UK manufacturers are facing continued supply chain disruption, higher input costs and longer production cycles, putting pressure on working capital and credit risk management.
Marsh says trade credit insurance is increasingly being used not only to protect against bad debt but also to support growth and financial resilience in this environment.
A survey for Marsh’s Trade Credit Report 2025 found that 80% of manufacturing businesses said it was harder to grow this year than in 2024, with credit risk a key constraint. Many finance leaders still rely heavily on credit rating agencies that draw on public data, which may lag actual trading conditions and leave exposures under- or overestimated.
According to Marsh, the current economic backdrop has prompted manufacturers to tighten their credit control, with around half now monitoring counterparties’ ratings more closely. In just-in-time supply chains, missing early warning signs can quickly feed through into delivery failures and margin pressure.
Previous data suggests that this demand is being met from a relatively stable claims base, with a report from the Lloyd’s Market Association (LMA), the International Underwriting Association (IUA) and the London & International Insurance Brokers’ Association (LIIBA) showing that the number and value of trade credit insurance claims fell by nearly 25% in 2024 compared with the prior year.
Market participants say this trend has helped sustain capacity and competitive terms in 2025, even as clients in sectors such as manufacturing seek broader protection against counterparty default risk.
Trade credit insurance is being positioned as a practical way to protect receivables when goods or services are sold on open credit terms. Marsh notes that policies can help stabilise cash flow if a customer delays payment or defaults on a large contract with extended terms.
Marsh also says insurer-backed limits can influence the availability and size of supplier credit lines. When both buyer and supplier use trade credit insurance as part of their risk management, it can support larger limits and more flexible payment terms.
The survey shows that 94% of manufacturers outsource debt collection, and 98% of those say collection costs have risen over the past 12 months. Many credit insurance policies offer indemnified collections, with insurers covering up to 90% of recovered sums, and some provide professional collection services that reduce internal time spent on overdue accounts.
The same LMA-led analysis emphasised that trade credit insurance continues to underpin cross-border commerce by providing cover in markets where infrastructure and political risks are higher, while still paying claims when losses occur.
That dynamic aligns with Marsh’s view that manufacturers can use trade credit insurance to support export growth and maintain open-account terms in territories where securing reliable credit information remains difficult.
The trade credit market itself has expanded in recent years, with more insurers, higher capacity and competitive pricing. Against this backdrop, Marsh says now may be an appropriate time for UK manufacturers to review existing trade credit insurance arrangements and assess whether programmes still match their scale, counterparties and trading conditions.
