About 47% of Australian businesses plan to step up insurance to protect against rising trade credit risk.

A survey by trade credit insurance specialist Atradius finds 71.5% of total sales value from business-to-business customers is made on credit, up from 47.7% last year.

The highest use of trade credit is in the Asia-Pacific region, it says.

About 31% of Asia-Pacific respondents expect an increase in late payments, particularly in long-overdue invoices (90 days or more); 42% plan to increase their use of credit insurance as a result, including 51% of businesses in China and Hong Kong.

Concerns over payment default risk are high due to a challenging trade environment, but only 26% of Australian respondents have a strategic approach to credit management, against a 10% regional average, according to the Atradius survey.

“The level of risk, instability and volatility in the economic climate is increasing daily,” Atradius Chief Market Officer Andreas Tesch said. “Payment defaults across the globe are rising and, with them, we anticipate a steady rise in insolvencies in the coming years.”