Market conditions for trade credit coverage have become more difficult during the second quarter of 2022, according to Aon.
In his last Market Dynamics Outlook report, the broker said market conditions for trade credit coverage in the second quarter were impacted by ongoing supply chain issues, inflationary pressures and uncertainty related to geopolitical events in Eastern Europe. East.
Aon said that although the underwriting appetite for trade credit insurance was reduced due to these difficulties, capacity was “generally sufficient to meet most customer needs”.
In terms of underwriting, insurers took a more rigid and rigorous approach and focused heavily on policy language, while product innovation became a priority.
Despite reduced underwriting capacity and appetite, Aon predicted that demand for trade credit cover would continue to increase.
Double-digit price increases in trade credit coverage have become more common – average prices rose 11% to 30% during the second quarter, according to Aon’s report.
The broker predicted that market conditions for the industry would remain challenging.
Credit insurance provides coverage for businesses if customers who owe money for products or services do not pay their debts or pay them later than payment terms require.
Coverage is for products and services that are due within 12 months.