Allianz Trade Insolvency report

Allianz Trade releases today its latest Global Insolvency Report and unveils updated forecasts for 2025 and 2026. According to the world’s leading trade credit insurer, global business insolvencies will keep rising over the next two years: after +10% in 2024, they are expected to grow by +6% in 2025 and +3% in 2026. This would result in 5 successive years of increasing insolvencies (2022 – 2026).

In 2024, business insolvencies increased in four out of five countries

As expected, 2024 recorded another high-speed and broad-based increase in business insolvencies, which meant that most advanced economies have started 2025 with business insolvencies already well above pre-pandemic numbers. According to Allianz Trade, global insolvencies surged by +10% last year (from +7% in 2023), ending 12% above their 2016-2019 average level. The number of business insolvencies increased in four out of five countries, with most recording a double-digit increase.

“North America and Asia both boosted the global rebound, while Western Europe remained a key contributor despite a slower acceleration. In this region, two-thirds of sectors posted a rise in insolvencies in 2024, notably transportation, construction and B2B services, leading close to half of the sectors to surpass their pre-pandemic levels, notably in the most advanced economies. Importantly, 474 large companies went bankrupt globally last year, making it all the more important for companies to closely monitor the risk of domino effects on suppliers and subcontractors”, states Maxime Lemerle, Lead Analyst for insolvency research at Allianz Trade.

2025-2026: The rise in global business insolvencies is far from over

Looking ahead, Allianz Trade experts expect global business insolvencies to rise again in 2025 and 2026, which would result in 5 successive years of increasing insolvencies (2022 – 2026).

“We expect global business insolvencies to increase by +6% in 2025 and +3% in 2026. This upward adjustment results from the risk of delayed easing of interest rates, increased uncertainty and soft demand. Relatively high interest rates could strain highly leveraged sectors and corporates, as well as those that have specific challenges to finance – such as the green transition, AI competition or supply-chain frictions. At the same time, prolonged uncertainty could leave companies in wait-and-see mode, leading to reduced activity to the detriment of already fragile corporates. Meanwhile, there are also other risk factors, such as the persistent lack of economic momentum and the post-Covid clearance of the backlog of insolvencies. The business environment has rarely been so complex and volatile, and corporates should remain alert to avoid non-payment risk”, explains Aylin Somersan Coqui, CEO of Allianz Trade.

These rises in global business insolvencies could have a significant impact on jobs too: according to Allianz Trade, in 2025, this situation will put 2.3 million jobs directly at risk globally (+120k compared to 2024), before a smaller surge in 2026 (+30k).  Western Europe (1.1mn) would lead this global count, ahead of North America (450k), though this represents a 10-year high for both regions. Asia would follow (320k) with a roughly stable annual number since 2022. Globally, the main sectors at risk are construction, retail and services.

Risk of interest rates remaining high, and a potential trade war could drive global insolvencies even higher

Expanding credit can help reduce corporate insolvencies by providing businesses with liquidity to manage debt obligations, sustain operations and invest in growth. Access to credit enables firms to refinance liabilities, bridge revenue shortfalls and avoid bankruptcies, particularly during economic downturns. Although, Allianz Trade expects interest rates to decline both in Europe and in the US, inflationary risks, especially in the US could threaten rate cuts. Should borrowing costs rise and make credit less accessible, this could lead to a slowdown in credit growth, tightening financial conditions, and increasing default risks for highly leveraged firms. Allianz Trade's estimates suggest that a 1% decrease in credit results in an increase in insolvencies in the next 3 months by about +3% in the US, +0.4% in Germany, +1% in the UK and 2% in France.

But according to Allianz Trade, the main upward risk is the trade war looming ahead. “Our insolvency outlook could deteriorate should the European economy perform weaker than expected, with a stronger lack of momentum, or if there is a weaker resilience in APAC and larger headwinds from China, as well as if the outlook for the US deteriorates further. Geopolitics could also be a major factor of turbulence, with the ongoing conflicts in Russia-Ukraine and the Middle East, tensions in the South-China-Sea and with political uncertainties over Taiwan. A full-fledged trade war would increase our insolvency forecast by an additional +2.1pp and +4.8pps, meaning that global business insolvencies would rise by +7.8% and +8.3% in 2025 and 2026 respectively. For 2025-2026, this would mean +6,800 additional cases in the US and +9,100 in Western Europe”, ends Maxime Lemerle.