We recently blogged about trade credit insurance, on the heels of a new report released by Grandview Research Inc., stating that the trade credit insurance market is projected to be worth $22.13 billion USD by 2030.
But what does that mean for folks just going about their lives? And which sectors will be affected the most?
What’s driving the trade credit insurance boom?
To recap, trade credit insurance is intended to protect businesses from economic and political risks that could affect their financial situation.
- The increasing appeal of trade credit insurance post-pandemic, including protection of accounts receivable from loss caused by bankruptcy, insolvency, or credit risks, is driving an increased adoption of trade credit insurance globally.
- Rising strategic business initiatives, like partnerships, collaborations, and acquisitions, are expected to help fuel the market’s growth as well.
- Additionally, the integration of advanced digital technologies into the market (specifically AI) is expected to further drive market growth, since insurers can now offer more efficient, accessible, and cost-effective services.
So, which markets will be most affected?
While this is a global trend, there are certain sectors that will be more affected than others. These include:
- Food & beverage
According to the report, the food & beverage segment dominated the market in 2022. The main reason? There’s an especially high degree of credit risk in food & bev due to perishable items, and reliance on a few large customers. Plus, the pandemic has left restaurateurs extra wary of things that could potentially go wrong.
What does this mean?
-
- Food and drink costs at the consumer level could continue to rise at first, to help account for insurance costs among suppliers. However, trade credit insurance can be a powerful tool for food distributors looking to spark growth in international markets. With coverage against non-payment by foreign customers, trade credit insurance gives businesses the confidence to test new markets and expand across borders.
- Banking
The introduction of digital software to streamline banking and insurance services and the use of data analytics in trade finance is expected to drive market growth. Moreover, market players are expanding trade credit solutions for digital platforms to gain a competitive advantage over their rivals.
What does this mean?
-
-
- It’s a great time to open new accounts or purchase insurance – you are in control, now more than ever.
-
- Travel
The global travel insurance market is anticipated to reach USD 63.9 billion by 2030, according to the latest reports. The demand for travel insurance is positioned to skyrocket due to growth in the tourism industry, from factors like easy internet travel bookings, extensive media coverage of various holiday types, an increase in disposable income, and enhanced package holidays.
What does this mean?
-
-
- Due to the rise in demand, travel insurance offerings could become more competitive, giving you more options to choose from.
-
Essentially, trade credit insurance is more accessible and affordable than ever before. Is it right for you? If you have any questions about the recent report, or want to chat about insurance options, contact us today and book a consultation.
