According to the World Economic Forum (WEF), uncertainty is the “watchword.” Late-stage globalisation means the global market is extremely sensitive to the actions of one country. As American firms shift towards “front-loading”, rushing shipments before tariff deadlines, disruptions are caused in the supply chain, creating artificial and fleeting spikes of demand.

While globalisation has heightened volatility and risk perception, some in the insurance industry see cause for optimism rather than alarm. At the 51st Annual International Trade and Forfaiting Association’s (ITFA) Conference in Singapore, Trade Finance Global (TFG) spoke with Charlie Salmon, Vice President at Marsh UK and Ireland, and Alexia Somnolet, Head of Political Risk and Structured Credit at Marsh Europe. They offered a contrary view of the rising risk within the global insurance market, instead emphasising that the decline of global insurance rates speaks highly of better financing practices that corporates and banks have adopted.

“There has been quite substantial growth in the supply of insurance”, said Salmon. This is attributed to the growing need for insurers to diversify their portfolios within a highly competitive industry. The increased supply means insurers need to work harder than ever to meet the demands of their clients, which means financial institutions seeking insurance can benefit from a broader range of products and on better commercial terms. 

According to Marsh’s latest Global Insurance Market Index, global commercial insurance rates fell by 4% in Q2 of 2025. For firms, this poses a crucial opportunity to expand their coverage in a time of heightened risk awareness. 

Structured receivable transactions

One driver behind declining insurance rates is the evolution of transaction structures, particularly in receivables finance. Over the last year, there has been a notable change in the sequence of transactions that may be responsible for this insurance shake-up. Increased flexibility in either a full or limited recourse structure has “been the big driver for demand”, Salmon observed.

“We’re also seeing much more demand for portfolio structures and quasi-portfolio structures”, said Salmon. The market is experiencing increased confidence from firms to diversify their risks and promote the consistent flow of receivables between suppliers and buyers. 

A similar trend was seen in 2022, with the TMF Group reporting that the demystification of trade receivables securitisation has led to the increased demand for flexibility to offset triggers in global uncertainty. 

The insurance market has made considerable adaptations to ensure that premiums remain low, but financing remains high.

Large-scale leasing

Beyond receivables, leasing has emerged as another pillar in this reshaped financing landscape, offering corporates additional flexibility in capital allocation. Large-scale leasing enhances the reciprocal relationship between receivables finance and supply-chain finance. Improved capital optimisation and cash flow management are the key changes that have improved the global insurance landscape. 

Leasing for corporate allows for “capital optimisation because you don’t have to invest huge amounts of [capital expenditure] to purchase a machine, and you can get it financed, and it frees up cash”, said Somnolet. The freeing up of capital allows for a more seamless flow of credit. Somnolet also echoes the same sentiment as Salmon, noting that large-scale leases generate “a balance sheet of flexibility.” 

By reducing the adverse risks of credit, corporates can rely on banks to give them more control over their assets in the long term. Leasing no longer needs to be an outright expense, but rather more manageable chunks of costs. As banks are increasingly willing to insure the asset rather than use it as collateral, this approach more effectively manages regulatory risks.

Although the leasing industry is projected to surpass £291 billion by 2030, it remains underutilised by many corporates and banks despite its potential to unlock liquidity and fuel growth. Leasing enables businesses to access costly equipment without tying up capital, while banks can mitigate risk by repossessing, reselling or insuring leased goods. The regulatory treatment of leased assets often limits their recognition as collateral, but credit insurance offers an effective solution by transferring non-payment risk, thereby preserving profitability.

Contract monetisation and long-term segmentation

Firms are exploring contract monetisation as a natural extension of leasing and receivables finance. The insurance market is shifting towards longer-term segmentation structures, representing one of the most substantial growth areas in trade finance. Salmon has observed increasing demand for contract monetisation transactions that extend beyond traditional receivables financing. These innovative structures can encompass leasing arrangements, software licensing agreements, and virtually any contract that generates steady payment flows over extended periods.

“We’ve seen a lot more of these contract monetisation transactions, which can cover leasing or types of leasing, it can cover software licensing, it can even cover any contract for which there is a steady flow of payments over a long time,” Salmon explained. 

This trend is particularly driven by the uplift in risk-weighted assets (RWA) of long-term transactions in the trade space. It’s therefore more important for banks to minimise RWAs and achieve better capital efficiency through these structures, creating a win-win scenario where insurers can access a broader range of risks while banks optimise their regulatory capital. The growing appetite for such transactions signals a maturation of the trade finance market, where traditional boundaries between asset classes are becoming increasingly fluid.

The future of financing growth

Market forecasters have all produced different yet ultimately highly optimistic predictions about the growth of the Global Financial Leasing Markets by 2033, with some claiming a Compound Annual Growth Rate (CAGR) of 5.41% to as high as 6.52%. Such expectations undoubtedly present opportunities for various industries and markets worldwide.

The Global Insurance Report from McKinsey & Company provides insights into the reasons for these optimistic outlooks, highlighting that distribution is increasingly geared towards the customer as insurance becomes more embedded into the costs of goods and services.

High growth is also driven by RWAs being bundled into high-quality securities; increased credibility enhances security for the buyer and ultimately leads to more stable income over time through the attractiveness of such long-term leasing contracts.

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A shift towards long-term segmentation, contract monetisation, and improved cash flow has already reshaped financing in an uncertain world. More liquid assets are creating the desired environment of flexibility, optimising the future of trade finance. The subsequent phase, as Somnolet confirms, involves standardisation – a stage not yet fully realised. 

If achieved, this could anchor the trajectory of growth financing, transforming today’s innovations into tomorrow’s stable market norms.