Credit insurers in Asia are claiming that a shift away from letters of credit (L/Cs) and towards open account trading terms is one factor why credit insurance business is increasing in the region.

Asia is increasingly a focus for credit insurers, who have seen demand for their product in mature markets, notably Europe, reduce over the last year.

Changing attitudes

According to Grant Williams, the UK head of trade credit for Coface, there has been a shift away from secured credit such as L/Cs towards more open forms such as credit insurance.

He argues that this indicates a change in attitude to obtaining credit that could result in more Asian business coming to insurers.

Industry growth

Other insurers, including Marsh China, have reported a significant increase in demand for credit insurance from Asian firms.

Atradius has reported a 15 per cent growth in inquiries for insurance in the region in the last quarter.

Eurozone crisis

Marsh China says that a particular growth area has been created by an increasing number of Asian exporters wanting to protect their balance sheets against the possibility of default by buyers in the Eurozone.

Despite the insurers' claims, there is no definitive data to assess the actual rate of growth of credit insurance in Asia.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.