Global Insurance Marketplace Insights Q1 2026 – Credit Risk Solutions

We have to speak about increasing uncertainty in global trade and the rising importance of credit risk, where it's discussed on board level everywhere. So let's get started with Fabian. Great to have you here. Why do you think has credit risk become such a big and central topic for clients over the last 12 to 18 months?

FABIAN FRANK: So first of all, thanks for having me here, Burkhard. Hello. And now coming to your question. So I believe trade credit risk has really moved into the spotlight over the last past 12 to 18 months.

It has become one of the clearest early warning indicators of economic stress, I think, across many sectors. We're seeing a noticeable and increase in payment delays. And they raise a lot of red flags around counterparty health.

At the same time, companies are operating under much tighter liquidity conditions. We see higher interest rates, slower cash conversion, also a lot more pressure on working capital. That, of course, drives stronger focus on resilience and also on proactive risk management.

So I think most important, this topic has moved from being just an operational concern to a very strategic one, seeing far more involvement from CFOs or senior finance leaders who want real transparency on buyer risk and also want to safeguard their P&L and their cash flow, which has shifted, really, and elevated trade credit risk on the corporate agenda.

BURKHARD WITTGEN: Yeah, you're fully right.

FABIAN FRANK: So Burkhard, would you say this is cyclical or structural?

BURKHARD WITTGEN: It's a tricky question. Of course, looking back, the world economy always had their ups and downs. So it's somehow natural that you have those phases. But it feels this time that it's even more structural because there are so many changes coming on.

You have the geopolitical changes. You have massive changes in technology, where, let's say, the state of how the economy has worked over the last 50 years will be massively challenged by new technology. And therefore, it's difficult to say that this is just a normal downtrend cycle because it's also somehow lots of risk to every company before maybe certain cycles having shown threats to specific industries.

But now, with all these disruption happening, I think it's basically really a structural topic that you have the increase of credit risk across every industry. And therefore, it might be more structural. But of course, if you see, lots of the economic distress is also coming to the mentioned liquidity, let's say, shrinking of the balance sheet of the central banks due to the high inflation in the past years.

But then it's combined with the structural change of how the economy works from a technology perspective. So yes, some of those but way more structural nowadays, which is also somehow a challenge for our clients. What kind of economic pressures companies are facing? So what are the main reasons they see credit risk as a rising risk?

FABIAN FRANK: So I believe companies are currently dealing with several economic pressures that directly increase their credit risk exposure. The most immediate one is the higher interest rate environment. Refinancing has become significantly more expensive. And for some businesses, even securing refinancing at all is becoming very, very challenging.

This naturally creates liquidity pressure. And cash is tighter. Funding costs are rising. And working capital cycles are stretching.

At the same time, we're seeing slowing growth in many markets, which makes it harder for companies to absorb these higher costs or generate the cash they need. All of this means that weaker or less resilient business models are now being exposed. And in an environment where money is no longer cheap and demand is less predictable, of course, gaps in strategy, competitiveness, and financial structure become much, much more visible.

BURKHARD WITTGEN: Fully agree.

FABIAN FRANK: So how does AI translate into credit risk, Burkhard?

BURKHARD WITTGEN: Yeah, I mean, we have discussed it before, that the world economy is facing a massive structural change because of, basically, AI disruption. So of course, we can speak about the risk. But there are also many opportunities with AI.

So if you see the advances of the AI technology in the last 12 months, I think, many people cannot even believe what's already possible. But on the other hand, it's like AI disruptions means that also AI is another high-level board discussion topic because board levels have to discuss, if my competitors are implementing AI quickly and reduce, let's say, costs for human resources, will I remain competitive if I don't do it?

So the risk of AI leading into somehow a phase where many companies are trying to lay off people or replace people with AI technology, on the one hand, of course, this will increase margins and maybe liquidity of these firms. But on the other hand, the structural problem is that, of course, the spending power of the economy will decrease.

Because with AI, of course, new jobs will be generated. But will this happen quickly enough so that the people who lose their jobs will be absorbed by the new industries immediately or if there maybe somehow a grace period? And if this is not going hand in hand, then, of course, the spending and consumer spending will massively be harmed, especially if people don't feel their job security anymore.

So if you look into news, the level of people who say that they feel secure about their jobs has massively dropped. And this kind of fear is always pushing consumer spending and consumer spending is basically the heart or the pulse of the world economy.

So I think that's somehow a discussion where, yeah, you see many companies which have in the past said, they don't see credit risk and they don't need credit insurance because they know their customers and they know them for ages. They know them for decades. But a company where you don't know are they quick enough with AI implementation or will they be disrupted by way leaner business models, this means that the most solid credit risk can become, let's say, risk overnight because you don't have the insight.

So credit risk, like supervising and monitoring all of your buyers but also suppliers, even if you thought that they were safe in the past, I think this will be a main topic because you have to see, are these companies quick and agile enough to make sure that they implement AI? Because if they don't, others will. And then you have a credit risk.

So yeah, I don't want to be like doom scrolling that you have all the negative news. But of course, on the credit risk side, AI is a massive issue. But I hope that, on the other hand, AI will also create an economic boom.

And if you look into the history of humanity, always new technologies or, let's say, tremendous improvements in technologies have lead to a massive increase of the overall performance of the world economy and the wealth for humanity itself. But of course, this needs to go hand in hand and there might be some time in between where we could see some meaningful distress.

FABIAN FRANK: So, Burkhard, what trends are visible in the insurance market?

BURKHARD WITTGEN: Yeah. I mean, of course, the AI disruption, this has also a massive influence on the credit insurance market. So on the one hand, we are adapting technology to be better in predicting credit risk changes, be better in servicing our clients on the insurer but also on the broker level.

But also, like as mentioned, there is more credit risk out there. And I think that the market is now preparing for seeing more demand for credit insurance, like you see, especially in Europe, several new top-up providers entering the market. You have seen the announcement that Swiss Re has acquired the trade credit business of QBE, which is a massive sign that there's an opportunity for the insurance market as well.

And I think that the trend is like due to rising credit risk, the demand for credit insurance but also and especially the demand for limits on maybe more challenging buyers will massively increase. And we will see, let's say, more discussions with clients and insurers to make sure that we can somehow place the risk and get coverage on the market. How do you see this impact for clients?

FABIAN FRANK: So I believe the more selective stance from insurers has a real impact on clients. First, it definitely creates much more limit volatility. As you mentioned already, limits that were stable in the past are now being adjusted more frequently and sometimes with very, very little lead time that makes planning more challenging for sales teams and also for financing structures who really depend on those limits.

We're also seeing slower approval processes. So underwriters are taking more time asking for additional financial information and in some cases escalating decisions internally, which also consumes a lot of time. So for clients, that means they need to prepare at a very early stage or much earlier than before and also engage more proactively to avoid any bottlenecks in their trading activity.

And finally, we see there's clearly increased scrutiny and monitoring. So insurers want deeper visibility into financials, into payment behavior, and also sector exposure. It means clients must be ready to provide more transparency and maintain an ongoing dialogue. So overall, the market is still functioning well. But it requires more active management on the client side than it did in the previous years.

BURKHARD WITTGEN: So what do you think are the main three challenges clients are facing, the top three challenges?

FABIAN FRANK: So clients, they are actually facing several challenges in today's environment. The first one is securing sufficient credit limits for their key customers, with insurers being more selective. So even long-standing relationships sometimes come under pressure, which can directly impact a company's ability to trade and grow.

And second challenge is many businesses depend heavily on a small number of large buyers or distributors. And when limits on these counterparties tighten or fluctuate, definitely, the operational impact can be very significant. I mean, this makes diversification geographically and also across customer segments. Definitely more important than ever.

And you asked for three. So finally, companies are struggling to balance their growth ambitions with their current risk landscape. Sales teams want to capture new opportunities.

But finance teams need to ensure exposures, remain within acceptable risk thresholds. And managing this tension requires closer alignment, definitely also better data, and, again, a more proactive planning than in the past. So Burkhard, how can trade credit insurance support clients?

BURKHARD WITTGEN: Yeah, I mean, we have spoken a lot about the risk. And of course, we are there to find solutions in the insurance market for clients to make sure that these risks are covered. So credit insurance, of course, provides coverage for counterparty risk for your buyers. If the buyer gets into default, then you get the unification from the credit insurer.

It enables growth, especially where supply chains are changing, new counterparties are coming. The credit insurer are very close to these risks. So you may have more discussions about limits. But this also means that you are better informed about the creditworthiness of your clients. And I think this is something where credit insurance plays a vital role.

I think also what we see as a main driver of credit insurance is that especially lenders are getting more focused on the financing part. So they request more securities. And the account receivable portfolio of a company can be a very, very valuable security for lenders.

And here, credit insurance helps because it replaces the rating of your overall portfolio versus the default rating of the credit insurer. And here, our clients and companies can leverage trade credit insurance to improve the financing conditions. So I think this is one of the main roles credit insurance play-- prevent the risk on the other side. But then also enable companies to grow. And use the coverage as security to improve their financing conditions.

Now, Fabian, coming to the end, what do you see as an outlook for the next 12 months, especially for the insurance industry? So how would you see? And what kind of advice would you give to our clients?

FABIAN FRANK: So advice is may be difficult. But I could at least provide a little bit of, as you said, an outlook on the next 12 months. I can at least mention what we can expect.

We should expect, definitely, continued volatility. The environment remains very, very unpredictable. Interest rates, geopolitical tensions, supply chain realignment, of course, sector-specific dynamics, they will all continue to create further pockets of instability rather than broad-based trends.

And we also anticipate sector-specific stress. Some industries with higher refinancing needs or historically low margins will feel the pressure more than others, while more resilient sectors may still perform well. So the story won't be uniform. It will very much depend on where companies operate and how exposed they are.

I guess because of that, there is a clear need for active management. As we already mentioned, companies that stay close to their counterparties or monitor developments in real time and proactively adjust their credit strategies, they will definitely navigate this environment more effectively. The days of set and forget are definitely over. So active data-driven decision making will be the essential.

BURKHARD WITTGEN: Yeah, I fully agree. Perfect, Fabian. I think we covered most of the parts. There are risks out there. But there are solutions to navigate these uncertain times.

Fabian, thanks for your contribution on this episode of The Marketplace Insight podcast. And I hope we see each other in the next one. See you soon. Bye bye.

FABIAN FRANK: Thank you. It was an honor, Burkhard.

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