Trade Credit Insurance

The Trade Credit Insurance Market

Trade credit insurance is a proven product whose history in supporting trade dates back over 100 years.   Many of the most active insurers that cover the market today, however, were established between 1925 and 1946.  Trade credit insurance has had wide market acceptance in the U.S. for more than 25 years and in Western Europe for more than 50 years, with the most rapid growth occurring here over the past 15 years.  There are two primary sources of trade credit insurance:  private sector insurance companies, and the federal government. 

The Private Sector:

The three largest and oldest private insurers are European-based companies, due to the fact that the trade credit insurance market developed much earlier and more rapidly in Europe.  Given the size of most European countries, combined with their own unique political and legal systems, companies there were forced to develop their export business to fuel sales growth much sooner than their U.S. counterparts. To achieve this growth, they had to offer more competitive payment terms.  In today’s global marketplace, companies sell to international buyers and face competition from suppliers located across the globe.  The ability to offer competitive terms is a requirement for a company to effectively compete against foreign competition.  The trade credit insurance market has evolved and expanded and there are now several private insurance players, offering many alternatives to companies. Please see "Featured Insurance Carriers" for a representation of our active insurance partners. 

The Public Sector:  

The Export-Import Bank of the United States (Ex-Im Bank) is the official Export Agency (ECA) of the U.S. government.  Most developed countries have an ECA whose charter is to support export sales from their host country.  The export-only insurance policies that Ex-Im Bank offers carry the full faith and credit of the U.S. government.  One of Ex-Im Bank’s important initiatives is to support small business exporters.  They also tend to provide coverage in difficult markets where the private insurance market is unwilling or unable to do so.  Ex-Im Bank’s insurance programs require that the transaction(s) meet certain criteria to be eligible for cover:

  •  More than 50% of the product’s total cost must be U.S. content.
  • The shipment must be to a buyer located outside the U.S.
  • The payment obligation must be with a foreign-based buyer.
  • The export product cannot be sold to a military or quasi-military buyer.