• UK insolvencies forecast to rise 3% year-on-year in 2020, down from 6% in 2019
  • UK GDP growth forecast to creep up 1.0% from 0.8% previously
  • Global insolvencies expected to increase 6% year-on-year

London, 24 January 2020: The number of UK business failures will rise 3% year-on-year in 2020 as the political situation stabilises and GDP strengthens, according to forecasts from Euler Hermes, the world’s leading trade credit insurer.

The findings come from the insurer’s annual global insolvencies outlook report. It predicts the growth rate of UK business failures will slow compared to the 6% increase recorded last year. Euler Hermes has also revised its GDP growth forecast for 2020 up to 1% from 0.8%, due to the stabilisation of the political landscape following last year’s general election.

However, firms still face a number of structural issues to managing cashflow. These include weak investment as they work through excess stock acquired to compensate for a potential hard Brexit at the end of last year, weak demand, which is driving down prices, and the risk of leaving the EU without a trade deal at the end of 2020.

Euler Hermes forecasts global insolvencies will rise by 6% in 2020, a fourth consecutive year of growth, as developed economies and staple sectors such as industrials continue to slow. Ongoing trade disputes, geopolitical uncertainty and social tensions also add to the economic headwinds faced by firms.

Milo Bogaerts, CEO Euler Hermes and Ireland, said: “Good credit management and ‘know your customer’ will be as important as ever this year. Businesses are coping with record levels of bad debt. The most recent data from the Association of British Insurers* show the value of trade credit insurance. Claims received leapt to a record £271 million in the third quarter of last year, and the average bad debt paid was £67,300, the highest ever recorded.”

Euler Hermes’ research predicts that four out of five countries will post a rise in insolvencies in 2020, with Brazil (-3%) and France (no change) the major exceptions among developed economies. Chile will post the biggest rise year-on-year with a 21% increase, followed by Slovakia on 12% and China and Singapore on 10% each. Half of the countries analysed will register more insolvencies in 2020 than before the financial crisis.

Maxime Lemerle, head of sector research at Euler Hermes, said: “A calmer political situation and forecast increase to GDP growth will be welcomed by UK firms but the economy is not out of the woods just yet, as evidenced by another year of increased business failures.

“Uncertainty around the UK’s future trading relationship with the EU, the ongoing US-China trade dispute, rising levels of protectionism and falling consumer spending all weighed heavy on businesses in 2019. While we expect trade growth and GDP levels to pick up this year, a recovery will be limited.”

Insolvencies in 2020 (yearly change in %) Sources: National Statistics, Solunion, Euler Hermes, Allianz Research

(*) Companies with a turnover exceeding EUR50m
Source: Euler Hermes


Notes to editors:

* Press release issued by the Association of British Insurers on 9 January 2020. More details here:



Media Contacts: 

Euler Hermes Media Relations
Adrian Russell
+44 (0)20 7860 2728

David Bertram
+44 (0)161 235 0300

Jan 18, 2022 | News

UK economic growth to outpace global average in 2022

Global trade will expand above the long-term average this year but will be disrupted by labour and supply chain bottlenecks, amplified by omicron in the first half of the year

Jun 03, 2021

First female CEO for Euler Hermes UK and Ireland

Euler Hermes has appointed Sarah Murrow as CEO of its UK and Ireland business, with effect from 1 June and subject to regulatory approval. Read more !

May 25, 2021

Changes in Board of Management and Regional Management teams

Euler Hermes, the world’s leading trade credit insurer, announces key changes in their Board of Management and Regional Management teams.

Mar 26, 2021

Media comment – Suez is not the only block to global trade

The Suez Canal disruption has the potential to cost the world economy up to $10bn in lost trade for each day. Read more !

Mar 12, 2021 | News

Media comment – UK balance of trade

The combination of Covid-19 and Brexit will ultimately prove to be a long-term drag on growth. Exporters will be particularly hard hit. Read more !

Jan 12, 2021

Brexit could cost UK exporters £25bn as full Covid recovery pushed back to 2023

British exporters could lose out on as much as £25bn of trade in 2021 following Brexit and EU exporters could lose €10bn in 2H 2021. Read more!

Dec 30, 2020

Government extends shield to sustain UK trade

The UK government, the Association of British Insurers (ABI), Euler Hermes – the world’s leading trade credit insurer – and other underwriters have agreed to extend the landmark State Support Scheme to protect intercompany trade into 2021.

Nov 24, 2020 | News

Green2Green Single Risk: a pioneer insurance product

Euler Hermes has launched pioneering product will contribute to tackling climate change by insuring green transactions and investing in certified green bonds.

Oct 01, 2020

Euler Hermes Group announces CEO leadership change

Wilfried Verstraete, CEO and Chairman of the Board of Management, has decided to step down from his operational duties after twelve successful years in the role

Aug 21, 2020

First by your side for the road ahead

We have strengthened and enhanced our tools and are also developing new technologies to help our partners connect the dots and act early.