Increased demand for trade credit insurance

Demand for trade credit insurance skyrocketed last year, and insurers are more cautious about what they will cover and the charge for the coverage, Marsh says in a recent report, As Global Economic Recession Deepens, Businesses Look to Protect Revenue Streams.
The report notes U.S. firms marketing their goods and services for export or to vulnerable industries are increasingly seeking trade credit insurance to guard against the possibility of a default by their business partners. This comes as a growing number of U.S. manufacturers and distributors look for effective ways to protect their revenue streams in a global economic recession.
But increased demand for trade credit insurance has some insurers second-guessing the risks they are willing to underwrite. And some are declining a significant percentage of applications for this coverage, Marsh notes.
In particular, many insurers are shying away from programs aimed primarily at industries severely affected by the downturn as they look for ways to manage their trade credit risk portfolios.
Furthermore, insurers are also charging up to 20-30% more to renew existing policies and demanding larger deductibles and higher coinsurance, Marsh adds.
Greater attention is also being focused on smaller and less complex exposures.