Credit insurance is an effective financial risk management that protects businesses and companies against losses from non-payment of trade-related debts.
An unusual period of history- the coronavirus pandemic has triggered losses with the cessation of business in every industry. Though the unprecedented events cannot be avoided, trade credit insurance provides a safety net for insured companies, protecting them from bankruptcies, protracted defaults or insolvency.
European companies have been reaping the benefits of credit insurance as it has been widely accepted as an indispensable tool for business financing. Many European banking regulations have openings for credit insurance to help firms and financial institutions with capital relief.
In the light of recent events, credit insurance market is booming at a high CAGR for the financial period 2020-26.The global credit insurance market has opened doors for business entities in Europe. Over US$683.1 million worth of projected demand will be brought forth by leading European markets in France, UK, Italy, Russia, and the rest of Europe.
The demand for accounts receivable against defaults is higher in Europe owing to the size and proximity of the countries, along with higher cross-border transactions and non-payment risks. For long-term relationships of these businesses, trade credit insurance plays a substantial role in European markets with cash flow relief, bank financing, and improved sales in the Covid-19 pandemic.