The Hong Kong Export Credit Insurance Corporation (HKECIC) has announced a set of temporary support measures for exporters, intended to address growing credit risk exposure amid continued global trade disruptions and a rise in insolvencies across Asia.
Effective through June 30, 2026, the initiatives are designed to support Hong Kong’s exporting firms by enhancing policy benefits and easing premium burdens.
These adjustments reflect broader pressures facing the region’s export economies, many of which are grappling with elevated default rates and tighter credit conditions.
The updated HKECIC provisions include an extension of complimentary pre-shipment coverage for policyholders under its Small Business Policy until mid-2026. Exporters not covered by this policy will be eligible for a 50% discount on premiums related to pre-shipment risk.
The coverage compensates for losses arising when a buyer cancels a confirmed contract or becomes insolvent prior to shipment, provided the exporter has met the contractual and policy terms.
Additionally, to help companies diversify their export destinations and manage trade costs, HKECIC is adjusting premium rates for emerging markets such as Vietnam, Indonesia, Thailand, and Malaysia. These rates will now be in line with those for traditional markets, aiming to encourage regional market expansion while reducing insurance costs.
The announcement comes as regional businesses contend with escalating insolvency levels. According to a recent Global Insolvency Report from Allianz Trade, global insolvencies are expected to climb 6% in 2025 and another 3% in 2026. These projections signal a fifth consecutive year of rising insolvency cases since 2022, driven by elevated interest rates, constrained access to credit, and persistent economic uncertainty.
The report highlighted notable insolvency increases in Asia-Pacific markets during 2024. Singapore led with a 46% rise, followed by Australia (41%), New Zealand (40%), Hong Kong (25%), South Korea (17%), and Japan (15%). Key industries impacted include construction, wholesale, and professional services.
Looking ahead, insolvency rates are expected to remain high in several Asian economies. Projections for 2025 include a 7% increase in China and moderate growth in Taiwan, South Korea, and Hong Kong. In China’s case, ongoing issues in the construction sector and pressures on export-led enterprises are outweighing the effects of recent stimulus efforts totalling RMB2.9 trillion.
Focusing on other business risks, a study conducted by QBE in late 2024 and early 2025 indicated that SMEs in Hong Kong and Singapore remain exposed to risks they often do not insure against.
Of 600 SME respondents in each city, many reported rising costs and declining profitability, along with cash flow and funding challenges. Despite this, a significant proportion of firms lack coverage for critical risks such as income loss from business interruption, employee attrition, and equipment failure.
On the mainland, regulatory bodies are also acting to stabilise financial markets. Central Huijin Investment Ltd, a unit under China’s sovereign wealth structure, has pledged liquidity support amid the possibility of new US tariffs. In tandem, the National Financial Regulatory Administration has approved an increase in the allocation of insurance capital toward equity investments, reinforcing the role of institutional investors in absorbing market shocks.
