The Swiss Re Institute has published a new article suggesting that global trade credit insurance (TCI) premiums will continue to grow, despite economic slowdown, helped by elevated counterparty risks and the development of new trade arrangements which will inevitably make supply chains more complex.

“We expect TCI to grow, even as world trade volume flows slow,” writes Li Xing, head of insurance market analysis with the Swiss Re Institute. Xing further writes that the World Trade Organization has lowered its forecast for merchandise trade growth to just 0.8 per cent, down from 1.7 per cent it had forecast in April 2023. “The cut is no surprise given current economic slowdown, which we expect will continue into and through 2024.” 

Global TCI premiums are expected to grow around six per cent to an estimated USD $14.1-billion in 2023 and to $14.8-billion in 2024. (All figures in USD.) This follows a 7.3 per cent year-over-year increase to $13.3-billion reported in 2022. “Growth will be largely based on premium rate increases,” they add.

The development of new trade arrangements, geopolitical flux, trade and economic uncertainty are all discussed in the report, as well. “This greater complexity of supply chains will raise the profile of counterparty risk and the need for TCI protection,” Xing writes. “New regional and bilateral agreements will see a reallocation of trade resources, in turn giving rise to trade creation and boost demand for but TCI and credit surety insurance.”