Trade Credit Insurance Market Size, Trends and Growth Analysis by 2027

The trade credit insurance sector is projected to grow significantly, with an anticipated market size of US$ 27.56 billion by 2031, up from US$ 14.19 billion in 2023. This growth represents a compound annual growth rate (CAGR) of 8.7% from 2023 to 2031.

Geographically, the global trade credit insurance market is divided into several regions: North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America. Among these, the Asia Pacific region is experiencing notable growth in 2023. This market is further segmented into countries such as China, India, Japan, Australia, South Korea, and the Rest of APAC. The anticipated growth rate in this region from 2023 to 2031 is substantial, driven by an increasing number of businesses implementing strategic credit management practices and the slow trade rates observed.

According to a report from the International Monetary Fund published in April 2024, the Asia Pacific region has been facing sluggish trade since 2023, primarily due to ongoing inflationary pressures affecting businesses. Factors such as the global decline in commodity and goods prices, monetary tightening, supply chain disruptions, and elevated interest rates are contributing to a heightened demand for trade credit insurance. This insurance serves as a protective measure against financial risks.

The rising incidence of business insolvencies in the Asia Pacific region is expected to present significant opportunities for the growth of the trade credit insurance market during the forecast period. A report by Atradius N.V. published in September 2023 indicates that the insolvency rate in the region is projected to rise in 2024, driven by increasing bankruptcy cases among firms, reduced government support, and a challenging financial environment. The report highlights alarming insolvency rates in countries such as Hong Kong (68%), South Korea (45%), Singapore (49%), India (50%), and Australia (45%), which are likely to create new opportunities for the trade credit insurance market.

The analysis of the trade credit insurance market has been conducted by examining various segments, including enterprise size, application, and end user.

In terms of enterprise size, the market is categorized into small and medium-sized enterprises (SMEs) and large enterprises. Large enterprises typically have extensive customer bases and often extend credit to their clients, which exposes them to financial risks from unpaid debts. Trade credit insurance acts as a safeguard against losses incurred due to customer insolvency or their inability to repay debts. This insurance instills confidence in businesses, allowing them to extend credit limits and operate smoothly without incurring financial risks.

Additionally, the surge in business insolvencies is a key factor driving the growth of the trade credit insurance market. The emergence of cloud-based trade credit insurance solutions is also expected to introduce new trends in the market in the coming years.

From an end-user perspective, the market is segmented into various industries, including energy, automotive, aerospace, chemicals, metals, agriculture, food and beverages, financial services, technology and telecommunications, transportation, and others. The energy sector currently holds the largest share of the trade credit insurance market in terms of revenue. This sector encompasses trades in oil, gas, and energy projects, where tight profit margins increase the risk of bad debts. Energy projects often involve significant financial commitments and complex supply chains, necessitating the use of trade credit insurance to mitigate risks associated with supplier defaults or disruptions. This insurance enables energy companies to offer competitive credit terms to both new and existing customers, facilitating business growth.

Key players in the trade credit insurance market include Allianz Trade, COFACE SA, American International Group Inc, Chubb Ltd, QBE Insurance Group Ltd, Aon Plc, Credendo, Atradius NV, Zurich Insurance Group AG, and Great American Insurance Company.

The forecast for the trade credit insurance market is based on a combination of secondary and primary research findings, including key company publications, industry association data, and various databases. Extensive secondary research has been conducted using both internal and external sources to gather qualitative and quantitative insights related to market growth. This process also aids in providing an overview and forecast of the market across all segments. Furthermore, numerous primary interviews with industry participants have been conducted to validate the data and gain analytical insights, involving industry experts such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants specializing in the trade credit insurance market.