Increasing global political instability, weather-related catastrophes, rising unpaid invoices, and bank demands for collateral are compelling midsize U.S. exporters to purchase export trade credit insurance.

While the insurance, which protects an organization's receivables from losses caused by credit risks such as default, insolvency or bankruptcy, is commonplace in Europe, it has historically been a tough sale in the United States. This is changing, brokers and insurers say.

Approximately $700 million in U.S. premium volume is expected this year by private insurers, excluding government credit risk programs such as the Export-Import Bank, and midsize exporters are buying much of the coverage, said Michael Kornblau, U.S. trade credit practice leader at Marsh Inc. in New York.

“Our figures indicate that premium has been growing the past 10 years and was up 7% in 2012, with all signs pointing to the same growth this year,” he said.

Overall premium volume worldwide is about $9 billion, he estimated, the majority of it produced in Europe, “although the U.S., South America and Asia are the growth markets.”

The rising U.S. appeal of the cover is due in part to the recession that began in 2007.

“All those years of economic volatility took a toll on organizations, compelling a need for financing at a time when credit was scarce or unavailable,” said Frederik Mürer, political and credit risk leader of the Americas at Ace Ltd. in New York.

“With the low interest rate environment, one would think the banks would have flooded the market with easy money, but they were less than willing to lend and far more selective” in choosing clients, he said. “They insisted on some form of collateral. Trade credit insurance can serve this purpose.”

Paul Kunzer, divisional executive of North America trade credit at American International Group Inc. in New York, agreed. “By using credit insurance, companies then add their export accounts receivables to the borrowing base of their asset-backed financing facility,” he said. “In addition, banks have expanded their use of trade credit insurance to provide capital relief for their own credit risks.”

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While many U.S.-based midsize exporters “were on the hunt for economies that were growing faster than the U.S. economy,” when the financial crisis hit, “some of these growing markets soon experienced their own troubles, such as Greece, Italy, Spain and parts of North Africa and the Middle East.” said Anne Marie Thurber, executive vice president and managing director of political and credit risk at Zurich North America in New York.

As U.S. exporters moved into new, untried markets, Mr. Kornblau said, “events like the Arab Spring were too far away to comprehend the implications and their susceptibility to these and other events like the ongoing turmoil in Egypt. They scared the exporters, driving much greater interest in export trade credit insurance.”

Trade credit insurers such as Euler Hermes North America Insurance Co., part of Allianz S.E., are experiencing significant increases in sales.

While the U.S. has less takeup of the coverage, other factors boosting interest include recent catastrophes and increasing anxiety over rising unpaid invoices.

A January study by London-based Lovetts P.L.C. found that the average value of debts handled by the commercial debt recovery law firm increased 38% in the first quarter of this year vs. the first quarter last year, prompting the firm to state that late payment has become a “fact of business life.” Some debts have now passed into the unrecoverable column.

Mr. Kornblau, citing closely held information, said the export trade credit insurance market has experienced an uptick in claims and notices by policyholders of an increase in past due accounts.

Natural disasters such as Superstorm Sandy, the earthquake and tsunami in Japan, and massive flood losses in Thailand and Pakistan have caused many overseas suppliers to default on their payments or go out of business.

One final factor that is encouraging midsize U.S. exporters to buy trade credit insurance is inexpensive pricing. Mr. Kornblau estimated that prices have declined about 7% in the past year, and will continue with 5% to 10% decreases the rest of this year.