The credit and political risk insurance (CPRI) market posted growth and stable claims experience in 2025, supported by balanced supply and demand dynamics, according to Howden Re.
The reinsurance broker's credit and political risk team reported that elevated demand from banks and corporates was largely met by increased capacity from both incumbent insurers and new market entrants. While pricing eased gradually, reductions remained measured due to conservative underwriting practices and overall supply limitations.
Phil Bonner (pictured above), managing director of global specialty treaty at Howden Re, said the year was marked by a combination of growth and underwriting discipline.
"2025 was defined by a rare combination of strong growth, disciplined underwriting and sustained outperformance across the CPRI market," Bonner said. He noted that despite macroeconomic and geopolitical volatility, claims experience remained stable and underwriting rigor continued to distinguish CPRI from broader commercial lines.
Market data reflected these trends. In the US, credit, surety, and fidelity lines grew by 10% in the first half of 2025, compared with 5% growth for major US commercial lines. The incurred loss ratio for those same markets was 26% in the first half of the year, compared with 57% for major US commercial lines. The three global credit insurers recorded average combined ratios of 75% in 2024.
Pricing has declined steadily in recent periods, with reductions of 10-20 points from post-COVID highs in the direct market for more standardized risk types. At the January 1, 2026 reinsurance renewals, ceding commissions on quota-share business increased moderately, while excess of loss programs saw limited downward movement.
Marius Fischer, managing director of reinsurance broking for credit and financial risk at Howden Re, said gradual softening is expected to continue. He noted that demand remains supported by banks and corporates seeking capital relief and balance sheet protection, with increased participation from institutions that historically were not major buyers, including US banks.
The outlook aligns with broader industry observations. Patrick Rengger, commercial account executive and senior advisor at HUB International's complex risk division, said the political risk insurance market is set for continued expansion as demand accelerates.
Rengger noted that political risk has moved from a niche specialty to a mainstream risk-management tool, with companies increasingly aware that political interference can take many forms, from arbitrary contract changes to currency controls.
One challenge facing the market is a shortage of experienced underwriting talent, which has intensified competition for skilled CPRI professionals and raised expense ratios, particularly among new entrants and MGAs.
