Recent data released by the Berne Union highlights a significant surge in trade credit insurance activity during 2023, with export credit agencies (ECAs) and commercial insurers witnessing robust growth in key product lines. However, this positive trend is accompanied by a sharp increase in claims from policyholders.
According to the Berne Union’s snapshot of full-year 2023 data, new short-term trade credit insurance business increased by 6% year-on-year to reach US$2.8 trillion, while medium and long-term (MLT) business experienced a remarkable 40% jump, reaching US$165.4 billion. This surge in MLT business represents the largest growth since 2015, driven by a strong performance in export credit agencies and a buoyant manufacturing and infrastructure sector.
The report also indicates an 18% rise in new domestic business and a nearly 30% increase in cross-border credit insurance products not linked to trade, amounting to US$81 billion. However, new political risk insurance business saw a slight decline, dropping by 4% to US$40.8 billion.
Berne Union president Maëlia Dufour described 2023 as an “exceptional year” for the export credit industry, attributing the growth to increased support for energy and climate transition projects alongside rising demand for strategic, untied, and domestic products.
One standout area of support was renewable energy projects, with Berne Union members committing a record US$20.5 billion in 2023, double the volume from the previous year. Despite these commitments, criticism persists regarding ECAs’ substantial backing of the fossil fuel industry compared to renewable energy sectors.
While geopolitical risks and economic slowdowns are perceived as primary threats to business by members, concerns about elevated claims remain pressing. The Berne Union reported a record US$8.9 billion in non-payment claims across all cover types, marking a 24% increase from 2022. This surge was largely driven by MLT political claims in the first half of 2023 due to sovereign debt distress.
The meeting in Oslo hosted by the Norwegian ECA Eksfin also saw significant developments, with three entities—Credsure, HDI Global Specialty, and Ukraine ECA—elevated to full membership status within the Berne Union. Additionally, ECA representatives from the Quad nations (Australia, India, Japan, and the US) signed a memorandum of cooperation focused on enhancing supply chain resilience, critical technologies, and climate and infrastructure initiatives in the Indo-Pacific region. This collaborative effort aims to ensure responsible and sustainable export financing activities amidst global economic complexities.
