What we have seen in June renewals
June renewals remain competitive. Similar to cyber, D&O, or management liability, Trade Credit continues to experience a soft market despite volatile economic conditions and heightened insolvency risks. Insurer capacity remains available and the trade credit market is continuing to see momentum, but underwriting is disciplined. Insurers are paying particular attention to working capital strength, debtor days, and overall cash flow discipline. Businesses that can demonstrate robust credit processes are securing better terms and higher limits.
While this soft pricing suggests economic resilience on paper, the cash-flow reality on the ground is vastly different. The RBA’s consecutive rate hikes, culminating in the May 2026 increase to 4.35%, continue to place immense pressure on corporate debt servicing and liquidity. Businesses are currently being squeezed from three directions at once: higher interest rates are lifting financing costs, persistent inflation and elevated energy prices are increasing operating expenses, and weakening consumer demand is limiting the ability to pass those costs on. Global uncertainty linked to ongoing Middle East conflicts compounds these pressures through volatile fuel pricing and broader supply-chain inflation impacts, further tightening corporate margins.
Pressures look set to continue through the rest of 2026 and into 2027. That said, businesses that respond proactively, by tightening credit processes and making smarter use of trade credit insurance and risk management tools, will be much better placed to manage risk and take advantage of opportunities where they exist.
Premium pricing trends
The trade credit market remains highly competitive, with strong insurer capacity driving premium rates down to historic lows. Insurers are preferencing well-diversified corporate accounts with robust internal credit controls who are securing exceptionally soft pricing and aggressive rate reductions.
More challenging risks are seeing more flat pricing provided the underlying debtor quality is stable.
Insurer behaviour
Insurers are aggressively competing for premium volume and market share, keeping risk acceptance rates high.
However, they remain highly selective regarding baseline asset quality. While Insurers are eager to support capacity and offer flexible, competitive terms, they are avoiding structured deterioration while rewarding businesses that demonstrate strong credit processes with vastly superior limits and terms.
Swiss Re’s buyout of QBE’s $200m trade credit book is expected to shake up the APAC and UK markets. Combining QBE’s local footprint with Swiss Re’s massive balance sheet creates a powerhouse that will definitely force traditional niche insurers to sharpen their pricing and capacity to stay competitive.
Claims trends
Claims trends include insolvency, extended payment cycles, customer concentration, contractor-chain contagion, refinancing stress and overseas counterparty failure. Payment defaults remain elevated, with reports indicating that around 80% of businesses are experiencing slower collections.
As detailed in ASIC reporting, creditors’ voluntary liquidations continue to represent the overwhelming majority of corporate collapses, maintaining an elevated multi-year baseline. Concurrently, the sustained volume of restructurings signals widespread, active distress across the mid-market and SME landscape as companies scramble to reorganise under severe financial pressure.
Source: © Australian Securities & Investments Commission
Performance varies sharply across industries. There are still pockets of strength in technology, AI, data infrastructure, healthcare and some supply chain areas. However, construction, which accounts for 27% of insolvencies, hospitality at 15%, discretionary retail and many mid-market businesses remain under severe pressure, fighting margin compression and heavy debt burdens. The clear takeaway is that broad sector views are no longer enough, risk today is highly specific to individual buyers and individual transactions.
Legal and regulatory developments
Budget-driven feasibility pressure and changes to investment behaviour may affect property and construction counterparties. Geopolitical disruption also affects inbound and outbound trade, shipping costs, commodities, payment risk and sanctions screening. The formal commencement of the ATO’s Payday Super legislation on 1 July 2026 mandates that employers transition from quarterly payments to aligning superannuation contributions directly with regular pay cycles, eliminating a common short-term cash-flow cushion historically utilised by strained businesses.
Export considerations
Australian exporters are operating in a more complex environment, with geopolitical issues, supply chain shifts, and overseas buyer risk all adding layers of exposure. A stronger AUD provides some import relief but squeezes export margins. Trade credit insurance continues to play a valuable role in managing cross-border exposures and giving businesses confidence to pursue new market opportunities.
Financiers are expecting export clients to use Trade Credit insurance on all transactions. This includes both credit and Cash against Documents.
AI and technology impact
Credit monitoring, debtor analytics and real-time payment information are increasingly important. AI can assist early warning, but credit discipline remains manual and commercial.
What policyholders should do now
Review debtor concentration, overdue accounts, credit limits, retention of title, insurer reporting obligations and export exposures. Trade credit should be treated as a credit-management tool, not only an insurance product. In this environment, enhanced credit risk management is essential. Trade credit insurance should be positioned not merely as protection, but as a strategic instrument to safeguard liquidity, support sustainable growth and strengthen balance sheet resilience.
Key considerations for businesses include robust cash flow forecasting and working capital discipline, proactive management of debtor days and collection processes, controlled customer concentration levels both domestic and export, and comprehensive credit assessment frameworks including PPS registration and detailed counterparty evaluation.
Trade credit insurance continues to play a valuable role in managing cross-border exposures and giving businesses confidence to pursue new market opportunities. Many financiers now expect export clients to utilise trade credit insurance across both credit and Cash Against Documents transactions. Businesses that strengthen credit controls and utilise appropriate risk management tools will be better positioned to navigate these conditions.
Pressures look set to continue through the rest of 2026 and into 2027. That said, businesses that respond proactively, by tightening credit processes and making smarter use of trade credit insurance and risk management tools, will be much better placed to manage risk and take advantage of opportunities where they exist.
We assist businesses in navigating these dynamics through tailored policy structures and practical credit risk strategies.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
