Three risks decide whether an export gets paid, and Berne Union members paid over $11 billion in claims in 2025
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Ossiano Guides · Documents and risk
Buyer risk, country risk and performance risk each have their own tools, from credit insurance at 90 to 95 percent cover to OECD country scores reviewed at least once a year.
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01 · Buyer risk
Buyer risk is the chance that one importer does not pay on time
Every export comes down to one question: will this buyer pay? is the name for that question. The US International Trade Administration (ITA) defines it as non-payment or late payment caused by the importer's insolvency or cash-flow problems, in its Trade Finance Guide. Insolvency means the buyer cannot pay its debts.
The payment terms decide who carries this risk. Under terms, the goods ship before the buyer pays. The ITA calls this a substantial risk to the exporter. Under , the buyer pays first, so the risk sits with the importer.
There are steps in between. Under , the buyer gets the shipping documents by promising to pay on a later date. The exporter then has no control over the goods, and payment on the due date is not assured, the ITA notes. Our guide to the payment terms spectrum walks through each method.
Insurance can take most of this risk away. protects an exporter against non-payment by a foreign buyer, says the ITA. provides 90 to 95 percent coverage. The exporter keeps the rest of any loss. Our guide to trade credit insurance covers the policies in detail.
02 · Country risk
Country risk is the chance that events in the buyer's country stop a payment
Sometimes the buyer wants to pay but cannot. is the risk of loss caused by political, economic and social conditions in a foreign country, in the ITA's words. The ITA lists war, terrorism, riots, revolution, currency inconvertibility, expropriation and changes in regulation. Inconvertibility means the buyer cannot turn local money into the invoice currency. Expropriation means a government takes over private assets.
The OECD scores this risk for each country. Its country risk classification measures two things. The first is : a government stops money being changed into foreign currency or sent abroad. The second is : events such as war, expropriation, revolution, civil disturbance, floods and earthquakes. Both are forms of . This is different from , which is about exchange rates moving.
The scores follow a fixed rhythm. The OECD reviews each country whenever it sees a fundamental change, and at least once a year. The scores are a basic building block of the OECD rules on minimum premium rates for government-backed export credits. A premium is the price paid for cover. No classifications exist before 1997, when the rules were set up.
Banks offer a tool for country risk too. Under a , the buyer's bank promises to pay the exporter against the right documents. The exporter may ask a second bank to add its , a second promise to pay. Exporters ask for confirmation because of the issuing bank's risk, country risk and documentary risk, explains ICC Academy. Our guide to letters of credit explains how this works.
Courts deal with these risks too. In RTI Ltd v MUR Shipping BV [2024] UKSC 18, sanctions were imposed on the parent company of the charterer, the firm that hired the ship, in April 2018. The charterer offered to pay in euros, and to cover the conversion costs, instead of the US dollars the contract required. The UK Supreme Court held that the shipowner did not have to accept a payment the contract did not provide for, unless the contract said so in clear words (paragraph 38).
03 · Performance risk
Performance risk is the chance that a party does not do what the contract says
Some risks are about doing the work, not paying for it. is the risk that one side does not deliver what the contract requires. A buyer who pays early, or who orders a large project, faces this risk.
A bank guarantee covers it. A is an irrevocable undertaking to pay if the customer fails to perform a non-financial obligation, according to the ICC. Irrevocable means it cannot be cancelled on one side's say-so. A non-financial obligation is a task such as delivering goods or finishing a project.
A related tool is the . It pays the beneficiary, the party it protects, on presentation of a complying demand, explains ICC Academy. A complying demand is a claim that meets the guarantee's terms. Under , the ICC rules for these guarantees, the guarantor has five business days to decide whether a demand complies. If it misses that window, it loses the right to say the demand does not comply, the ICC Guide to URDG 758 explains.
Default data shows a small shift. Performance guarantee default rates rose marginally in 2024 compared with 2023, across all three of the ICC Trade Register's measures, reports ICC Academy. Our guide to standby letters of credit vs bank guarantees compares the main tools.
Figure 1 · Interactive
Three risks, three toolkits
Pick a risk. The tiles show how it is defined, measured and covered.
04 · How the market measures it
Default data shows trade finance as a low-risk asset class
The ICC Trade Register tracks how often trade finance goes unpaid. A default is a failure to pay as agreed. The 2025 edition covers about $1.2 trillion of 2024 exposures, says the ICC Market Commentary. An exposure is money a bank stands to lose if a customer does not pay.
"trade finance and export finance represent a low-risk asset class"
International Chamber of Commerce, ICC Market Commentary, Trade Register 2025, October 2025
The Register measures defaults in more than one way. An weights each default by its dollar value. An counts the customers who default. An obligor is the party that owes the money.
Letters of credit held up well. Exposure-weighted default rates on fell in 2024 to just below the seven-year average for 2018 to 2024, reports ICC Academy. Defaults on were almost entirely in Russia.
The exact rates by product are sold separately. The full data pack is available for purchase, the ICC notes, so this guide shows the direction only. From 2026 the report is renamed the ICC Global Trade Intelligence Report.
05 · Transferring the risk
Insurers and export credit agencies take buyer and country risk off the exporter
An exporter can pass these risks to an insurer. The is the industry body for export credit and investment insurers. In 2025 its members insured $3,345 billion of short-term trade, up 11 percent, according to its State of the Industry 2025 data highlights. New commitments fell 18.4 percent to $34.5 billion. This insurance covers losses from events such as war or expropriation.
Claims show the cover at work. Members paid $11,107 million of claims in 2025, up 17 percent, per the data highlights. It was the first year claims passed $11 billion, the Berne Union said in its June 24, 2026 announcement. Its full State of the Industry Report 2025 puts the trade members protected at about 14 percent of world cross-border trade, or $3.71 trillion, in 2025.
Figure 2
Berne Union members in 2025
Each card shows a 2025 total, with its change on 2024 where the Berne Union reports one.
Source: Berne Union, State of the Industry 2025, data highlights, June 2026. Medium and long-term credit claims and trade protected: Berne Union, State of the Industry Report 2025, June 2026.
Governments offer cover too. An is a government-backed body that supports its country's exports. The US agency is the . Its covers commercial and political risks at 95 percent, according to its Multi-Buyer Insurance page. Cover is 100 percent for sovereign (government) buyers and 98 percent for bulk farm goods.
Longer deals can get full cover. provides 100 percent coverage once the buyer has made a down payment of at least 15 percent, says the ITA. Our card on ECA-backed finance explains agency support.
Figure 3 · Try it
What insurance cover leaves with the exporter
Set the defaulted invoice and the cover percent. The retained loss updates.
Cover, percent of the loss the policy pays
Claim payment
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Retained loss
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Net cost with cover
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How it works: the claim payment equals the defaulted invoice times the cover percent; the retained loss equals the defaulted invoice minus the claim payment; the net cost with cover equals the retained loss plus the premium. The premium equals insured sales of $1,000,000 times the premium rate.
Our Research Desk used cover levels of 90 and 95 percent from the ITA Trade Finance Guide range. The premium rate is for illustration and is not Ossiano pricing.
This calculator explains the concept only. Policy terms, waiting periods and exclusions vary by insurer and buyer.
06 · Ossiano view
Each of the three risks now has a published measure and a market to pass it on
OBSERVATION 01
Claims are rising with cover
Berne Union claims paid reached $11,107 million in 2025, up 17 percent, as short-term trade insured rose 11 percent, per the Berne Union.
OBSERVATION 02
Country risk is scored on a fixed rhythm
The OECD reviews every country at least once a year and uses the score in its minimum premium rules. That gives exporters a public reference point.
OBSERVATION 03
Trade instruments hold up as a low-risk class
The ICC Trade Register's headline finding is a low-risk asset class, across about $1.2 trillion of 2024 exposures, per the ICC.
Summary
Buyer, country and performance risk each have a clear definition, a measure and a way to pass them on
Buyer risk, or commercial risk, is the chance that an importer pays late or not at all. Export credit insurance covers 90 to 95 percent of a short-term loss. Country risk is the chance that events in the buyer's country stop a payment. The OECD scores it for every country at least once a year. Performance risk is the chance that one side does not deliver. Performance and demand guarantees cover it.
Berne Union members insured $3,345 billion of short-term trade in 2025 and paid $11,107 million in claims. The ICC Trade Register finds trade finance a low-risk asset class.
Related guides: The payment terms spectrum; Standby letters of credit vs bank guarantees; Trade credit insurance; Know your customer in trade finance; The trade finance gap.
Instrument cards: Trade credit insurance; ECA-backed finance (buyer and supplier credit); Confirmed letter of credit; Demand guarantee (bank guarantee); Standby letter of credit. Every term on this page is defined in the Trade Finance Glossary.
For questions on how these risks apply to existing or planned trade flows, contact the Ossiano Research Desk.
Sources
- Berne Union, Berne Union State of the Industry 2025 (data highlights page), June 2026. Supports: short-term trade insured of $3,345 billion, up 11%; medium and long-term new business of $231 billion, up 17%; new political risk insurance commitments of $34.5 billion, down 18.4%; total claims paid of $11,107 million, up 17%.
- Berne Union, State of the Industry Report 2025 Published, June 24, 2026. Supports: claims above $11 billion for the first time. The State of the Industry Report 2025 itself (June 2026) supports members protecting about 14% of world cross-border trade, $3.71 trillion, in 2025, and medium and long-term credit claims paid of $5,335 million (Table 7).
- Export-Import Bank of the United States, Multi-Buyer Insurance, undated. Supports: commercial and political risks covered at 95%; sovereign buyers 100%; bulk agricultural sales 98%.
- US International Trade Administration, US Department of Commerce, Trade Finance Guide: A Quick Reference for US Exporters (2022 edition), July 2022. Supports: definitions of commercial risk and political risk (page 3); open account and cash in advance risk; documents against acceptance risk (page 12); definition of export credit insurance and the political risks it covers (page 20); short-term coverage of 90 to 95 percent and medium-term coverage of 100 percent after a 15 percent down payment (page 21).
- OECD, Country risk classification (Arrangement on Officially Supported Export Credits), undated. Supports: risks measured (transfer and convertibility risk and force majeure); review whenever a fundamental change is observed and at least once a year; role in minimum premium rates; no classifications before 1997.
- ICC Academy, ICC Trade Register 2025, December 17, 2025. Supports: performance guarantee default rates up marginally in 2024 versus 2023 across all three measures; import LC exposure-weighted default rates just below the seven-year average; export LC defaults concentrated in Russia.
- International Chamber of Commerce (ICC), ICC Market Commentary, Trade Register 2025, October 2025. Supports: headline finding of a low-risk asset class; coverage of $1.2 trillion of 2024 exposures; full data pack available for purchase; definition of performance guarantee (page 34).
- ICC Academy (David Meynell, ICC Banking Commission), Introduction and Types of Documentary Credit, undated. Supports: beneficiaries seek confirmation over issuing bank risk, country risk and documentary risk.
- ICC Academy, Understanding demand guarantees: URDG 758 guide, June 3, 2026. Supports: definition of a demand guarantee as an undertaking to pay on presentation of a complying demand.
- International Chamber of Commerce (ICC Digital Library), Guide to ICC Uniform Rules for Demand Guarantees URDG 758, Chapter 2, 2011. Supports: five business days to examine a demand under article 20, and preclusion if the guarantor fails to decide (paragraph 92).
- UK Supreme Court, RTI Ltd v MUR Shipping BV [2024] UKSC 18, May 15, 2024. Supports: a party need not accept performance the contract does not provide for without clear express wording (paragraph 38).
- International Chamber of Commerce, ICC Global Trade Intelligence Report 2026 (report page), September 17, 2026. Supports: the Trade Register is renamed the ICC Global Trade Intelligence Report from 2026.
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