(13 April 2023 – Global) Allianz Trade, the world’s leading trade credit insurer, has released its Global Insolvency Report predicting a 21 percent increase in global insolvencies in 2023 and a further four percent rise in 2024.
The report warns that prolonged pressure on profitability, weaker cash buffers, and tighter financial conditions are driving the increase, and that the most vulnerable companies will be the most affected.
While the majority of countries are expected to exceed their pre-pandemic insolvency levels by the end of 2024, half of the countries in Allianz Trade’s panel may exceed their pre-pandemic levels in 2023. The report highlights the importance of companies taking proactive measures to manage their risks and mitigate potential losses.
“We calculate that the Eurozone and the United States (US) would need respectively 1.3 percentage points (pp) and 1.5 pp of additional GDP growth in 2023-2024 for insolvencies to stabilise. Additionally, companies will have to watch out for domino effects: the number of insolvencies for companies with more than EUR50 million in revenue is now slightly above pre-pandemic levels. Construction, retail, and services are the most affected sectors,” said Allianz Trade Lead Analyst for Insolvency Research, Maxime Lemerle.