Geopolitical Risks Prompt Need for Trade Credit Insurance

The International Monetary Fund (IMF) has highlighted growing concerns in its April 2026 World Economic Outlook, predicting that ongoing conflicts involving the US, Israel, and Iran may significantly impact the global economy. This geopolitical unrest, combined with potential energy supply disruptions, is likely to slow global growth, exacerbating business risks such as non-payment. Oxford Economics also warns of a high probability of a global economic downturn.

For insurance professionals, the primary concern is the increasing risk of non-payment, which has made securing trade credit insurance increasingly urgent. Mark Coleman, Director of International Customs and Logistics (ICAL), noted that exporters are particularly worried. He reported that agribusinesses face heightened exposure due to the financial uncertainties of trading partners, with delays in payment causing cash-flow issues for exporters already operating on thin margins.

Importers face challenges as well, with the possibility of supplier insolvency during shipments presenting new risks. Coleman emphasized the need for proactive measures, advising brokers to research clients thoroughly and secure insurance for non-payment before issues arise.

According to Allianz Trade, global business insolvencies are projected to rise by 5% in 2026, continuing an upward trend for the fifth consecutive year. Factors driving this increase include the ongoing Middle Eastern conflict, which may result in an additional 15,000 global business failures over the next two years. The situation is particularly critical in regions like the US and China, expected to see insolvency rates climb by 8% and 10%, respectively.

Economic tensions in Australia and New Zealand are also of concern, where inflationary pressures from the Middle East may lead to higher interest rates by the Reserve Bank of Australia (RBA). Apolline Greiveldinger, an economist with Coface, highlighted how these factors could push insolvency figures higher in these regions as well.

As credit underwriters become more cautious, brokers are encouraged to act promptly. David Jovanov from Coface noted the difficulties in acquiring insurance coverage for at-risk customers, emphasizing the importance of early engagement and up-to-date risk data.

Supply chain disruptions compound these challenges, as trade routes are being altered due to logistical constraints. Shipments are now redirected through smaller ports, increasing exposure to risks such as currency fluctuations and inventory management. Despite these difficulties, opportunities arise for exporters capable of adjusting quickly to these shifts, particularly those looking to replace traditional suppliers in the Middle Eastern region.

For brokers and insurers, this situation could present growth opportunities. Exporters entering new markets will need tailored trade credit solutions, positioning brokers who offer both underwriting expertise and market intelligence to address these needs effectively. Proactive engagement with clients can help mitigate non-payment risks and leverage emerging business opportunities in the evolving global trade landscape.