Global insolvencies expected to grow by +5% in 2026 and +1% in 2027
- For corporates, the pressure comes from underperforming GDP growth, higher-for-longer interest rates and energy costs, on top of the larger number of active companies.
- Globally, 2.7 million jobs are directly at risk in 2026 and 2027, meaning a +180,000 increase compared with 2025.
- AI adoption can accelerate business insolvencies in smaller and less diversified markets due to the competitive wedge it creates between early adopters and laggards.
Allianz Trade releases its latest Insolvency Report, unveiling updated forecasts for 2026, 2027, and the outlook for 2028. According to the world leader in trade credit insurance, global business insolvencies will rise by +5% in 2026 and +1% in 2027, marking five consecutive years of increases. Given the uncertain geopolitical and macroeconomic environment, the peak in insolvencies will be delayed by one year to 2028 (-1%), slightly retreating from very high levels.
Underperforming GDP growth, high energy costs, and higher-for-longer interest rates
Several structural factors explain this persistence. With enduring tensions in the Middle East, GDP growth is expected to underperform compared to the 2023-2025 period[1] while energy costs remain high and governments offer limited fiscal support. In parallel, monetary policy is getting tighter, with higher-for-longer interest rates putting further pressure on the most vulnerable companies. At the same time, the stock of active companies expanded by roughly 10% between 2021 and 2025. This broadens the pool of companies exposed to failure, as many of these young entrants are financially fragile: fewer than half of new companies survive beyond five years in Europe.
“With multiple shocks compounding since the start of the year, much higher-than-expected interest rates are ramping up the pressure on already fragile companies and this will continue: 60% of countries will maintain higher policy rates in 2027 than in the prior 12 to 24 months, inflating funding costs and squeezing margins. In Western Europe, a +100bp rise in bank lending rates would add between EUR 6bn and EUR 10bn in interest expenses, reducing margins particularly in renewables, telecom, and power. Meanwhile, higher-for-longer energy costs will also intensify the pressure on profitability, especially for energy-intensive European industries,” explains Aylin Somersan Coqui, CEO of Allianz Trade.
APAC: rising due to less favorable short-term GDP momentum and adverse monetary conditions
The upward momentum is principally driven by China (accounts for roughly 58% of the regional index) and Japan. In China, cyclical and structural headwinds should persist, notably weakness in households’ confidence, difficulties in specific sectors in overcapacities (such as solar energy) and credit constraints. Insolvencies are expected to increase moderately by +1% in 2026 and +2% in 2027. In Japan, despite the supportive role of AI-linked exports and investments and some fiscal relief, inflationary pressures and financing costs will keep the pressure on firms margins, notably in the B2C sectors. Insolvencies are expected to increase by +6% in 2026 and +2% in 2027, reaching the highest level since 2012. Overall, insolvencies in APAC are expected to rise by +3% in 2026 and +2% in 2027, before stabilizing in 2028.
As for the rest of the region, Australia would reach a record of approximately 11,850 cases in 2026 (+1%) before declining by -4% in 2027, while New Zealand would see a +6% rise in 2026 before declining by -9% in 2027. South Korea is expected to reach a record of approximately 2,560 cases in 2026 (+12%) before stabilizing at +1% in 2027. Hong Kong would see insolvencies rise +6% in 2026 and +4% in 2027 to approximately 710 cases – the highest level since 2005. Taiwan (+36% in 2026 and +3% in 2027) and Singapore (-23% in 2026 and +3% in 2027) would display highly volatile and opposite trajectories, largely due to small-base effects rather than fundamental regime shifts.
More and more jobs at risk, with a new peak in Europe and North America
According to Allianz Trade, roughly 2.7 million jobs are directly at risk in 2026 and 2027. This represents a +180,000 increase compared with 2025, and a +700,000 increase compared with 2023, the first year of the post-Covid rebound in global insolvencies.
“Overall, construction, retail, and services are the most exposed sectors. Europe accounts for almost 60% of jobs at risk (1.6 million) with France, Germany, and the UK leading the way. North America follows, representing 24% of total impacted jobs (650,000). For both regions, this would be a 13-year high. In Asia, the impact is real but more moderate, as the region accounts for only 11% of jobs at risk (305,000),” adds Maxime Lemerle, Lead Analyst for insolvency research at Allianz Trade.
Is AI already increasing business insolvencies?
Allianz Trade conducted an analysis across eight EU economies[2] and nine sectors[3] to identify the main drivers of business insolvencies. The findings suggest that macroeconomic conditions and sector-specific fundamentals remain the dominant determinants, while AI adoption is not yet correlated with insolvency trends. However, it identifies an exception in smaller and less diversified markets.
“Our research suggests that AI adoption can accelerate business insolvencies in smaller and less diversified markets due to the competitive wedge it creates between early adopters and laggards. In Belgium and Sweden, which have the highest AI adoption rate in our sample (35%), we observe that the most digitized sectors are also those recording the highest insolvency numbers. The same pattern emerges from a sector perspective. Information & communication, which is the most AI-intensive sector in our sample (70% adoption), shows higher insolvency figures than the national average in five of the eight countries surveyed,” concludes Mr Lemerle.
[1] 2.6% in 2026, 2.8% in 2027 and 2.6% in 2028 vs 3% in 2025
[2] Germany, France, Italy, Spain, Belgium, Netherlands, Sweden, and Norway
[3] Manufacturing, construction, trade, transportation and storage, accommodation and food services, information and communication, real estate, professional services, administrative and support sersures.
