Credit insurance on the upswing

Trade credit insurance protects sellers when a buyer fails to pay for goods or services delivered on credit. Demand for the product tends to rise when new sales channels change how merchants and customers transact.

The spread of online-to-offline commerce, where merchants sell directly to customers and extend payment terms digitally, has created new receivables that businesses want to protect. Investors backing these platforms also pay closer attention to credit risk in the supply chain.

For reinsurers, credit insurance is a cyclical line: losses can rise quickly in a downturn, so capacity is usually managed carefully through quota-share and excess-of-loss treaties. Growth in the line therefore depends both on demand from merchants and on reinsurers' appetite to support primary carriers through the cycle.