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Credit Specialties Market Update

In the first half of 2024, businesses have navigated various global macroeconomic and political challenges Businesses’ resiliency may be further tested in the months to come.
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06/21/2024 · 3 minute read

In 2024, businesses are driving high demand for risk transfer solutions amid geopolitical and macroeconomic uncertainty. 

Despite ongoing geopolitical volatility and macroeconomic uncertainty, businesses that can manage risk effectively are continuing to benefit from substantial global growth opportunities.

In the first half of 2024, businesses have navigated various global macroeconomic and political challenges, however businesses’ resiliency may be further tested in the months to come. For example, the US presidential election, arguably this year’s most consequential election, takes place in November; uncertainty persists around monetary policy decisions; and insolvency rates are expected to stay above recent historical averages into 2025.

Despite the multifaceted risk landscape, the credit and political risk insurance market remains robust, helping agile businesses navigate today’s wide-ranging risks and pursue growth opportunities in the coming years, such as critical minerals demand and government investment in infrastructure and green technology.

Our latest Market Update provides insights to support risk allocation and management strategies to enable business growth. It considers the changing risk landscape and the insurance market response across trade credit, surety, structured credit, and political risk.

Macroeconomic themes impacting businesses

In 2024 and into 2025, we see four macroeconomic themes that will likely shape the operating and investment environment. Understanding this backdrop will be imperative for businesses to address potential credit, supply chain, and business interruption challenges and realize growth opportunities.

Central bank divergence

  • Unexpectedly strong growth in 2024 may keep interest rates high in advanced economies into 2025.
  • Expensive financing may contribute to sustained elevated insolvency rates in many markets.
  • Capital may prioritize yield, limiting credit availability and the rate of borrowing.

Government trade interventions

  • Government policies to protect domestic industries and secure access to resources increasingly disrupt trade.
  • Energy price volatility has been low in 2024, but soft commodities have experienced significant price fluctuations due to climate and political events.

Political risk

  • Pre-election polling could prove unreliable in several of the year’s numerous elections, underscoring the importance of planning for lower-likelihood, higher-impact outcomes.
  • Ongoing geopolitical conflicts and tensions, including the Red Sea crisis and novel disruptive events, necessitate continued proactive supply chain risk management.

Investment growth drivers

  • Key growth drivers will likely include government and private investments that support demand for transformative climate, energy, and infrastructure projects.

Market update: Deep dive

Global business and economy. World globe crystal glass on various international money banknotes. Currency exchange rate. Financial investment concept

Political Risk

Staying proactive amid uncertainty
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Credit Risk

Building resiliency through liquidity
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Trade Credit

Supporting business growth
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Surety

Green infrastructure opportunities

Report

2024 Political Risk Report

Your guide to navigating the political and economic risk landscape in 2024.

Download the report