As economic volatility intensifies in 2026, trade credit insurers are warning that stress is increasingly emerging among middle-market companies, with payment delays and insolvencies rising even as large corporate failures remain relatively limited.
According to Pablo Brando (pictured), president of trade credit, US, at Intact Insurance Specialty Solutions, the risk environment has become markedly more complex as geopolitical tensions, tariff uncertainty and supply chain disruptions overlap and amplify one another.
This prolonged volatility is starting to hit middle-market businesses. Although headline-grabbing bankruptcies have remained relatively scarce, Intact is seeing a growing number of smaller defaults.
"It's not just one event anymore, it's overlapping events," Brando said. "Over the past couple of months, we've seen more issues in the middle market, (such as) more insolvencies and more payment delays.”
His comments come as US business failures continue to climb. According to S&P Global Market Intelligence, 785 US companies filed for bankruptcy in 2025, the highest total since 2010.
Meanwhile, business insolvencies globally rose 10% in 2024 and around 6% in 2025, and are expected to increase by another 6% in 2026, according to Allianz Trade, reflecting continued pressure from higher borrowing costs, weaker demand and trade disruptions.
"We haven't seen any major catastrophic (claims), so it's been more frequency and less severity,” said Brando. He believes tariffs have added another layer of unpredictability rather than creating a single identifiable risk.
"The challenge today is the constant changes. Tariffs come on, tariffs come off, then new tariffs appear. There's no stability," he continued. "At first you thought the risk was your buyer. Now you realize the risk might be your buyer's supplier."
One of the clearest signs of emerging stress, according to Brando, is changing payment behavior. He told Insurance Business that middle-market firms often exhibit gradual deterioration, providing companies with opportunities to react before a full insolvency occurs.
"Payment behaviour is especially important because that can be the first sign of trouble," he said. "With large multinationals, they'll keep paying until they suddenly don't. In the middle market, you'll often see payment slowdowns first, which gives you time to react."
Customer concentration can also create vulnerabilities. Companies that depend heavily on a handful of buyers may face disproportionate impacts if one customer encounters difficulties.
Trade credit insurers are increasingly encouraging clients to analyze not only buyers but also suppliers and upstream dependencies. "You're not just asking whether your buyer will pay you," Brando said. "You're asking where your buyer gets its supply, whether their suppliers will still be around and whether your own suppliers will be there to support your buyers."
Historically viewed primarily as protection against non-payment, trade credit insurance is increasingly being used as a broader risk management tool, particularly in industries facing elevated counterparty risks.
Amidst geopolitical volatility and global economic uncertainty, Brando said static assessments based solely on balance sheets are no longer sufficient. The shift is particularly relevant for sectors such as manufacturing, agriculture, energy, aerospace and data center infrastructure, where disruptions in one part of the supply chain can quickly spread across entire ecosystems.
"You can't rely on passive, outdated financial information anymore. It's no longer just about the strength of a balance sheet,” said Brando. “Now it's about supply chain dependencies, geography, political risk, market concentrations and geographic concentrations."
Energy markets remain especially exposed. Disruptions around the Strait of Hormuz have affected not only oil and gas flows but also downstream products including plastics and petrochemicals.
For brokers, the current environment is creating more opportunities to position trade credit insurance as part of enterprise risk management rather than simply as protection against bad debt. Some clients use coverage to improve borrowing capacity, while others leverage it to support international growth and extend payment terms.
Finally, Brando stressed that preparation and proactive planning, rather than reaction, will ultimately determine which businesses navigate the uncertainty successfully. "Resilience comes through preparation, not reaction," he said. "If you're reacting, you're already behind."
