Trade credit’s US growth story – Allianz Trade’s Murrow

Technology and education are key to unlocking trade credit insurance’s further expansion, according to Allianz Trade Americas’ Sarah Murrow

Trade credit insurance is one of the most embedded but least understood corners of the commercial insurance world, Sarah Murrow, President and CEO of Allianz Trade Americas, told the Voice of Insurance.

Murrow told the podcast that raising awareness about trade credit in the US market is her top priority.

She has spent 21 years with Allianz Trade in roles across the US, Europe and Latin America, including time in London and Paris, before recently returning to the US to lead the insurer’s Americas business.

“I started right out of university with Allianz Trade in Baltimore,” she said. “It definitely feels like I’ve had more than one employer because I’ve worked in three different countries and in a wide variety of roles.”

At its core, trade credit insurance is quite simple, Murrow explained.

“When a business sells to another business on credit terms, a receivable is created,” she said. “We underwrite the risk of that customer not paying. If they don’t pay, we indemnify the supplier and then pursue collections.”

Risk mitigation and growth

Businesses often view trade credit as a discretionary spend rather than a necessity, Murrow acknowledged.

She stressed that it should be seen as a more critical protection, given its centrality to the day-to-day operating of a business.

“Accounts receivable is often the largest or second largest asset on a company’s balance sheet, yet frequently the only one not insured,” she emphasised.

Clients buy cover for several reasons. Risk mitigation is a leading factor, she said, particularly for small firms with thin margins or customer concentration – but this perspective can sell the product short of its potential value.

“Credit insurance is also a growth tool,” said Murrow.

“It allows companies to sell into new countries or new customers immediately on credit terms, which they otherwise might not feel able to do. It also supports financing, because banks often require receivables to be insured before lending against them,” she continued.

The product can even function as outsourced credit management, she added, particularly for firms with thousands of counterparties.

Allianz Trade’s database tracks more than 90 million companies worldwide.

“The real value is in the monitoring of those customers’ credit over time,” Murrow added.

Economic headwinds

Murrow described the broad economic outlook as “under pressure”. Allianz forecasts sluggish global growth of 2.5% in 2025, with insolvencies expected to rise 6% globally this year and 3% next year.

“In the US, insolvencies are forecast to increase 11% this year and 6% next year,” she said, citing higher interest rates, tighter financing and uneven consumer demand.

Sector-wise, Allianz Trade is closely watching automotive and construction as businesses facing tough market conditions.

“The shift to electric vehicles creates risks around supply chains, raw materials and consumer confidence…Construction is always challenging from a credit perspective, and higher rates and material costs are still weighing on demand,” said Murrow.

The US remains the world’s biggest growth opportunity for trade credit, she suggested.

“Ironically, the US is probably the most mature economy with the lowest penetration of credit insurance. It’s very much a growth market for us, but the challenge is education,” she said.

“There’s simply a lack of awareness of what the product can do,” Murrow added.

Tech and human touch

Daily interaction with clients is central to the line of business, she stressed.

“Unlike most insurance, our policies are living, breathing things. “Customers request credit limits, add new buyers, and receive updates from us on changes to counterparties almost every day,” Murrow said.

Technology underpins service, she explained, including use of artificial intelligence (AI).

“Automation and AI help us process vast amounts of data and detect early warning signals. That frees our credit analysts to spend more time with clients, which is what they really value,” she said.

AI will remain a tool, not a decision-maker. “It can help us make smarter decisions, but it will never replace the human brain,” Murrow continued.

Brokers are expected to remain crucial to distribution, she observed.

“There’s a lot of advice and consultation in administering the product, and that’s hard to replicate digitally,” she said.

“Credit insurance is not just about protecting a business; it’s about enabling it to grow. It’s a strategic business tool, and one that deserves much greater awareness in the US market,” she added.