Will 2025 mark a new chapter for US credit insurance?
The earliest forms of credit insurance can be traced back to the late 19th century in the US. Yet, despite these origins, the US remains one of the least penetrated markets for credit insurance globally. With the new 2025 Trump Administration placing new emphasis on trade policy, today we explore the status of the country’s credit insurance market, the key economic and geopolitical impacts, and how insurers can leverage evolving market conditions to build a sustainable industry.
Challenges in the US credit insurance market
Compared to other markets, credit insurance in the US remains relatively underdeveloped, with premiums of around USD$1 billion, despite an estimated potential market of 18 million companies. While there are ongoing efforts across the industry to grow the market, some key issues underpin its slow progress:
1. Awareness
One of the biggest challenges is the limited understanding of credit insurance in the US. Many American companies are not aware of the benefits credit insurance offers them in protecting their receivables and in managing their credit risk. This lack of awareness is not helped by the fact that credit insurance is not typically included in standard financial education in the US, leading credit managers – who often have a higher risk tolerance than their European counterparts – to rely on other risk mitigation tools.
2. Regulation
Unlike in Europe where regulations support the use of credit insurance by banks, US regulations are more restrictive and limit the ability of local banks to use credit insurance effectively. This in turn reduces its overall attractiveness as a risk mitigation tool. Industry stakeholders are advocating for regulatory reforms that would allow US banks to use credit insurance as a capital relief tool, similar to practices in Europe. These changes could enhance its attractiveness as a risk mitigation strategy and encourage broader adoption.
Economic and geopolitical considerations
Despite persistently high inflationary pressures, the American economy is experiencing strong employment rates, with leading economists projecting steady domestic growth of between 1.9% and 2.5%. This economic resilience is a positive sign for the local credit insurance market. Rising wages and higher domestic consumption will necessitate new risk strategies, enabling businesses to navigate the economic disruptions caused by tariffs and other geopolitical factors.
Geopolitical developments, in particular the impact of the Trump Administration’s newly imposed import tariffs, may shift American businesses away from Asia and Europe, influencing trade finance availability and strengthening local demand for credit insurance. While the new tariffs are viewed apprehensively by many within the business community, they could also boost domestic production and trade in the US. Higher tariffs on imports, particularly from China, will lead to higher production costs, which in turn will encourage greater domestic production.
As American businesses scale up their local manufacturing, they will face new financial risks and uncertainties. Credit insurance will play an important role in mitigating these risks, ensuring businesses can continue to operate smoothly by safeguarding against potential losses and protecting receivables in a more volatile economic environment.
Increased local production also raises the need for specialised credit insurance products that cater to American businesses who are reshoring their operations, helping them manage the risks associated with their new supply chains and production processes.
Nurturing an increased need for credit insurance
Amid these changing market conditions in the US, credit insurers should stay agile in navigating and providing coverage – adapting and scaling their current operations and executing new go-to-market strategies that support the anticipated growth in demand for credit insurance.
AI and digital platforms are key to streamlining operations, improving efficiency, and automating the credit insurance value chain. Hybrid models that combine AI insights with traditional risk frameworks are already offering insurers reliability and transparency, enabling low operating costs and faster engagement with digital experiences.
Real-time risk quantification helps credit insurers address new risks and unpredictable market conditions, by using it in credit risk assessments and claim management for enhanced predictive accuracy and early warning detection of fraud. This allows US insurers to respond faster to changing market conditions and provide better service to their customers.
Effective claim management is also vital for building confidence and supporting growth in the US market. Technology can support this through real-time monitoring, leveraging alternative data and implementing dynamic pricing. AI can also be used to forecast claim surges and proactively adjust coverage, helping American credit insurers manage their risk more effectively as they expand, and build market confidence.
API integration can significantly enhance user experience by modernising portals, streamlining processes, and enabling new communication channels like chatbots and automated emails. By improving digital engagement, insurers can better serve their customers and strengthen their value proposition.
Fostering growth in the US credit insurance market also requires strategic industry collaboration between insurers, reinsurers, and other key stakeholders. Reinsurers have valuable expertise and data that can help insurers improve their underwriting and pricing, and lead to the development of new products and services that meet the US market’s unique and evolving needs and grow the overall customer value proposition of credit insurance.
Building a sustainable credit insurance industry in the US
Despite long-standing challenges, there are promising signs that the current economic and geopolitical landscape will have a positive impact on the demand and appetite for credit insurance in the US.
If insurers can harness this demand, they have the potential to develop an industry that can grow and adapt long into the future. The industry must remain agile and responsive – leveraging technology for efficiency, scalability and information to drive growth, enhance services and create a solid foundation for a sustainable future.
About the Author
Antoine Megglé, VP Go-to-Market
Antoine Megglé is a business leader with extensive experience in technology-driven growth, digital transformation, and strategic planning, particularly in financial services and insurance.
He joined Tinubu in September 2024 as Vice President of Go-to-Market, leveraging his expertise in AI, GenAI, and risk management to drive innovation and business expansion.
Throughout his career, he has held leadership positions in global organisations, including tech scale-ups, Microsoft, and McKinsey. At Microsoft and McKinsey, he worked on applying AI and GenAI to optimize processes, develop new products, and create innovative services. His background includes roles at Accenture and other consulting firms, focusing on large-scale digital transformation initiatives.
Antoine holds a Master’s degree in Business Administration from HEC Paris.