GVR Report cover Trade Credit Insurance Market Size, Share & Trends Report

Trade Credit Insurance Market Size, Share & Trends Analysis Report By Enterprise Size (Large, SMEs), By Coverage (Whole Turnover, Single Buyer), By Application, By End-user (Energy, F&B), By Region, And Segment Forecasts, 2022 - 2030

  • Report ID: GVR-4-68040-009-6
  • Number of Pages: 90
  • Format: Electronic (PDF)
  • Historical Range: 2017 - 2020
  • Industry: Technology

Report Overview

The global trade credit insurance market size was valued at USD 7.77 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 11.1% from 2022 to 2030. The industry is experiencing various technological advancements, such as the launch of AI-based applications and the Internet of Things (IoT)-enabled insurance solutions. Moreover, increased uncertainty and protectionism in global trade are expected to drive the demand for Trade Credit Insurance (TCI). 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.

U.S. trade credit insurance market size, by enterprise size, 2020 - 2030 (USD Billion)

This financially impacted businesses 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 TCI 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. In India, the demand for trade credit insurance increased in April-June 2021 by 30% year-on-year since more businesses fear payment risks caused by the financial meltdown and payment delays due to the pandemic. In addition, the introduction of digital software to streamline banking and insurance services and the use of data analytics and blockchain in trade finance are expected to drive the market.

Thus, the introduction of the Internet of Things (IoT) and Artificial Intelligence (AI) technology, along with advanced computer technology, such as machine learning and big data, are anticipated to provide financiers with tools for accurate data during the forecast period. Trade credit insurance is a type of insurance intended to protect businesses from economic and political risks that could affect their financial situation. It is a subcategory of property and casualty insurance that is generally offered to commercial enterprises or private individuals by government agencies in charge of export credit and insurance companies. Furthermore, TCI aims to protect accounts receivable from loss caused by bankruptcy, insolvency, or credit risks, such as extended default.

Enterprise Size Insights

On the basis of enterprise sizes, the industry has been segmented into large enterprises and Small & Medium Enterprises (SMEs). The large enterprise segment accounted for the largest revenue share of 61.1% in 2021 and is expected to continue to dominate the market over the forecast period. This can be attributed to the increasing demand for and adoption of TCI by large-scale enterprises as they not only appreciate the cover provided by their credit insurance policy but also value the information their insurer can provide them with about the companies in different parts of the world they want to do business with. The SMEs segment is expected to grow at a significant CAGR over the forecast period.

This can be attributed to SMEs in the trade credit sector experiencing cash-flow difficulties as many of their sales are tied up in credit to buyers. Therefore, SMEs 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- and medium-sized exporters by empowering banks & financial institutions to provide more credit for export in the face of global economic volatility.

Application Insights

On the basis of applications, the global industry has been further categorized into domestic and international. The international application segment dominated the industry in 2021 and accounted for the maximum share of more than 66.5% of the overall revenue. This application segment is expected to retain its dominant position in the industry throughout the forecast period. This is attributed to the advantages, such as significantly reducing the payment risks associated with doing business internationally by giving the exporter conditional assurance that payment will be made if the foreign buyer is unable to pay.

The domestic application segment is expected to grow at a significant growth rate during the forecast period. The growth of this segment is increasing owing to a rise in the use of trade credit insurance for domestic accounts receivable protection as well. As it provides companies with the protection they need as their customer base consolidates creating larger receivables from fewer customers and protecting them from great risk.

End-user Insights

In terms of end-users, the industry has been segmented into food & beverage, IT & telecom, healthcare, energy, automotive, and others. The food & beverage segment dominated the industry in 2021 and accounted for the largest share of 19.4% of the overall revenue. The segment is expected to continue its dominance throughout the forecast period. This can be attributed to the increasing demand for and adoption of TCI in the food & beverage sector. Moreover, narrow margins and bankruptcies are common occurrences in the industry.

Risks include changing consumer expectations, such as the drive for higher-quality ingredients, which poses a potential problem too. Many sophisticated food and drink businesses are using credit solutions and it has been a lifeline for many businesses. 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 another major industry facing uncertainties due to rapid technological advancements, changing consumer tastes, government regulations, and relative pricing.

Coverage Insights

On the basis of coverage, the global industry has been further segmented into whole turnover coverage and single buyer coverage. The whole turnover coverage segment dominated the industry in 2021 and accounted for the largest share of 62.2% of the overall revenue. The segment is projected to expand further at a steady CAGR retaining its leading position throughout the forecast period. 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.

Global trade credit insurance market share, by coverage, 2021 (%)

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 the fastest growth rate during 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 both economic and political threats.

Regional Insights

Europe accounted for the largest revenue share of 32.3% in 2021 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 U.K. 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 U.K.

Trade Credit Insurance Market Trends by Region

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 July 2020, Euler Hermes and Bisnode signed a strategic cooperation contract. Under this contract, Bisnode was expected to provide international and national data supporting the servicing of credit insurance delivered by Euler Hermes in Poland. Owing to this contract Euler Hermes’ clients gained the chance to access the largest databases together with real-time access and comprehensive updates.

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 the leading B2B information services 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 are:

  • Allianz Trade

  • Atradius N.V.

  • Coface

  • American International Group, Inc.

  • Zurich

  • Chubb

  • QBE Insurance Group Limited

  • Great American Insurance Company (FCIA)

  • AON plc

  • Credendo

Trade Credit Insurance Market Report Scope

Report Attribute

Details

Market size value in 2022

USD 8.58 billion

Revenue forecast in 2030

USD 19.85 billion

Growth rate

CAGR of 11.1% from 2022 to 2030

Base year for estimation

2021

Historical data

2017 - 2020

Forecast period

2022 - 2030

Quantitative units

Revenue in USD million and CAGR from 2022 to 2030

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Enterprise size, coverage, application, end-user, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; U.K.; Germany; France; China; India; Japan; Brazil; Mexico

Key companies profiled

Allianz Trade; Atradius N.V.; Coface; American International Group, Inc.; Zurich; Chubb; QBE Insurance Group Ltd.; Great American Insurance Company (FCIA); AON plc; Credendo

Customization scope

Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional, and segment scope

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options

 

Global Trade Credit Insurance Market Segmentation

This 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 the purpose of this study, Grand View Research has segmented the global trade credit insurance market report based on enterprise size, coverage, application, end-user, and region:

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

    • Large Enterprise

    • Small & Medium Enterprise (SME)

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

    • Whole Turnover

    • Single Buyer

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

    • Domestic

    • International

  • End-user 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

      • U.K.

      • Germany

      • France

    • Asia Pacific

      • China

      • India

      • Japan

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

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