Allianz Trade has revised its projections for global business insolvencies, forecasting an 11% rise in 2024, followed by an additional 2% increase in 2025, according to its latest Global Insolvency Report.
The firm expects insolvency levels to remain elevated into 2026, reflecting ongoing challenges faced by businesses worldwide amid weak economic demand, geopolitical risks, and varied financing conditions.
These new estimates reflect a more severe outlook than earlier forecasts. Allianz Trade had previously predicted a 9% rise in 2024, but recent developments have led to an upward revision of two percentage points.
The report also adjusted the expected rise for 2025 from flat growth to a 2% increase, with stabilisation not expected until 2026.
Insolvencies are projected to vary by region.
In the US, a 12% increase is expected in 2025, followed by a 4% decline the following year. In Germany, insolvencies are forecast to rise by 4% before also declining by 4% in 2026.
Meanwhile, France and the UK are expected to see moderate declines of 6% in 2025, with further drops in 2026. In contrast, Italy is projected to see continued increases, while business failures in China will rise from low levels, with gains of 5% and 6% in 2025 and 2026, respectively.
Year-to-date data shows that global insolvencies have already increased by 9%, with the upward trend affecting many regions and sectors.
Allianz Trade’s 2024 global insolvency index is expected to be 13% higher than the 2016-2019 average, although still 11% below the peak seen during the Global Financial Crisis.
Allianz Trade CEO Aylin Somersan Coqui said the ongoing rise in business insolvencies can be attributed to a combination of sluggish global demand, geopolitical uncertainty, and inconsistent financial conditions.
She noted that the phasing out of support measures introduced during the pandemic and energy crisis has left some companies vulnerable, particularly in sectors like construction, retail, and services.
“That’s why countries accounting for more than half of global GDP will be hit by double-digit insolvencies increases in 2024, and two-thirds may surpass their pre-pandemic numbers this year,” Coqui said.
Additionally, large-scale insolvencies have reached record highs, particularly in Western Europe.
This trend poses a significant threat to employment, with Allianz Trade projecting that more than 1.6 million jobs could be at risk in Europe and North America by 2025. This represents 8% of the total number of unemployed, with sectors such as construction, retail, and services most exposed.
Allianz Trade said lower interest rates could provide some relief to businesses by reducing borrowing costs and improving cash flow. However, it warns that rate cuts alone are unlikely to be sufficient to address the financial difficulties faced by many companies.
Maxime Lemerle, lead insolvency research analyst at Allianz Trade, noted that corporates have already been adjusting to higher rates.
He explained that while the expected easing of rates – by 2 percentage points by September 2025 – could reduce the insolvency trend by around 4 percentage points, this would only partially offset the overall rise in US insolvencies and reinforce declines in other regions like France.
