United Kingdom

The Credit Insurance Market

The credit insurance market is estimated at around $6.0 billion premium by the International Credit Insurance and Surety Association.

Historically the portfolio market has been dominated by the top three global credit insurers; Euler Hermes, Atradius and Coface. While these carriers continue to dominate, there are smaller, more agile insurers whose market share is increasing. Some of these particularly focus on single risk solutions for selected portfolios and gap coverage through Top Up and Excess structures.

London’s pre-eminence as a world finance and trade centre has resulted in a sophisticated and competitive Trade Credit Insurance market.

The insurers listed here are rated by agencies such as Moody’s and Standard & Poor’s at an investment grade level and provide a range of policies to protect the seller against most of the risks that cause payments to fail. Usually referred to as Trade Credit Insurance, Credit Insurance or Bad Debt Insurance, cover falls broadly within two risk categories:

Commercial Risk Insurance: Covers non payment of debts due to insolvency (administrative receivership, bankruptcy, liquidation) or protracted default (failure to pay for goods or services provided in accordance with a contract).

Political Risk Insurance: Included on policies with an export component to cover situations where the actions of government cause the payment failure. Examples include public buyer default, export restrictions, import restrictions, political events, foreign currency shortages or restrictions, in-convertibility, contract termination and contract frustration.

 

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