Securing Corporate Stability in a Fragmented World
As corporations face expanding global risks amid tighter financial conditions, they are increasingly turning to political and trade credit insurance to protect the bottom line.
The global trading system is undergoing a structural shift.
Regional conflicts, sanctions regimes, fractured alliances, and regulatory intervention are no longer episodic disruptions but enduring features of the commercial landscape. At the same time, tighter financial conditions and persistent inflation are exposing vulnerabilities across corporate balance sheets.
This environment has set the stage for a fundamental shift in how trade credit and political risk insurance are perceived and deployed.
Global insolvencies for major firms, here defined as companies with an annual net turnover exceeding 50 million euros, rose by 6% in 2025, to 474, according to data from Allianz. Concurrently, U.S. corporate bankruptcy filings in the first half of 2025 reached 371, their highest midyear level since 2010, S&P Global reported. (Full-year U.S. bankruptcy numbers were not available at press time.)
Risk exposure today is no longer limited to isolated geographies or counterparties. Instead, companies are operating amid “a maelstrom of security, geopolitical, economic, inflationary, regulatory, and protectionist risk,” observes Julian Macey-Dare, partner in the Financial Lines team at specialty broker McGill.
“Unpredictability is increasing across the world—whether driven by tariffs, changes to trade and investment agreements, or social and political instability,” he says.
Insurance as a Trade Enabler
All of this points to a more fragile credit environment, even as companies are pressured to sustain growth amid heightened threats to their supply chains. This, in turn, is reshaping demand for trade credit and political risk insurance.
“While risk is a deterrent, companies are having to find ways to work around it, to not lose any competitive advantage or market share,” Macey-Dare says. “Insurance solutions are increasingly being used to achieve this, where they might not have been previously. This is especially true with credit and political risk coverage as these are discretionary spends.”
Credit insurance broadly is intended to help a company pay a debt it could otherwise not handle—trade credit insurance, in particular, covers a business charge a customer fails to pay. Political risk insurance protects businesses from government actions such as nationalization of a company’s assets, along with other disruptions in nations in which they operate.
Perhaps the most important evolution is how companies are structuring trade credit insurance. Rather than paying heavily to insure entire exposure bases, firms are adopting targeted, strategic approaches aligned with commercial objectives.
A growing number of large multinational companies are entering the political risk insurance market for the first time.
Multinational use of political risk insurance is projected to grow by 18% from 2025–2030 over the preceding five-year period, to roughly 45%, according to a 2026 survey from Howden. Where risks were previously absorbed or self-insured, corporations now use coverage to support continuity of trade and preserve growth opportunities. “Where potential issues have a higher likelihood of occurrence,” Macey-Dare says, “insurance is being used to allow companies to continue operating and to pursue growth, rather than retreat.
“Political risk insurance is particularly helpful in jurisdictions characterized by nationalistic or protectionist policies,” he adds, noting governments’ prioritization of domestic control of strategic resources, including critical minerals and energy infrastructure. Firms seek protection against government intervention, contract frustration, or asset expropriation as they weigh risk-reward trade-offs. While elevated risk can discourage investment, companies remain under pressure to maintain their competitive advantage, making insurance an increasingly important strategic lever rather than a discretionary purchase.
Perhaps the most important evolution is how companies are structuring trade credit insurance. Rather than paying heavily to insure entire exposure bases, firms are adopting targeted, strategic approaches aligned with commercial objectives. “Trade credit insurance can actively facilitate sales,” says Macey-Dare, and provide safeguards against the vagaries of customer payment behavior. Given that non-payment risk often sits at the heart of corporate financial statements, this certainty is unquestionably valuable.
For companies with higher tolerance for risk, insurance can be layered above existing thresholds, enabling expansion into new counterparties. When deployed this way, insurance spend is directly linked to incremental revenue, reinforcing its role as commercial infrastructure rather than a defensive cost.
Looking further into 2026 and beyond, macroeconomic shocks, geopolitical tension, regulatory intervention, and supply chain disruption are expected to remain persistent. As Howden put it, “In a world of geopolitical and macroeconomic flux, political risk insurance will continue to play a pivotal role in enabling cross-border investment and resilience.”
Facing a world of overlapping risks, trade credit and political risk insurance are likely to become increasingly central to sustaining trade flows, protecting balance sheets, and supporting strategic investment in a fragmented global economy.
