Credit Insurance and Surety Bond Demand Expected to Rise in Latin America
Latin American and global demand for trade credit insurance and surety bonds is expected to continue to rise in 2013 to reflect increasing trade flows, primarily from high-growth markets, according to a report from the International Credit Insurance & Surety Association (ICISA).
ICISA has 48 member companies from the global insurance and reinsurance sectors. Its executive director, Robert Nijhout, said that its members are still concerned about the reserved attitude of banks, but are “pleased with the increased level of interest for trade credit insurance and surety during the past year.”
He added that members experienced a deteriorating risk environment, with claims activity increasing in 2012. For the year ahead, they continue to anticipate growth for the trade credit insurance sector in Latin America, especially in Brazil.
However, ICISA vice president, Andreas Tesch, added that volatility in some parts of South America is a cause for concern in 2013 for the trade insurance market
In the surety bond market, ICISA members have expressed concern about the eurozone and the US but are more positive regarding the outlook in Latin America, some African countries, and fast-growing emerging economies in the Far East. “Demand will continue to rise in countries that were already successful in 2012,” said Nijhout.
A report issued by ICISA notes that “major resources and skilled underwriting are needed to meet the demand for surety bonds in the on-going poor conditions of the construction and transportation areas.”