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Government Policies boost the Trade Credit Insurance Market -2020

The Global Trade Credit Insurance Market will reach USD 10 trillion in volume by 2030, increasing CAGR approximately 7% in a forecast period.

    A trade credit insurance policy allows companies to feel secure in extending more credit to current customers, or to pursue new, larger customers that would have otherwise seemed too risky. The protection it provides allows a company to increase sales to grow their business with existing customers. Insured companies can sell on open account terms where they may have previously been restrictive or only sold on a secured basis. For exporters, this especially can be a major competitive advantage.

    The impact of the pandemic has not yet increased the number of export credit insurance claims paid in the first half of 2020. However, insurers will see claims climb towards the end of the year, according to new research. 

     Major players in the market includes Atradius, Coface, Zurich, Credendo Group, QBE Insurance, Cesce, Allianz, Marsh, Aon, AXA, AIG, Zurich Insurance, PingAn, CPIC, Other.

     Jun2020, Atradius Payment Practices Barometer highlights importance of risk management to Asian businesses. COVID-19 containment measures around the world have impacted both national and international supply chains and trade. Responses to the 2020 Atradius Payment Practices Barometer (PPB) survey in Asia suggest the resulting delays in payments are largely being financed by suppliers as the use of trade credit in most markets surveyed, and along with it, payment delays, have climbed. Compared to last year’s survey, in four of the markets surveyed, credit-based sales grew an average of 14% while at the same time the value of overdue invoices spiked 56%.

     March 2020, the rating agency Moody's confirmed Coface’s Insurance Financial Strength (IFS) A2 rating on 27 March 2020. The outlook for this rating has been changed to negative. As part of its credit insurance sector review, the agency estimates that the progression of the coronavirus epidemic, and the measures taken by governments to slow its spread, represent a scenario of severe stress for credit insurers. It also underlines the mechanisms implemented by many governments to support SMEs, which could reduce the cost for credit insurers.

    Sept 2020, Credendo is pleased to announce the intended merger between its two specialised trade credit insurance entities, Credendo – Excess & Surety and Credendo – Single Risk, planned for the first semester of 2021. This change is part of Credendo’s vision of offering comprehensive trade credit insurance solutions available for all sizes and types of business and for risks in any location worldwide. . The new entity Credendo – Guarantees & Speciality Risks will fuel both businesses’ growth ambition. 

     Market Segmentation By types the market is divided into Factoring, Export Credit and Insurance. By applications it splits into Domestic and International. Geographically it splits into Europe, North America, MEA, Latin America, South America, and APAC.  In 2020, Countries like France, Germany and the Netherlands have introduced measure offering support to the trade credit insurance industry through guarantees backed by public funds, allowing insures to maintain limits and capacity. In turn insurers and creative tool that if adopted in other countries such as in Brazil could not only protect the credit insurance industry.

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