In 2023, short-term trade credit insurance (TCI) backed a remarkable 15.07% of global trade—equivalent to €8.5 trillion. This milestone demonstrates the vital role TCI plays in facilitating international trade. With over €15 billion in premiums generated last year, the sector continues to be a cornerstone of global trade, supporting businesses in an increasingly uncertain world.
A private sector powerhouse
The majority of short-term TCI—72% of the coverage—is provided by private sector insurers, defying the widespread assumption that state-backed support dominates the industry. This dynamic mix of public and private capacity fosters innovation and competition, enabling the industry to offer tailored solutions for businesses of all sizes. Together, private insurers and state-backed programs complement each other, ensuring comprehensive risk management across diverse trade scenarios.
Growth across markets, but gaps remain
Trade credit insurance is expanding its reach. Last year, the penetration rate of TCI increased to 15% of global trade transactions. This growth highlights the sector’s ability to adapt to rising demand for risk mitigation in a volatile economic and geopolitical climate. However, the benefits of TCI are not evenly distributed. Advanced economies in Europe and Australia lead in adoption, while North America continues to grow steadily. Meanwhile, much of the developing world lags behind, facing barriers to accessing specialized financial services. By advancing digital trade solutions, such as electronic trade documents and paperless customs processes, industry can help bridge these gaps. These innovations will not only support deeper trade ties but also provide insurers with richer data for better underwriting decisions.
Protecting businesses and securing trade
Non-payment of invoices remains one of the most significant risks businesses face. Whether it’s a default by a domestic buyer or an international trading partner, such events can cause financial turmoil, even for well-established companies. TCI acts as a shield, absorbing these risks and ensuring businesses can continue to operate smoothly. By providing protection against non-payment, TCI gives businesses the confidence to invest in growth without tying up resources in provisions for uncollectable receivables. It also helps companies access external financing, as banks often view credit-insured receivables as more secure assets. With comprehensive turnover policies or coverage for individual transactions, TCI is a lifeline for companies navigating complex trade environments.
Unique insights
As the global leader representing the majority of premium underwritten in private trade credit insurance market ICISA is uniquely positioned to analyze the industry. Our findings are based on in-depth research, interviews, and proprietary data, which we benchmarked against global trade statistics from the World Bank. These insights showcase the crucial role TCI plays in stabilizing and growing global commerce.
Looking ahead: Strengthening global trade resilience
The demand for trade credit insurance will only grow as businesses confront an increasingly uncertain future. Geopolitical instability, ongoing supply chain challenges, and trade tensions are pushing companies to seek stronger protections. Europe’s competitiveness is also in sharp focus as the region faces rising tariffs from the U.S. and growing challenges from emerging economies like China. These factors reinforce the need for TCI as a key enabler of secure and sustainable trade.
As the voice of the trade credit insurance industry, ICISA is committed to driving innovation, promoting resilience, and ensuring businesses worldwide have the tools they need to thrive in a complex global economy.