Trade credit insurance and surety: the evolution in 10 years time - Trade Treasury Payments

• Home
• Blog
• Articles
• Trade credit insurance and surety: the evolution in 10 years time

Trade credit insurance and surety: the evolution in 10 years time

The worlds of 2015 and 2025 present a fascinating contrast in terms of technological advancements, societal shifts, and global challenges. 

In 2015, key technologies such as smartphones, social media, and cloud computing were already significantly shaping communication and information sharing. Smart devices were gaining traction but not yet fully integrated into daily life. Global issues such as climate change, political instability, and economic disparities were pressing concerns, but the urgency for action was often overshadowed by regional instability and immediate crises. Time Magazine’s Person of the Year was Angela Merkel, Germany’s then-chancellor; Caitlyn Jenner emerged as a female fashion icon; and Ye still went by the name Kanye. Barack Obama was mid-way through his second term as US president, and Vladimir Putin was into his third term as president of Russia (as he still is).

By 2025, the world has seen a remarkable evolution in technology and its impact on society. The proliferation of artificial intelligence (AI) and advanced robotics has transformed industries. Social media has become even more integral to personal and professional life, influencing everything from marketing strategies to political movements. This influence is just as apparent in the underwriting of trade credit insurance and surety.

Moreover, there has been a heightened focus on sustainability and climate action, driven by the recognition of environmental impacts and the need for a greener economy. This shift reflects a collective societal awareness that was still developing in 2015. This has found its way into underwriting guidelines of the trade credit insurance and surety industry. Even as political taste for green issues waxes and wanes over time, cover for heavily polluting industries has become increasingly hard to find as insurers have become much more conscious of the effects of their covers in that area. 

Meanwhile, a trend that has continued throughout this time—and well before—is the support credit insurers provide to SMEs as the beating heart of the economy. SMEs make up a majority of the policyholders for many insurers, particularly in markets where trade credit insurance is well established and part of business-as-usual. The economic health of this segment has been a growing focus of governments in recent years, with many now seeing credit insurance as a key tool for boosting resilience and facilitating access to finance. 

In 2015, very few people had heard of coronaviruses, and fewer still cared about them. The COVID-19 pandemic had major effects on society at large, wreaking havoc on everyday life. Beyond this, its effects have also been widespread. Working from home in 2015 primarily took place on the weekends or evenings. Business continuity plans sat in drawers, having been formulated but not tested in the real world. Now, flexible working arrangements are a core part of what employers offer in the workplace. 

Trade credit insurance and surety markets were also not free from impacts. Government interventions to limit the impact of business insolvencies on the economy saw credit insurance schemes introduced in several countries. While showing some early benefit in maintaining confidence in markets, interventions likely lasted too long before markets could return to normal. Lessons learned for a future crisis we hope aren’t needed any time soon. 

Someone who had gone into hibernation in 2015 and woke up today would hardly recognise the geopolitical landscape. In 2015 ongoing and expanding globalisation was the accepted wisdom, and contrary voices seemed fringe and radical at best. Supply chains were built on the basis of the “just in time” principle. Trade credit insurance followed this trend with its clients and met the demands of the economy. By 2025, there has been a noticeable re-polarisation as tensions between major powers pose significant challenges. Global cooperation seems to have been reduced, judging by the 62 resolutions adopted by the UN Security Council, compared to 46 in 2024. Trade flows have definitively started to shift. 

Trade credit insurance has undergone notable changes over the past decade. In 2015, it was primarily viewed as a safety net for businesses engaging in domestic and international trade. It provided protection against the risk of non-payment by buyers, particularly for exporters operating in volatile markets. Insurers relied heavily on historical data and traditional risk assessment methodologies to determine coverage and premium rates. 

By 2025, the trade credit insurance landscape has adapted significantly to the dynamic nature of global trade. Advances in Big Data analytics, artificial intelligence, and machine learning have enriched risk assessment processes, allowing insurers to offer more tailored coverage based on real-time information and predictive modelling. This development has enabled businesses to better understand their risk exposure, leading to a more proactive approach to credit management. Moreover, the aftermath of the COVID-19 pandemic emphasised the necessity for businesses to reassess their risk strategies. Companies have become more aware of the importance of trade credit insurance in safeguarding cash flow and ensuring operational resilience, driving increased adoption across various industries.

In addition, the regulatory environment surrounding trade credit insurance has evolved by 2025. There has been a stronger emphasis on transparency and accountability, prompting insurers to enhance their reporting practices and risk communication with clients. The integration of technology in policy management and claims processing has streamlined operations, making it easier for businesses to navigate and use their insurance options. This shift not only improves efficiency but also fosters greater trust in the trade credit insurance system.

In 2015, some cooperations were beginning to take shape between the banking industry and trade credit insurance and surety companies. In 10 years’ time, this has become a major instrument for banks to mitigate risk. It has become a mechanism for capital relief for the banking community. This partnership has channelled much-needed money into the real-world economy safely and efficiently. In 2023  it was the second most used methodology for banks to mitigate risk, according to the IACPM. The outlook for this segment has become somewhat blurred in selected geographies due to the implementation of new Basel rules. The risk of regulatory divergence between markets (the EU, UK, US, and beyond) on this topic also has implications for banks and insurers, as well as the businesses that rely on financing supported in this way. 

Developments to increase the flow of funds to narrow the financing gap in developing economies have once again put the spotlights on trade credit insurance as an enabler. Green shoots are sprouting in Asia as well as Sub-Saharan Africa.

Looking ahead, the role of trade credit insurance is likely to continue expanding, particularly as global trade becomes more interconnected and subject to fluctuations. The growing emphasis on sustainability and ethical business practices will also influence the future of trade credit insurance, leading to products specifically designed to cater to environmentally and socially responsible companies. 

In summary, the evolution of trade credit insurance from 2015 to 2025 highlights an industry that has become more responsive to market dynamics, leveraging technological advancements to provide robust and adaptable coverage for businesses operating in an increasingly complex trade environment.