Demand for trade credit and political risk covers are on the rise, fuelled by fears the ongoing US-China trade spat will worsen with repercussions for the global economy, a leading industry researcher says.

Growing political risk, amplified by Brexit and rising populist sentiments in developed economies, are also spurring more businesses to invest in these policies.

“Protectionism, unrest, currency volatility and economic interventionism are prompting a corresponding increase in demand for political risk and trade credit insurance,” Axco Insurance Information Services says.

“The current global political environment is defined by heightened instability in emerging markets as well as the return of political risks in developed economies, where frustrated electorates are newly receptive to the appeals of nationalism, populism and protectionism.”

Axco says the number of political risk insurers has doubled to more than 60 over the past eight years.

Private market capacity in London is about $US3.25 billion ($4.5 billion) for project and trade risks.