Published on
10 September 2025
As the global economic and geopolitical landscape continue to evolve, so does the nature of financial risk and insurance priorities. Global trade is undergoing significant changes with the introduction of new tariff regimes and trade agreements reshaping commerce, redirecting trade flows and creating new patterns. These shifts bring a changing risk profile with them, one that credit (re)insurers must continually assess and adapt to.
Change in demand in trade credit insurance
The trade credit (re)insurance industry is feeling the weight of this change. With rising global insolvencies and several industries experiencing sluggish growth, credit risk is elevated. Yet, there is no significant uptick in new demand for credit insurance cover taken out by suppliers to protect them against buyer defaults. Due to global uncertainty, companies are reassessing their risk management strategies but not to the extent of driving a surge in policy uptake.
However, there are still meaningful growth opportunities in the trade credit market as insurers aim at a higher penetration into the SME sector, banks using credit insurance to mitigate default risk of large trade finance and receivables portfolios and bespoke solutions for B2B or B2C digital trading platforms. A potential change in the US bank regulation to qualify credit insurance for full capital relief could unlock huge demand for the product in the country.
Trade credit insurers will need to remain agile, offering flexible solutions without conceding on the very high credit quality of their portfolios in order to maintain relevance in a highly competitive market.
Rising opportunity in surety insurance
In contrast, the outlook for the demand for surety is optimistic. The growth is fuelled by significant local investment and a global shift toward infrastructure development. In the United States, the surety market is thriving, driven by a renewed focus on domestic capital investment and industrial growth. This expansion is creating abundant opportunities in infrastructure and public sector projects leading to a booming surety market.
The European market also shows strong potential. Germany’s recent announcement of a €500 billion infrastructure fund marks a change in its fiscal approach, likely to generate a significant increase in demand for surety. Similarly, the EU commitment to allocate five percent of its budget to defence by 2035 suggests a wave of new defence and infrastructure projects that will require private sector involvement and opening the door for a higher surety insurance demand.
Long term trends and way forward
While new market entrants are emerging in both lines, the dynamics are different: trade credit insurance as a discretionary product is challenged with unlocking untapped customer segments, whereas the largely compulsory surety product continues to attract steady and growing public demand.
The single transaction-based Credit & Political Risk Insurance (CPRI) market is also facing its own dynamics of change not discussed in this analysis.
At LM Re, we are committed to supporting clients across the spectrum of financial risks. Our long-term vision enables us to navigate shifts in the global market. By maintaining a strong expertise in trade credit, surety and CPRI along with other financial risk products, we are well-positioned to embrace evolving dynamics and provide clients with technical expertise and flexible reinsurance solutions.
