A trade credit insurance buying opportunity

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The global trade credit insurance (TCI) market presents a striking contradiction in early 2026. According to Marsh Risk's proprietary TCI data tool, MiCredit:

Pricing has reached historic lows — average premium rates have fallen 9.2% so far this year.
Insurer appetite remains strong — risk acceptance rates have declined just 1 percentage point year-over-year (YoY) to an average of 73.59%.
Claim levels are rising from recent lows — global insolvencies are forecast to rise.

This combination of factors suggests a unique buying opportunity that may not last: coverage per premium dollar remains well above the six-year average — but rising insolvencies and buyer credit quality deterioration could drive future rates higher.

The pricing opportunity

According to MiCredit, we continue to see significant value in TCI.

Figure 1: Value of TCI (US$1 premium buys $X of cover)

Source: Marsk Risk MiCredit platform, average based on minimum premium and total coverage for all whole-turnover policies

As a result, each dollar of premium now supports US$699 of cover, the highest mark in the last six years since we started monitoring in 2015. In practical terms, insurers are carrying more risk per unit of revenue collected — leaving less cushion if claims rise. For buyers, value remains: current coverage per premium dollar sits above the five-year average, even as the conditions that supported this pricing have begun to erode.

Global industry surveys of insurers conducted in 2025 confirm that capacity expanded substantially across the trade credit market from 2022 to 2025. For now, over half of surveyed professionals expect premium growth to slow, with excess capacity and a high level of insurer competition preventing rate increases until a significant loss event.

For buyers of TCI, this pricing environment represents a strategic window — one where every dollar of premium purchases more protection than ever, even as the conditions sustaining current pricing have begun to erode.

Global insolvencies are rising

Most notably, claims activity is increasing following recent lows. Market data reinforces this: the number of claims fell from 227 in 2023 to 136 in 2025 and the total value of claims rose 9.4% year-on-year from US$400.8 million in 2024 to US$438.5 million in 2025 — indicating that average claim severity is rising even as frequency moderates.

Global business insolvencies rose 6% in 2025 and are forecast to climb a further 5% in 2026 — a fifth consecutive year of increases that would see bankruptcies rise 24% above pre-pandemic averages. The US recorded a 22% increase in business bankruptcy filings in 2024 — the highest level since 2017 — with filings rising a further 7.1% in 2025.

One major global trade credit insurer reported a loss ratio deterioration of over 5 percentage points YoY in the first half of 2025, alongside a 50% increase in proactive limit interventions — actions such as reducing or cancelling buyer credit limits in response to deteriorating creditworthiness.

This emerging pattern has many similarities with prior trade credit loss cycles: claims can remain within tolerance levels as conditions deteriorate, with limited pricing impact until a macro shock causes defaults to cluster, at which point both frequency and severity can escalate simultaneously.

MiCredit data suggests insurers are not standing still — not by raising pricing, but through exposure monitoring as a first step. Insurers' portfolio credit risk has increased: the weighted average risk grade (WARG) — scored on a 1-to-10 scale, where 1 represents the lowest risk and 10 the highest — has moved from a relatively stable 4.45 to 5.20 as of February 2026, indicating a meaningful readjustment.

Systemic risk: the forces that could trigger change

The TCI market appears to be in tension: low premium rates versus rising claims.

The following section examines three systemic and plausible developments that could serve as the potential trigger for a broader repricing event, and which could firmly close the current buying opportunity.

Geoeconomic fragmentation: The International Association of Insurance Supervisors 2025 report singles out TCI as the only underwriting line where risks exceed the low-to-medium range. These risks are driven in part by the hard-to-model risk of new trade barriers, sanctions, and export restrictions that could trigger counterparty defaults not as predictable based on historical data.

The current tariff environment is amplifying this: industry outlooks note that tariffs are squeezing corporate margins and increasing non-payment risk in export-oriented sectors.

Corporate credit quality: In late 2025, a major subprime auto lender collapsed amid alleged fraud involving nearly US$1 billion in asset-backed loans, while a large auto parts manufacturer filed for Chapter 11 after off-balance-sheet structures concealed leverage closer to 20x than the reported 5x.

The official private credit default rate — which counts only outright missed payments — remains below 2%. However, once distressed restructurings and liability management exercises are included, the effective rate of credit stress approaches 5%.

For businesses trading on open credit terms with counterparties funded through these structures, the risk is clear: traditional credit signals (ratings, public filings, bank lines) may lag reality, and a buyer that appears creditworthy today could default with little warning.

AI bubble scenario: Atradius Insurance has modelled a downside scenario in which confidence in AI returns falters: in the firm’s scenario, US tech stocks decline approximately 25% in 2026, consumer spending contracts as household wealth erodes, and tech investment falls comparably to the 2001–2002 dotcom bust. The estimated impact: approximately 1 percentage point trimmed from global GDP in 2026 and a further 0.5 points in 2027, with the US bearing a cumulative 2 percentage points of lower growth.

For buyers and potential buyers of TCI, this scenario represents the type of global loss event that industry surveys have identified as a force likely to reverse the current attractive pricing environment, as a sharp US contraction could cascade through supply chains, increasing counterparty defaults across sectors.

TCI – Your risk mitigation tool

The current market presents a rare alignment of factors that strongly favours trade credit insurance buyers.

Rising need: Global business insolvencies are at their highest since 2010. Private credit opacity is also increasing counterparty risk across global supply chains.
Closing window: Insurers are showing some signs of rate increases and while risk appetite is still at high levels, you can see a rebalancing of risk ratings that could be a precursor for a swift increase in rates. When losses materialise, repricing may be swift.
Systemic tail risks: An AI bubble correction, trade war escalation, or cascade of private credit defaults could trigger a repricing that simultaneously increases the cost and reduces the availability of coverage.

Bottom line: TCI is priced at recent lows while the risks it protects against are trending toward multi-year highs. Each dollar of premium now supports US$699 of cover — up from US$430 in 2023 — even as estimated futures premiums have contracted. But conditions change, and it is often only when they do that many would-be buyers enter the market, too late to benefit from the most attractive pricing. Businesses that secure coverage at today's rates are likely to lock in protection at a fraction of what it would cost if rates increase.