04 April 2024
An accelerating rate of insolvencies is a call to action for businesses everywhere to protect their financial interests.


  • Global business insolvencies rose from +23% in 2022 to +29% in 2023, marking the sharpest increase since 2009, with notable surges in the US (+40%) and Western Europe (+15%).
  • Predictions for 2024 suggest a further acceleration in global insolvencies, driven by factors like sluggish global demand and geopolitical uncertainties.
  • To mitigate risks, businesses can diversify client bases, strengthen financial risk management, opt for trade credit insurance, and adopt agile practices for resilience amid rising insolvencies.


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The trend is unmistakable: trading environments, both globally and in the majority of advanced economies, are becoming more vulnerable. And it is a pattern that businesses ignore at their peril.

Around the world, the average increase in business insolvencies accelerated from +23% in 2022 to +29% in 2023, according to the Global Insolvency Outlook from Allianz Trade. And there is no let-up – at least for now: the early months of 2024 show the pace of bankruptcies rising at above pre-pandemic levels.

The causal factors are complex, but to give the figures a historical context: they represent the greatest rise in business failures since 2009 when the global financial crisis was still in full flow and annual bankruptcy rates were rising at +33%.

What is surprising about the current momentum is its reach. In three out of four countries worldwide, the number of business insolvencies jumped in 2023 , with most recording a double-digit increase. The main exceptions were emerging markets, principally the BRICS countries. When those are rolled into the calculation, the Allianz Trade Global Insolvency Index shows an increase of +7% year-on-year, up from +1% in 2022.

The picture in North America was particularly notable, with the US recording a surge in business insolvencies of +40%. Though less turbulent, Western Europe remained a key contributor to the global trend, with an uplift of +15%.

How that is playing out in 2024 should be a consideration for businesses everywhere – but especially for those trading in or with certain countries: the largest increases in bankruptcies are likely to be in the Netherlands, where the prediction is of a +31% year-on-year rise, the US (28%) and Spain (+28%) . At a global level, our economists see an acceleration in business insolvencies of +9% this year, with business environments in four out of five countries experiencing insolvencies increasing +12% on average.

There are many interconnected factors that will determine how the business climate develops over the year, not least of all the fact that citizens in countries that account for 60% of global GDP are voting for their next governments – and their economic agendas . Successfully navigating such uncertainties will involve some prudent choices for business leaders. 

Looking forward, companies can expect a slightly more stable picture in 2025. The Global Insolvency Index points to the majority of countries experiencing a fall in the rate of insolvencies – an average decrease of -9% – even if the rate of bankruptcies will remain at a historically high level.

The economic signals for 2024 that suggest you should be strengthening your business’s defenses:


  • The impact of slower global demand  In the US, Europe and some emerging markets, GDP growth will be either absent or in low single digits. Prolonged weak demand will result in increased competition, leading to reduced pricing power and declines in revenue growth. That is likely to make trading less profitable at a time of still-high operating costs, with little relief expected from lower energy prices or moderated labor costs.
  • Unpredictable geopolitics  Coming on the back of the economic shocks of recent years, business uncertainty will be further influenced by general elections around the world, including those in countries that account for 60% of global GDP. That situation will add a layer of complexity and risk to operations by making it harder to accurately forecast and make business plans.  
  • The cost of money  Although inflation rates are expected to fall back during 2024 in many economies, cautious central banks are unlikely to cut interest rates significantly in the short term. With the cost of financing remaining relatively high, companies will find it challenging to sustain their capability to absorb the costs of higher-rate borrowing and mitigate the pressure on overall profitability. At the same time, the limited availability of financing will put some of the more exposed sectors and firms at risk.
  • New businesses face their first real resilience test  The post-pandemic acceleration in business creation is likely to push up the ‘natural’ rise in business insolvencies during 2024. In Europe, for example, new business registration was +14% higher in 2021-2023 compared with 2016-2019, and the 2024 business environment will be the first true test of their resilience, especially in countries that saw the birth of most new businesses, notably France (+47%), the Netherlands (+28%) and Belgium (+14%).
  • Key sectors face higher levels of risk  The sectors and firms most exposed to the risks of a prolonged period of weaker demand and high financing costs are those that rely on discretionary spend (manufacturing/retail of non-essential goods, hospitality, leisure activities) and those in labor-intensive industries (construction, transportation, hospitality, healthcare, and some areas of business services). That could be particularly acute for construction and real estate in Europe, where the continuation of the most recent pace would mean that in 2024 around 16,000 firms going bust in France, 7,000 in the UK, 4,000 in Germany and 2,000 in Italy.

Until there is some relief from insolvency acceleration (expected in 2025), enterprises need to adopt proactive measures to fortify their defenses and mitigate potential risks. By diversifying their markets, practising sound financial risk management, embracing trade credit insurance, and adopting agile business practices, they can effectively shield themselves against the worst effects of insolvencies, ensuring resilience in an uncertain economic climate.

The specter of multi-year increases in insolvencies poses substantial risks to businesses in many sectors. To navigate these turbulent times, companies can turn to a variety of strategic measures to fortify their defenses. Here are four strategies businesses can adopt to mitigate the impacts of rising insolvencies:

1. Diversify your client bases and supply chains  Businesses can act to diversify their client bases and supply chains so they reduce dependency on a single market or supplier. By expanding their pool of customers and putting in place sourcing arrangement with multiple suppliers, companies can mitigate the adverse effects of insolvencies within specific sectors or regions. Although not always an option for companies with highly specialized supply chains, this strategic manoeuvre can enhance resilience against disruptions and bolsters the overall stability of a business’s ecosystem.

2. Strengthening financial risk management  Robust financial risk management practices are paramount in safeguarding businesses against the fallout from insolvencies. Enterprises can intensify their efforts to assess, monitor and mitigate financial risks through prudent measures such as enhanced due diligence on potential partners, rigorous credit evaluations and the establishment of stringent credit policies. By adopting a proactive approach to risk management, businesses can preemptively identify vulnerabilities among key suppliers and implement appropriate measures to protect their trading networks and interests.

3. Protect your business with trade credit insurance  In response to a rising threat from insolvencies, many businesses rely on trade credit insurance as a vital safeguard against potential losses arising from non-payment or default by customers.  Trade Credit Insurance provides your business with financial protection and peace of mind by indemnifying you against losses incurred due to insolvency or protracted default. By using the services of an insurer such as Allianz Trade, your company will have access to deep insight into the creditworthiness of your suppliers worldwide, expertise in areas such as risk and cash flow management, and an assurance that you will be paid in full if buyers go under. That safeguards the business’s cash flow, maintains its liquidity, and sustains uninterrupted operations, even in the face of widespread insolvencies.

4. Adopt agile business practices  Faced with a worrying insolvency picture, businesses can embrace agility as a core tenet of their operational strategy. Although not a financial guarantee, fostering a culture of flexibility, adaptability and innovation can help companies swiftly respond to changing market dynamics and mitigate the impacts of insolvencies on their operations. That might involve leasing rather than buying plant and machinery or breaking down projects into discrete jobs so the impact of any partner or customer bankruptcy is minimized and the business can pivot quickly to alternative opportunities.

 Discover more about how Trade Credit Insurance can allow your business to trade with confidence.