Canadian exporters inquire on trade insurance as Trump's tariffs heighten risk

Promit Mukherjee - Reuters - 10/04
A little-known insurance product is gaining traction in Canada as exporters seek to guard against losses and bankruptcies of their suppliers and customers due to U.S. President Donald Trump's tariffs, insurers said.
  • Allianz Trade in Canada seeing almost 10% jump in inquiries
  • Trade credit insurance taken up by very few Canadian exporters
  • Uncertainty around tariffs holding up insurance sales
  • Insurers expect higher demand in a few months
OTTAWA, April 10 (Reuters) - A little-known insurance product is gaining traction in Canada as exporters seek to guard against losses and bankruptcies of their suppliers and customers due to U.S. President Donald Trump's tariffs, insurers said.
Trade credit insurance for insolvencies of foreign customers covers 90% of all lost payments and is widely used in Europe. Yet Canadian exporters insure less than 1% of all overseas payments that account for 40% of their revenue, according to Receivables Insurance Association of Canada, the body that represents trade credit insurers.

Sign up here.

Trade credit insurance has never been popular for business between the U.S. and Canada, which ships over 75% of its exports south of its border, because risks have been minimal under free trade agreements for three decades, insurers and brokers said.
Demand for coverage has risen during financial crises, as in 2008-09 and the pandemic.
While inquiries have increased recently, customers are hesitant due to the uncertainty of Trump's on-again, off-again tariffs, said Agatha Alstrom, vice president of Insurance and Working Capital Solutions at Export Development Canada (EDC), a federal age...
[Short citation of 8% of the original article]