Updated on 24 December 2025
The fifth consecutive year: Global insolvencies set to hit a record high through 2026
The global business environment faces a prolonged period of elevated risk. Allianz Research expects global business insolvencies to rise by +6% in 2025, and again by +5% in 2026, before a modest decline in 2027. This marks the fifth consecutive year of increases, pushing global bankruptcies +24% above the pre-pandemic average. This sustained surge is driven primarily by North America and Asia, underscoring the necessity for robust credit risk management.
Summary
Key takeaways
- Record High: Global insolvencies are projected to rise for five consecutive years (2023-2027), reaching +24% above the pre-pandemic average.
- Regional Drivers: Asia and North America will drive the bulk of the increase in 2026. Asia accounts for half of the global increase in both 2025 and 2026.
- Contrasting Trends: While Western Europe is projected to see a modest decrease of -2% in 2026 , countries like the US and China are expected to post further increases of +8% and +10%, respectively.
- Job Risk: The extended rise in insolvencies will put 2.1 million jobs directly at risk globally.
Global insolvencies reach a record high
The upward trend in business failures is persistent, marking the 12th consecutive quarter of rising insolvencies since mid-2022. Regionally, year-to-date data for 2025 already shows significant increases across regions, particularly in Asia (+39% year-on-year) and Western Europe (+38% in Italy and +26% in Switzerland). While some countries like India, Taiwan, and Canada are seeing double-digit decreases in 2025 , three out of five countries globally are still recording an annual rise in insolvencies.
North America and Asia lead the global increase
Regional divergence will persist through 2026. Asia is on track to remain the largest contributor to the global rise in insolvencies in 2025 and 2026, again accounting for half of the global increase. This is largely due to countries like China, which is set to see a +9% rise in 2025 , followed by another +10% increase in 2026. Similarly, the US is projected to prolong its rebound with an increase of +9% in 2025 and +8% in 2026. In contrast, countries like the UK and Spain are stabilizing , and Western Europe is expected to see a moderate decrease of -2% in 2026.
Large firms are not immune: the domino effect risk
This surge is not limited to smaller firms. Over the first three quarters of 2025, 327 major insolvencies (firms with annual turnover exceeding EUR50mn) were recorded. This translates to more than one case per day , with the most affected sectors globally being Services, Retail, and Construction. These large failures are significantly fueling the risk of a domino effect across extensive supplier networks, potentially boosting insolvencies among smaller firms.
Three financial headwinds to monitor
Three cyclical factors could turn into major headwinds, sustaining the high insolvency levels:
- Growth Gap: Economic growth could remain below the critical threshold needed to stabilize insolvencies. For instance, the Eurozone is expected to fall short by 0.3 percentage points (pp) in 2026.
- Financing Squeeze: Financial conditions may remain tighter than expected, particularly straining debt-heavy and capital-intensive SMEs.
- Fiscal Discipline: Fiscally-incentivized sectors, such as Construction, could suffer from more fiscal discipline in public infrastructure spending.
Conclusion
The global economic landscape for 2026 is defined by persistent financial vulnerability. As insolvencies hit record highs, businesses must rigorously assess their credit exposure and the resilience of their supply chains.
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