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Strategic growth in manufacturing: the role of trade credit insurance

The article highlights how trade credit insurance helps manufacturers navigate economic challenges, protect cash flow, and drive strategic growth amid uncertainty.

18/06/2025 · 9 minute read

Manufacturers are navigating an increasingly complex and turbulent environment marked by staffing shortages, volatile raw material prices, rising operational costs, and global supply chain instability. These mounting pressures, compounded by sudden policy shifts such as tariffs and changes introduced in the recent budget, are particularly critical for manufacturing—an industry operating on thin margins and long production cycles.

The outlook for the sector remains uncertain, with manufacturing among the five industries hardest hit by insolvencies. In 2024, there were 23,872 registered company insolvencies, a slight decrease from 2023 but high relative to historic levels. [1]

Customer insolvency: a strategic threat

In this uncertain landscape, the risk of customer insolvency and delayed payments has become more than just a financial inconvenience; it's a strategic threat. Trade credit insurance offers you a lifeline by safeguarding against non-payment and unlocking growth potential through smarter risk management.

Mounting pressures and geopolitical volatility

The UK manufacturing sector is already braced for a tough 2025. Budgetary changes, such as increased employer National Insurance Contributions (NICs), add further pressure to strained margins. Meanwhile, the geopolitical backdrop continues to shift rapidly. The unpredictable nature of tariffs, especially those affecting inputs sourced globally, is an uncontrollable overhead.

Cash flow resilience offers a competitive advantage

You'll undoubtedly be familiar with operating within fixed supply contracts and long lead times, limiting your ability to pass on rising costs. Cash flow resilience becomes critical. Trade credit insurance can help you avoid cash flow shocks by ensuring you're compensated for unpaid invoices, even if a customer suddenly becomes insolvent. This support is especially vital when working with new or unfamiliar customers, domestically or in new international markets.

Shifting business priorities amid economic uncertainty

Recent data from Marsh's report "The Balancing Act: How UK Businesses Are Fuelling Growth and Navigating Risk in Uncertain Times" highlights the urgency of support tools like trade credit insurance. 87% of finance directors surveyed say they have found it more challenging to grow their businesses in the past 12 months. To manage cash flow, many extend more generous credit terms to customers than usual, often at the expense of traditional credit risk discipline.

Similarly, 86% of sales leaders report that the current economic environment has made business growth more difficult. These statistics underline a critical shift: revenue continuity is being prioritised over credit caution in the face of rising uncertainty.

In this context, trade credit insurance delivers tangible benefits. According to the same report, business leaders overwhelmingly agree that trade credit insurance is important in the current climate. Companies with this cover report feeling more resilient, optimistic, and better equipped to compete on pricing and service, advantages that are vital in fast-changing and competitive markets.

Growth strategies

In today's economic climate, protecting receivables is no longer just about minimising losses. It's about opening opportunities to enable bold, strategic growth. As you look ahead to 2025 and beyond, consider three key growth strategies:

  1. Expanding sales with existing customers:  Deepen relationships with current clients. Doing so often means increasing credit limits—essentially extending more trust. Trade credit insurance allows you to do this confidently, knowing that your exposure is covered if something goes wrong.
  2. Growing with new customers in existing markets: Bringing new clients on board brings fresh revenue and heightened risk, especially without established payment histories. Trade credit insurance supports better decision-making by offering real-time insights into customer creditworthiness beyond what historical data alone can provide. 
  3. Entering new markets: International growth presents enormous opportunities and significant risks. If you're entering new regions, you may face unfamiliar legal frameworks and struggle to verify buyer reliability. Credit insurance helps bridge that trust gap, allowing you to trade across borders confidently. If a buyer defaults, the insurer steps in.

Supporting supply chain continuity

Trade credit insurance is an effective tool for maintaining supply chain stability. When one link in the payment chain breaks, it can trigger a cascade of delayed payments, production halts, and reputational harm. By ensuring that you get paid even when customers default, credit insurance helps preserve supplier relationships and continuity of production.

Confidence to grow

This isn't just about protecting balance sheets. It's about positioning your business for resilience and growth in a competitive global environment. The intelligence provided by insurers, incentivised to track creditworthiness in real-time, adds a further layer of advantage. Unlike traditional data sources such as Companies House, trade credit insurers continuously monitor clients' payment performance and financial health, giving you the timely information you need to make informed decisions.

Looking ahead

For automotive original equipment manufacturing (OEM), aerospace and defence, and heavy manufacturing sectors, trade credit insurance represents more than risk mitigation—it's a strategic growth enabler. As you navigate the industry’s various challenges and opportunities, ask yourself how to protect yourself against risks of customer insolvencies and unpaid invoices and how to embrace and prepare for the next stage of growth. Trade credit insurance can play a pivotal role in that journey.

[1] https://www.gov.uk/government/statistics/company-insolvencies-december-2024/commentary-company-insolvency-statistics-december-2024

Our people

Ian Leslie

Ian Leslie

Managing Director, Trade Credit UK, Credit Specialties, Marsh Specialty

  • United Kingdom

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