Trade Credit Insurance: Still Open for Business, But on New Terms
For decades, trade credit insurance (TCI) has functioned as one of the quiet yet indispensable pillars of global commerce. It gives exporters and traders the confidence to extend credit, enter new markets, and absorb the risks that inevitably come with cross-border transactions — most notably, the risk of non-payment. Without it, many businesses simply would not take the leap into international trade.
But the landscape is shifting. While TCI capacity remains broadly available, the conditions under which insurers are willing to deploy that capacity have changed considerably. Underwriters are applying stricter standards, asking harder questions, and paying much closer attention to how deals are structured and how transparently risk is presented. In short, credit is still available — but you have to earn it.
A Market Still Growing, But Under Greater Scrutiny
The global TCI market is expected to expand significantly over the next decade. Rising trade volumes, increasing supply chain complexity, and a heightened awareness of payment risk are all fuelling demand for credit protection tools. Much of this momentum is being driven by the Asia-Pacific region, with China in particular deepening its footprint across international supply chains — a development that introduces both opportunity and exposure for counterparties around the world.
Despite this growth trajectory, insurers are not writing policies with the same relative ease they once did. The combination of macroeconomic uncertainty, geopolitical disruption, and a run of high-profile defaults in recent years has prompted underwriters to look more carefully before they commit. The capacity is there. The appetite, however, now comes with conditions attached.
Stricter Underwriting: What Insurers Are Looking For
The shift in underwriting behaviour is not about pulling back from the market — it is about raising the bar for entry. Insurers are focusing on three core areas when assessing new applications and renewals: transparency, deal structure, and the depth of due diligence presented.
Transparency is arguably the most critical factor. Insurers want to understand the full picture of a transaction, including the financial health of the buyer, the nature of the trading relationship, payment history, and any concentrations of risk. Applicants who come to the table with complete, well-organised documentation are consistently better positioned than those who leave gaps for underwriters to fill in themselves.
Deal structure matters too. Insurers are scrutinising how risk is allocated across a transaction, whether appropriate collateral or security is in place, and whether the credit terms being extended are realistic given the buyer's financial position. A well-structured deal signals that the insured party has done their homework and is managing risk responsibly — both of which make the insurer's job considerably easier.
Due diligence, finally, is no longer a box-ticking exercise. Underwriters expect evidence that the applicant has genuinely investigated the counterparty and the market in which they operate. Where that evidence is thin, so too is the likelihood of coverage being approved on favourable terms.
The Broker's Evolving Role: Interpreters of Risk
As underwriting standards tighten, the role of the broker has grown more complex and more valuable. Brokers are increasingly acting not just as intermediaries, but as interpreters of risk — helping their clients understand what insurers need, and helping insurers understand what clients are actually trying to accomplish.
This interpretive function is particularly important when information gaps exist. A trading company may have a strong underlying business case for coverage, but lack the documentation or financial reporting sophistication to make that case effectively to an underwriter. An experienced broker can bridge that gap, translating commercial realities into the language that insurers are looking for, and positioning risk in a way that increases the likelihood of a positive outcome.
For businesses operating in emerging markets or newer trade corridors, where counterparty data may be limited and local credit information is harder to obtain, broker expertise can be the difference between securing coverage and walking away empty-handed. The broker's ability to navigate complexity has become a genuine competitive advantage for clients in a more demanding market.
ESG: From Checkbox to Core Underwriting Factor
Perhaps the most significant structural change in the TCI market over recent years is the growing weight given to environmental, social, and governance (ESG) considerations in underwriting decisions. What was once a peripheral concern has moved firmly into the mainstream — and in certain sectors, it has become a decisive factor.
The energy transition is one area where this is playing out most visibly. Insurers are increasingly cautious about providing coverage to transactions that involve fossil fuel infrastructure or activities that conflict with their own ESG commitments. At the same time, they are taking a keener interest in the supply chains that feed the clean energy economy — including critical minerals such as lithium, cobalt, and rare earth elements.
These supply chains carry their own set of ESG risks, from environmental degradation at extraction sites to questions of labour standards and governance in the jurisdictions where mining takes place. Insurers are asking about these risks directly, and applicants who cannot demonstrate responsible sourcing and supply chain visibility are likely to encounter more difficult conversations at the underwriting stage.
For businesses operating in these sectors, the message is clear: ESG is no longer a reputational consideration sitting alongside your insurance strategy. It is embedded within it.
How to Position Yourself in a More Selective Market
Understanding what the market now demands is the first step. Acting on that understanding is the harder part. Businesses looking to secure or renew trade credit insurance in this environment should consider the following priorities:
- Invest in documentation quality. The more clearly and completely you can present your counterparty risk and transaction structure, the better your conversations with underwriters will go. Incomplete submissions invite delays and unfavourable terms.
- Engage your broker early. Brokers are most useful when they are involved from the outset of a transaction, not brought in at the last minute to rescue a struggling application. Early engagement allows them to shape the presentation of risk effectively.
- Take ESG seriously as an underwriting input. Review your supply chain practices, assess where your exposures lie in relation to ESG risk, and be prepared to discuss those issues openly with your insurer. Transparency here, as elsewhere, is rewarded.
- Understand your buyer's financial position. The strength of your coverage depends heavily on the creditworthiness of the buyer you are insuring against. The more you know about their financial health, the stronger your application.
The Bottom Line
Trade credit insurance remains a vital tool for businesses navigating the complexities of global trade. The market has not closed — but it has matured, and the terms of participation have changed. Insurers are asking more of applicants, brokers are being called upon to do more for their clients, and ESG considerations are reshaping what responsible risk looks like in the eyes of the underwriting community.
For businesses that engage with this new reality thoughtfully and proactively, credit is still very much available. The question is whether they are willing to meet the market where it now stands.