Trade Credit Insurance Market is expected to reach US$ 27.56 Billion by 2031

Surge in Business Insolvencies Boosts Trade Credit Insurance Market Growth

According to our latest study titled “Trade Credit Insurance Market Forecast to 2031 – Global and Regional Share, Trend, and Growth Opportunity Analysis - by Enterprise Size, Application, and End User,” the market was valued at US$ 14.19 billion in 2023 and is projected to reach US$ 27.56 billion by 2031; it is estimated to register a CAGR of 8.7% from 2023 to 2031. The report includes growth prospects in light of current trade credit insurance market trends and driving factors influencing the market growth.

Business insolvency occurs when a company fails to meet its financial obligations or pay its due bills, which can lead to bankruptcy or legal proceedings. The increasing cases of business insolvencies surge the adoption of trade credit insurance among businesses to safeguard them against insolvency and maintain cash flow. For instance, according to the Allianz Trade report published in February 2024, the number of bankruptcies grew by 7% in 2023, and it is expected to increase by 9% by the end of 2024. The company also predicts that the number of bankruptcies worldwide is projected to remain high by the end of 2025; this is due to delays in construction and real estate projects. Similarly, according to The Group Coface data published on April 2024, the insolvencies rate in Central & Eastern Europe (CEE) countries was highly significant in 2023. These countries witnessed approximately 38.6% rise in insolvency records from 2022 to 2023 owing to the consequences of Russia's invasion of Ukraine. The growing cases of insolvencies in CEE countries are associated with low economic performance, which is caused by disrupting supply chains, geographical proximity, labor shortages, surges in energy prices, and high input costs. This increases the demand for trade credit insurance among businesses across construction, real estate, hospitality, transport, and retail industries to decrease concentration risk, reduce bad debt reserves, and maintain cash flow. Trade credit insurance also helps businesses by protecting their disrupted cash flows. Thus, the increasing cases of business insolvencies are contributing to the growing trade credit insurance market size.

Trade Credit Insurance – by Region, 2023 and 2031

Source: The Insight Partners Analysis

The trade credit insurance market analysis has been carried out by considering the following segments: enterprise size, end user, and application. Based on enterprise size, the trade credit insurance market is segmented into SMEs and large enterprises. On the basis of application, the market is divided into domestic and international. Based on end user, the trade credit insurance market is segmented into energy, automotive, aerospace, chemicals, metals, agriculture, food and beverages, financial services, technology and telecommunications, transportation, and others. Furthermore, the energy segment held the largest trade credit insurance market share in 2023.

The scope of the trade credit insurance market report is primarily divided into North America (US, Canada, and Mexico), Europe (Spain, UK, Germany, France, Italy, and Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America). Europe accounted for the largest trade credit insurance market share in 2023. The Europe trade credit insurance market is segmented into Germany, France, the UK, Italy, Russia, and the Rest of Europe. Businesses in Europe are facing a high number of insolvencies associated with financial instability; also, they are experiencing a risk of recession that created supply chain complexities. These factors are driving the market in Europe as businesses are highly demanding and adopting trade credit insurance to make timely payments by improving customer relationships. For instance, according to a report published by Allianz Trade in April 2023, the insolvency rate in Western Europe has increased by 20% in 2023 for the third consecutive year (5% in 2020, 22% in 2021, and 3% in 2022). This makes Western Europe a major contributor to the trade credit insurance market. Similarly, according to COFACE SA data of April 2024, Central & Eastern Europe has also observed 38% increase in insolvency proceedings from 2022 to 2023. Moreover, the high cases of business bankruptcies increase the demand for trade credit insurance for credit controlling, reducing bad debt, and enhancing working capital. For instance, according to European Union (EU) data published on April 2023, the number of bankruptcy declarations of EU businesses increased for the sixth quarter in the second quarter of 2023, as compared to the previous quarter. The number of bankruptcies increased by 8.4% in Europe from 2015 to the second quarter of 2023. Thus, the increased risk associated with bankruptcies fuels the trade credit insurance market growth in Europe.

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 are among the key players profiled in the trade credit insurance market report.

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