More Canadian companies are turning to insurance, specifically trade credit insurance, to safeguard their business transactions as global economic and geopolitical uncertainty continues to rise.
Allianz Trade has seen a 59% increase in its Canadian insurance pipeline since March 2025, reflecting heightened concern among businesses over trade disruption, particularly in industries like food, transportation, and steel.
According to David Dienesch (pictured), CEO of Allianz Trade in North America, the demand for this coverage is climbing significantly, especially among sectors heavily dependent on international trade.
“Our new business premium is up 20% year over year,” Dienesch said in a recent interview with Insurance Business. “Food and transportation are getting hit hard. And with tariffs in place for steel, aluminum, and auto sectors, those industries are especially exposed.”
The introduction of new tariffs, especially from the US, has already begun to take a toll. Last week, Canadian aluminum trader Sinobec filed for bankruptcy after struggling to restructure its debt. The company blamed US President Donald Trump’s trade war for pushing them over the edge.
“We anticipate that trend (of insolvencies) is going to continue,” said Dienesch.
According to Allianz Trade’s latest economic outlook, global insolvencies are projected to rise by 7% in 2025, with a more dramatic 16% increase expected in the United States. Given the tight economic ties between Canada and the US, this is a significant risk for Canadian exporters and suppliers, according to Dienesch.
Adding to the strain is a global economic deceleration, with Allianz Trade forecasting just 2.3% GDP growth in 2025, the lowest since the pandemic. Banks, reacting to mounting risk, are expanding their provisioning for bad debts, resulting in tighter credit conditions and slower payment cycles.
“When there’s uncertainty, companies start looking under the hood,” said Dienesch. “With cash flow slowing down in the system, we see more demand, because we cover what we call ‘slow pay.’ Companies are beginning to worry.”
Canadian firms are not only tightening their own credit policies but also exploring more risk mitigation tools. Trade credit insurance is an increasingly popular option because it helps companies avoid bad debt losses and secure financing by transferring risk to a credit insurer.
“Firms are seeking options on how to better manage credit,” Dienesch said. “We’re providing more information and insights so they can make informed decisions about who they trade with, especially in uncertain environments.”
The increasing demand is not limited to exports. Interprovincial trade within Canada is also seeing renewed focus. Efforts to reduce internal trade barriers have gained renewed momentum in recent years.
The 2017 Canadian Free Trade Agreement (CFTA) is the central federal initiative aimed at reducing internal trade barriers. It replaced the older Agreement on Internal Trade (AIT) and established a rules-based framework to promote the free movement of goods, services, investment, and labor across provinces and territories.
At the same time, several provinces, including Alberta and Saskatchewan, have taken independent steps to improve labor mobility and mutual recognition of credentials.
To accelerate reform, the federal government has also pushed for broader mutual recognition by accepting goods and certifications approved in one province across all others.
Dienesch also sees Canadian businesses taking steps towards better intra-trading conditions. “Companies are looking to find new Canadian suppliers,” he noted.
To support this shift, Allianz Trade is promoting its deep knowledge of the Canadian market. The insurer is investing heavily in education initiatives for brokers and bankers.
“It’s unfortunate that uncertainty creates demand for our product,” Dienesch acknowledged. “But our focus is on managing that risk carefully for our clients, helping them stay competitive, and enabling them to trade with confidence, even when the environment is volatile.”
With economic headwinds mounting and trade dynamics continuing to evolve, Dienesch believes the need for protection will only grow. Brokers, managing general agents (MGAs), and carriers alike share in the opportunity to support Canadian business through this volatile period.
“Whether it's tariffs, geopolitical tensions, or rising insolvencies – the risks are real,” he said. “Our job is to help businesses navigate them and keep trading safely.”
