Allianz Trade Insolvency Report

Global insolvencies: still waiting for tariffs? Allianz Trade expects further rises in 2025 and 2026, with a turning point in 2027.

According to Allianz Trade, global business insolvencies should rise by +6% in 2025 and +5% in 2026, before declining in 2027 (-1%).

• The impact of tariffs on insolvencies could be delayed to 2026, with a heightened risk of domino effects.
• Strong tech-induced business creation along with a potential burst of the AI boom could also fuel insolvency risks, especially in the US and Europe.
• Asia is on track to remain the largest contributor to the global rise in insolvencies in 2025 and 2026, accounting for half of the global increase.

Allianz Trade releases its latest Insolvency Report, analysing the impact of recent US tariffs and global trade shifts on business insolvencies, and unveiling updated forecasts through 2027. According to the world’s leading trade credit insurer, global business insolvencies will end 2025 on a high (+6%), with a peak expected in 2026 (+5%), marking a fifth consecutive rise in insolvencies. For 2027, Allianz Trade expects a modest decline (-1%).

Asia: three more years of insolvency growth ahead

Asia remains the largest contributor to global insolvencies in 2025-2026, accounting for half of the worldwide increase. Most Asian economies are recording slightly more insolvencies than originally anticipated for 2025, with major increases notably in Hong Kong (+33%) and Singapore (+22%). Several Asian economies will hit multi-year highs in 2025, including South Korea (20-year high), New Zealand (11-year high), Australia (10-year high) and Japan (9-year high). Regionally, insolvencies are expected to rise by +6% for this year and next, followed by another +2% in 2027.

As for China, economic slowdown, likely still-soft domestic activities notably in consumer-oriented sectors and real estate, and simultaneously prolonged challenges on the export side will continue to weigh on the country’s economic activities. With China set to continue the upside trend that started in 2024, insolvencies are expected to reach 7,300 cases this year (+9%), 8,000 cases in 2026 (+10%) and 8,300 cases in 2027 (+4%).

Tariffs: delayed impact, persisting risk

The Trump administration’s sweeping import duties, which will reach an effective rate of 14% by year-end, are having a heterogeneous impact on businesses. US corporates have been quite protected for now, benefiting from foreign exporters’ price adjustments and the widespread rerouting of goods through third countries such as India and Vietnam, keeping costs and bankruptcies contained. However, if global trade slows down, several economies that lean heavily on exports could feel the pinch.

“Over the first half of 2025, the protective effects of tariffs and its mild pass-through helped decrease US insolvencies by -4pps, while positive demand offset most negative effects. But export-driven economies are expected to see rising insolvencies: in the worst-case scenario, Canada could see an additional +1,900 insolvent companies, France +6,000, Spain up to +2,900 and the Netherlands +700. In contrast, we find negligible impact in Germany, the UK, Italy and Belgium, either due to diversified export markets, a higher domestic base or stronger financial positions,” states Maxime Lemerle, Lead Analyst for Insolvency Research at Allianz Trade.

A stronger rise in 2026

This outlook leads Allianz Trade to maintain its global business insolvency forecast for 2025, with a +6% rise expected. This follows a +10% increase in 2024, meaning that global insolvencies will reach their highest level since 2019 and stand +19% above pre-pandemic averages. Year-to-date data already show significant increases across regions, particularly in Asia and Western Europe, with notable jumps in Italy (+38%) and Switzerland (+26%). But what about 2026?

“As mitigation strategies wear thin and secondary effects kick in, the trade war’s effects could soon test corporates’ resilience. Risks of domino effects, through rising number of large insolvencies, are increasing too. This results in heightened non-payment risks: we now expect global business insolvencies to rise by +5% in 2026, up from +3% in our previous forecast. With this fifth consecutive increase, levels will stand about 24% above the pre-pandemic average. However, though the recovery will be gradual, the trend may shift in 2027, with a -1% decline in global business insolvencies,” explains Aylin Somersan Coqui, CEO of Allianz Trade.

Looking ahead, Allianz Trade expects corporates’ resilience to be put to the test by three critical vulnerabilities: 1) subdued economic growth - with the pace in the US and Eurozone expected to remain below the threshold needed to stabilize insolvencies; 2) tight financing conditions - with persistently high interest rates and limited credit supply straining debt-heavy and capital-intensive businesses, especially SMEs; 3) sector-specific weaknesses - with vulnerabilities most acute in construction and automotive due to high interest rates, technological disruption and increased competition.

The tech and AI boom could fuel further insolvencies

In the aftermath of the pandemic, some countries saw a sharp increase in business creation due to faster digitalization and the rise of the gig economy. This proliferation of new businesses increases insolvency risks through multiple mechanisms. Therefore, it is estimated that an end to the AI-induced boom, a shock similar to the dotcom bubble, could lead to an extra +4,500 insolvent companies in the US, +4,000 in Germany, +1,000 in France and +1,100 in the UK.