U.S. President Donald Trump set offfears of a global trade war with tariffs on metals and an array of imports from China. As countries ratchet up therhetoric and retaliation, insurers are weighing how companies willdeal with the pressure. For some providers of trade credit insurance, the saber-rattling isthe jingle of product placement.“There have been lots of reasons tobe excited recently,” said Doug Collins, regional director of theAmericas at Atradius Trade Credit Insurance Inc. “It's likely toincrease demand for coverage.”Trade credit insurance protectscompanies from the risk that buyers will be unable to pay. Ifgovernments implement more tariffs, it could increase the cost ofproduction and ultimately put stress on retailers and distributorsto either raise prices on consumers or shrink profits. If thestress is enough to put the buyer out of business, the supplierwould activate its trade credit insurance to get reimbursed fordefaulted payments.Trade credit insurance has been relatively slowto catch on in the United States. The global market is about $7billion of premiums, mostly in Europe, according to theInternational Credit Insurance and Surety Association. Of that,about $1 billion is attributed to companies in theU.S.Protectionism could help boost American demand for thecoverage, according to Evan Freely, a managing director in thepolitical risk and trade credit group at Marsh and McLennan Cos.That would be driven by companies that rely on products fromtariff-affected countries like China, he said.“We're seeing, on abroad level, an uptick in demand,” Freely said in a phoneinterview. “The tariff acts have been a catalyst to moreapplications coming in.”Trade-war stress isn't the only issuemonitored by insurers. Tariffs alone shouldn't cause otherwisehealthy retailers and distributors to go belly-up, according to RobNijhout, executive director at Amsterdam-based International CreditInsurance & Surety Association. Still, media attention aroundthe measures can help attract customers for insurance.“Brokersbuild on this, and they are an important distribution channel forour product,” Nijhout said. “They will use every opportunity thatpresents itself in the media that makes customers aware of higherrisk.”Risks are not all in favor of the insurers. While fears related to trade wars could increasedemand for coverage, they could also blunt trade and therefore theamount of coverage, according to Patrice Luscan, head of marketingand innovation at Coface SA, one of the top three providers oftrade credit insurance worldwide.“I don't think protectionism isgood for trade,” Luscan said in a phone interview. “And when it'snot good for trade, it's not good for us.”

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