to an increase in imports and exports in different sectors. With the potential growth in different sectors, there have been increasing investments from Asia Pacific countries, such as Japan, India, and China. For instance, in 2021, China implemented several policies to boost foreign trade growth, including boosting the development of new business forms and modes, deepening reform to promote cross-border trade, and improving the business environment at ports.

Key Companies & Market Share Insights

The market has a fragmented competitive landscape as it features various global and regional players. Leading industry players are adopting strategies, such as partnerships, collaborations, acquisitions & mergers, and agreements, to survive the highly competitive environment and expand their business footprints. For instance, in April 2023, Allianz Trade, a trade credit insurance provider, entered the thriving B2B e-commerce arena in Asia Pacific through its partnership with Bueno.money, a B2B BNPL provider based in Singapore. Bueno.money can provide deferred payment solutions to online merchants in real-time while safeguarding credit risks with the help of Allianz Trade's innovative credit solution E-commerce Credit Insurance.

Moreover, in May 2022, the global risk intelligence and credit data experts Creditsafe Nederland BV announced the acquisition of Graydon, a subsidiary of Atradius N.V. Graydon is a prominent B2B information service in Belgium and the Netherlands. Creditsafe is expected to combine its expertise and international coverage with Graydon’s value-added analytical services and market knowledge to help its clients. Some of the prominent players operating in the global trade credit insurance market include:

• Allianz Trade

• Atradius N.V.

• Coface

• American International Group, Inc. (AIG)

• Zurich

• Chubb

• QBE Insurance Group Limited

• Great American Insurance Company

• Aon plc

• Credendo

Trade Credit Insurance Market Report Scope

Global Trade Credit Insurance Market Report Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global trade credit insurance market based on enterprise size, coverage, application, end-use, and region.

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• Coverage Outlook (Revenue, USD Million, 2017 - 2030)

  • Whole Turnover Coverage

  • Single Buyer Coverage

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Domestic

  • International

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • Food & Beverage

  • IT & Telecom

  • Healthcare

  • Energy

  • Automotive

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)

    • UAE

    • Kingdom of Saudi Arabia (KSA)

    • South Africa