🌟 Editor's note

Editor’s Note | Week of 25 August 2025

Insuring the new world order

From Riyadh to Rio, global trade routes are being redrawn, and with them, the terms of credit and political risk insurance (CPRI).

Our slow read this week explores how insurers, brokers, and corporates are recalibrating in the face of shifting alliances, rising tariffs, and election-driven volatility. Long relegated to a niche corner of finance, the CPRI market is coming into its own.

Gone are the days of generic political risk cover. Today’s underwriting is sector-specific, jurisdiction-specific, and calibrated to the quirks of individual projects. As corporates and banks chase returns in more precarious markets, insurers are tightening terms, shifting capacity, and quietly repositioning towards frontier economies where reform and infrastructure pipelines offer clearer rewards.

The familiar cycles, sovereign defaults, currency crunches, trade rows, no longer happen in isolation. They are colliding. For underwriters, this means more complexity, but also more opportunity.

The boardroom is paying attention. Counterparty risk has graduated from compliance checklist to strategic concern. CPRI is becoming less of a defensive hedge and more of a growth enabler.

And what does this mean for trade?

It means the next phase of globalisation will be underwritten. As supply chains splinter and capital seeks shelter from geopolitical storms, the availability (or absence) of bespoke insurance will increasingly determine which deals go ahead, which don’t, and who gets left behind. For sub-investment-grade markets in particular, trade insurance is becoming the difference between stagnation and scale.

—

Considering the risk and liquidity news cycle tends to slow in August, this week’s issue unpacks quite a lot:

In Trade:

🛤️ RBI on risk and trade across CEE, Central Asia, and the Caucasus — featuring Sabine Zucker and Elitza Kavrakova on trade corridor shifts, ESG finance in Uzbekistan, and how regional banks are stepping up compliance and credit frameworks.

🚢 Structured ship finance in Japan — Norton Rose Fulbright advises ONE on a JOLCO-based transaction backed by JBIC and NEXI.

📊 Berne Union H1 2025 report shows insurers balancing soaring demand with rising claims, especially in higher-risk markets.

🧾 Digital trade transformation — Carter Hoffman explores why large-scale adoption remains stalled, and how MLETR-led legal reforms may finally shift the needle.

🧮 DIFC court ruling: WhatsApp extensions and LC catchups weren’t enough to override a penalty clause—late payments resulted in a US$770k judgment.

In Treasury & Payments:

💳 RBC & BMO weigh sale of Moneris, one of North America’s largest payment processors.

📉 India’s corporate sector faces a payment crisis, says Atradius — with rising bad debt and systemic payment risk now overtaking supply risk.

💱 Renminbi remains sixth-most active currency, accounting for 2.88% of global payments by value, per SWIFT’s latest RMB Tracker.

In Multimedia:

🎬 Aircraft recovery with Monarch’s Eric Alsembach – what happens when cross-border leasing deals go bad.

🎬 Factoring and frontier tech with Comarch’s Karol Leszczyński – navigating fraud, resilience, and receivables innovation in LATAM.

🎬 Sustainable trade finance in Africa with ARM Trade Finance – investing in the underserved.

🎬 Chocolate, solar power, and fair trade in Ghana with Fairafric Chocolates’ Michael Marmon-Halm.

🎧 Trade, compliance, and access to finance podcast: Introducing a new sustainbility toolkit for SMEs to navigate the web of complexities in the market, built by Asian Development Bank and International Trade Center

🧠 Plus, our reels education series returns with:

• Isabella Lewis (A&O Shearman) on supply chain disclosure rules

• Sean Edwards (ITFA) on ESG in trade finance

Until next week,

– Deepesh, Eleanor, Joy, Carter

Table of Contents

• Slow read

• Trade digest

• Treasury and Payments Digest

• 🗓️ Upcoming events

• Multimedia from Trade Treasury Payments

  • Videos

  • Reels

  • Podcasts

  • 🏆 GAP of the Week: Alisa Rusanoff, Alternative Ca …

Slow read

The global trade credit and political risk insurance market has remained remarkably upbeat on the back of the realignment of supply chains and shifting trading relations in response to US tariffs. Counterparty risk mitigation has become a C-suite conversation in corporates and banks alike, driving opportunity for the insurance market. Trade protectionism, volatile energy markets, political upheaval, and rising resource nationalism are reshaping risk profiles across Africa, Asia, and the Middle East. Insurers are increasingly focusing on project- and sector-specific coverage, while investors must navigate shifting regulatory frameworks and evolving trade barriers.

The familiar cycles of emerging market debt distress, trade disputes, and geopolitical flashpoints in the credit and political risk insurance (CPRI) market are converging. This new dynamic points to a lasting change in how global trade, investment, and risk are shared worldwide. For Africa, Asia, and the Middle East – regions that have long offered both outsized risk and reward – this convergence is reshaping portfolios, capacities, and underwriting priorities. Now, while the opportunities are clear, the dual challenge for insurers, brokers, and investors is to keep pace with these shifts and to position themselves to better understand where the new flows of capital and commerce, and protections that underpin them, will settle.

In order to mitigate trade counterparty risks, C-suite leaders require more detailed and forward-looking intelligence to explore new markets, sectors, and strategies where opportunities remain viable, offering insights to help stakeholders balance growth potential with disciplined risk management in an increasingly complex environment. Leaders also need to remain aware of emerging opportunities across frontier markets and be able to identify sectors where targeted insurance solutions could be most relevant.

PANGEA-RISK uncovers the forces shaping the CPRI market, turning political shifts, trade barriers, and economic volatility into actionable insights for your risk mitigation strategy.

An insurance market in motion

The CPRI market has been quietly but decisively rebalancing over the course of 2025 in response to several external factors. This trend, albeit evident since at least 2023, has been reinforced by a record number of elections in 2024, ushering in administration changes, the spread of military takeovers in parts of Africa, the rise of protectionist policies globally and, more recently, the growing unpredictability of the Trump administration.

According to Willis Tower Watson (WTW)’s March Credit and Political Risk Insurance Capacity Survey, for the reporting period January to March 2025, demand and available market capacity are both increasing for insurance covering contract frustration and transactional credit risks. At the same time, growth in insurance covering broader political risks (like expropriation, political violence, or government actions affecting investments) is slowing.

Rising geopolitical uncertainty, trade disputes, and changing domestic conditions have made political risk claims more complex and unpredictable, prompting insurers to limit their exposure to general political risk coverage. Instead, insurers are increasingly focusing on covering specific transaction risks rather than broad political risk policies. This does not mean political risk insurance is declining. Rather, as global trade and investment evolve, CPRI coverage is diversifying and becoming increasingly specific. Today, the global environment demands more targeted protection across different asset types and regions. As a result, as global uncertainty reshapes trade and supply chains, CPRI underwriters and brokers report heightened demand, with corporates and banks increasingly prioritising counterparty risk mitigation, creating a clear growth opportunity for the sector.

Overall, coverage for risks such as expropriation, currency inconvertibility, and sovereign default is becoming more selective, with many insurers reducing headline limits and concentrating on specific markets where risk can be more effectively managed. Underwriters appear willing to take on political risk in high-growth, sub-investment-grade economies, provided there is a clear project pipeline, reform momentum, and a realistic view of how risk will be mitigated over the policy term.

Trade digest

Regional economies are deepening ties both to the west with the European Union and to the east with China, investing heavily in infrastructure and expanding domestic manufacturing capabilities. “We’re seeing increased efforts to diversify local economies, expand manufacturing, and strengthen cross-border cooperation,” Zucker said. 

These dynamics are opening space for new financial services and investment opportunities, particularly for institutions with deep regional knowledge and cross-border capabilities.

Crucially, this transition coincides with the rise of the Global South as a force in global trade. Countries long associated with raw material exports are moving up the value chain. “Developing countries are pivoting from raw material exports to sophisticated manufactured goods,” Zucker explained, “which opens new trade corridors for our customers.”

A dynamic risk environment demands dynamic frameworks

Opportunity and risk rarely appear in isolation. As opportunities emerge with new corridors, so too do the complexities and risks of operating within them. Risk, in its many forms, is a constantly moving target, especially in emerging markets where political alliances can be fluid and enforcement uneven.

“The key challenge in these emerging trade corridors is navigating a dynamic and ever-changing geopolitical, credit-risk, and compliance landscape in these volatile times,” said Zucker. RBI’s response has been to institutionalise adaptability. For Elitza Kavrakova, this approach requires not just better tools, but also a broader mindset. 

In her view, risk must be assessed across financial and non-financial dimensions simultaneously. “Developing, what I call, a 360-degree risk view, which includes financial and non-financial risks and getting better at using data is key to better manoeuvre in such a dynamic environment.”

This is particularly the case in sectors with heightened sensitivity. Take for example RBI’s restrictive stance on defence-related activity, which is guided by Austria’s neutrality and international legal frameworks. Transactions the bank processes involving dual-use goods must undergo comprehensive due diligence and end-use verification, with compliance checks integrated at each stage. 

Multilateral institutions also play a supporting role. Kavrakova emphasised that collaboration with partners such as ADB, EBRD, and IFC helps banks to operate more effectively in higher-risk environments. “I wouldn’t talk about de-risking here; rather, better risk management and risk mitigation,” Kavrakova said. “I see the main role of supranational institutions in supporting commercial banks when it comes to developing markets that are still associated with higher credit and compliance risks.”

Uzbekistan, sustainability, and Ukraine’s recovery

Among the emerging markets RBI is focused on, Uzbekistan is considered to be a regional bright spot. With sustained GDP growth of 6.5% annually over the past decade and rapid trade expansion (“Trade turnover hit $24.6 bn by April 2025, with exports up 35% year-on-year,” Kavrakova said), the country is drawing in capital and attention from banks, corporates, and development agencies alike.

Uzbekistan’s transformation is not coincidental. It is the result of what Kavrakova described as “a potent mix of rapid trade expansion, strategic location, infrastructure investment, regulatory opening, global partnerships, and domestic economic reform.” As trade volumes grow, so does the demand for modern trade finance instruments which is a reason why the market is embracing tools like supply chain finance, factoring, and credit lines on top of traditional letters of credit and guarantees.

This same logic is driving new approaches to green finance across the region. With EU-aligned funding streams and sustainability-linked financial products entering the market, the role of regional lenders is expanding. Zucker argued that regional banks are “acting as both enablers and accelerators of sustainable investment at the local level.”

Treasury and Payments Digest

On 7 August 2025, the Dubai International Financial Centre (DIFC) Court of First Instance issued a ruling underscoring how strictly contractual payment obligations are enforced under DIFC law.

In SIG Middle East LLC v Perfect Building Materials LLC, the Court upheld a penalty clause of AED 3,000 per day for late settlement payments. Over the course of months, that added up to AED 2.84 million, which is around USD 770,000. Every defence was rejected, and permission to appeal was refused.

At its heart, the case was about a straightforward commercial debt. SIG Middle East supplied building materials to Perfect Building Materials. When invoices went unpaid, the parties sat down to negotiate a way forward. On 20 April 2022, they signed a Final Settlement Agreement. Under that agreement, the buyer would pay a reduced sum, but only if it paid on time.

Six post-dated cheques were issued to cover the instalments. To make the agreement stick, both parties included a clause that any late payment would trigger a daily penalty of AED 3,000.

That clause was the most important part of the deal. The cheques did not clear on time. Sometimes they were replaced by new cheques. Later, payments were made using letters of credit. In this case, the LC was used not for international shipments, but instead to catch up with overdue settlement payments.

The buyer argued that these later payments through cheques and LCs were accepted in place of the original obligations, that they substituted for the original deadlines and discharged the penalties. By the end of 2023, all of the money owed under the settlement had indeed been paid, but it had always been late. The supplier, therefore, went to court to enforce the penalties.

The claim was brought under Part 8 of the DIFC rules. Part 8 is a streamlined route available where there is no genuine factual dispute and the matter can be decided on documents. The supplier asked only for the penalties, not for the principal debt, which had already been paid.

#TTPulse

🇯🇵 Trade Tech Inc. and TradeWaltz Inc. sign MoU to digitise AEO trade and streamline Japan-US supply chains

🔸Global logistics platform Trade Tech and SaaS-based collaborative trade facilitation platform TradeWaltz have signed a Memorandum of Understanding to promote the GRACE (Global Reliable Authorised Commerce Express) project.

🔸The initiative has an ambitious plan to digitise and streamline trade procedures for Authorised Economic Operators between Japan and the US.

🔸The collaboration between the companies will integrate both companies' platforms to enable seamless sharing of trade-related document data between exporters and importers, allowing customs brokers to submit declarations electronically.

🔸This will also significantly reduce inefficient processes like paper document exchange and manual data entry, facilitating customs clearance of cargo shipments well before vessel arrival.

🔸For AEO operators under the mutual recognition arrangement, this means reduced processing times, shorter cargo lead times, optimised logistics costs, and improved overall supply chain efficiency.

🇯🇵 Japan set to launch first yen-denominated stablecoin for cross-border payments

🔸Japan's Financial Services Agency is poised to approve the country's first yen-denominated stablecoin as early as this autumn.

🔸JPYC will register as a money transfer business within the month to support the issuance of the stablecoin, also named JPYC.

🔸It will maintain a 1-to-1 peg with the Japanese yen, backed by highly liquid yen assets such as deposits and government bonds.

🔸The company targets an ambitious issuance volume of 1 trillion yen (approximately $6.81 billion) over three years, catering to international remittances, corporate payments, and decentralised finance services.

🔸This development comes amid Citigroup projections that the global stablecoin market could expand to $3.7 trillion by 2030.

🗓️ Upcoming events

Featured events by TTP

Partner events

Multimedia from Trade Treasury Payments

Videos

Reels

Podcasts

🏆 GAP of the Week: Alisa Rusanoff, Alternative Capital Solutions, LLC

🌟 Daily Mission:

• Convince technology and humans to speak the same language (preferably in real time)

• Solve the impossible: make global trade as seamless as ordering your morning cappuccino

• Walk 15,000 steps a day with my Scottie dog

🤳 Behind the scenes:

• ☕ Morning ritual: strong Colombian coffee brewed in a Turkish pot, stronger to‑do list

• 🎧 Soundtrack: Ella Fitzgerald, Jacques Brel, and maybe some Stromae

• 📚 Book clubs, long travels, deep conversations and no small talks

🪷 Life Mantras:

• 💡Challenges create new brain patterns and call for creative solutions. I am here for them.

• 📖 I know that I know nothing

📋 Hidden facts:

• 🌍 Born in the country that doesn't exist anymore

• 🎤 I'm a jazz singer with 30+ performances

• 🥩 I could totally thrive on just steaks, fruits and cheese!

Did You Know? More than 90% of SMEs in emerging markets lack clear guidance on which sustainability standards apply to them. Failure to comply can shut them out of export markets entirely.

Till next time,

Trade Treasury Payments (TTP)