The global credit and surety insurance sector has shown steady growth despite ongoing economic and geopolitical uncertainty, according to the 2025 Credit and Surety Market Survey by Axa XL.

The survey, based on interviews with 31 senior professionals from 28 companies across Europe, North and South America, the Middle East and Asia, found that 60 per cent of respondents had seen strong premium growth since the pandemic.

Key drivers included inflation, renewed infrastructure investment and increased demand from banks.

But while the market has expanded, challenges are mounting. Ninety per cent of respondents said they expected loss ratios to worsen in the near future, with notable stress in the political risk and contract frustration sectors, particularly in countries such as Ghana, Zambia, Niger, Russia and Ukraine.

“After the 2007-08 financial crisis, the market enjoyed a long period of stability,” said Felix Winzap, Axa XL’s head of credit and surety in his foreword. “But a series of events ― Covid-19, the war in Ukraine, instability in the Middle East ― have brought back uncertainty. We felt it was time to analyse the impact of these developments on the sector.”

In the surety market, most respondents also reported substantial premium growth, with inflation and Covid-era stimulus programmes contributing to the uptick.

While half said loss ratios had deteriorated somewhat since the pandemic, all agreed that overall loss levels remain manageable.

The report found that banks continue to increase their use of credit and surety products, particularly where insurance can provide capital relief under updated Basel IV banking regulations.

Seventy-five per cent of respondents said bank-related business had grown since 2022 and was expected to continue on that path.

Artificial intelligence is also making inroads. Forty-three per cent of surveyed companies said they are already using AI tools, mostly in underwriting and risk analysis.

Another third are in the testing or planning phase, with most developments happening in partnership with outside providers.

The report also looked at how insurers are responding to environmental, social and governance concerns. While a number of companies are supporting the energy transition, only a minority have made ESG a formal part of underwriting or risk evaluation. Just 23 per cent reported net-zero targets.