“Rates hardened in reaction to the 2008 financial crisis, but competition quickly returned to the market. But there is now recognition that that may have been premature,” he said. “Underwriters have been keen to lock clients in with multi-year deals, but there is now more likelihood of an increased cost for policies of more than one year.”

Up until the fourth quarter of 2011 there was fierce competition and liberal levels of cover, but now underwriters recognise the situation is changing, said Mr Smith. “The eurozone is now an area of concern, as is a possible return to a recession, and the trade credit insurance market is responding with caution.”

For example, there are concerns within the Greek, Italian and Spanish economies and the risk of default and claims from the corporate world, said Mr Smith. “Cover is hard to find and prices tend to fluctuate,” he said.

“Rates stabilised at the January 1, 2012 renewal, with few decreases but where there is perceived greater risk such as concentration of risk or volatility in the sector which underwriters deem a risk higher exposure, they are looking for increases.

“For renewals in 2012 underwriters are likely to resist reductions and will look for modest increases where justified for higher-risk portfolios.

“For certain sectors, like IT, there is huge demand on key buyer risks with finite market capacity/appetite on offer. Insurers want to use their capacity for the most profitable business,” said Mr Lawson.

The last two quarters of 2011 saw a calming of the credit insurance market for the large corporate sector, following aggressive pricing competition in the first half of 2011, said Jason Curtis, Head of Global at Atradius in the UK. “Prices at recent renewals are not reducing as they were,” he said.

“With current economic uncertainty and an emphasis on delivering quality cover and service, prices are likely to stabilise in 2012,” said Mr Curtis. “Customers should also expect to pay more where there have been claims or where a higher risk portfolio permits, he said.

Credit insurers learnt lessons from the rapid and unexpected economic deterioration of 2008 and 2009, said Mr Curtis. “Credit insurers now realise that portfolio transparency is critical,” he said.

As transparency has improved, cover has risen to pre-crisis levels. “We are writing as much, if not more, cover, but it is better quality and we are more aware of the risks we are writing,” he said.

The escalation of the eurozone crisis has not led Atradius to change its strategy, said Mr Curtis. “We are still providing the same level of risk capacity, and we continue to view risks cautiously where clients do not provide information. We are monitoring buyers more than ever,” he said.

“There are certain regions and risks where we need to be prudent and mindful of the risk,” said Mr Curtis. “Some insurers may have pulled out of markets like Greece, but we are still offering cover, but prudently and transparently with underwriters on the ground,” he said.

“We are still open for cover in Spain and Italy, but we have had to adapt our underwriting stance to match conditions,” said Mr Curtis.

Not surprisingly, these two countries have the steepest spikes in increased claims in the last two quarters of 2011. However levels of claims are still manageable, he said.

And this is not an issue limited to Europe, said Curtis. There are similar problems with increased notifications in the UK, Middle East and some Asian markets, he said.

“Limits are being constantly reviewed and limits changed. There are situations where we have to be more cautious about the risks we write in certain sectors and regions,” said Mr Curtis.

“The levels of cover offered in certain areas will probably not be the same as the start of 2011. A number of debtors will not post financial results in keeping with their existing credit lines,” he said.

Overall insurers say that cover is higher now but there are growing areas of concern, said Mr Smith. “Insurers have begun to see more late payment and overdue notifications increase in the US and Europe in the fourth quarter of 2011, which will eventually result in more claims,” he said.

“Insurers are still keen to provide cover but the market is getting more difficult as underwriters expect losses. The extraordinary price decreases of the past 18 months have not been reversed, but until losses materialise, premiums are likely to stay the same,” said Mr Smith.

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