Allianz Trade has released its latest Insolvency Report, providing an analysis of the effects of recent US tariffs, global trade shifts, and updated forecasts for business insolvencies through 2027.
The trade credit insurer projects that global business insolvencies will end 2025 up by 6%, with a peak anticipated in 2026, marking a fifth consecutive annual rise at 5%. A modest decline of 1% is forecast for 2027.
Several 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% this year and next, followed by another 2% in 2027.
Asia has seen significant year-to-date increases in insolvencies in 2025. China is expected to post a 10% rise in corporate insolvencies in 2026, contributing substantially to the global total. India and Vietnam have played key roles in rerouting global trade flows to mitigate the effects of US tariffs.
The region remains exposed to secondary impacts from slowing Western demand and rerouted trade but has temporarily benefited from increased intermediary export activity.
Asia is projected to be 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 anticipated for 2025, with major increases in Hong Kong (33%) and Singapore (22%).
China’s economic slowdown, continued softness in consumer-oriented sectors and real estate, and prolonged export challenges are expected to weigh on activity. Insolvencies in China are forecast to reach 7,300 cases in 2025 (up 9%), 8,000 in 2026 (up 10%), and 8,300 in 2027 (up 4%).
The imposition of tariffs were expected to increase costs for raw materials and manufactured goods, which has a direct impact on claims costs for insurers, particularly in auto and property insurance lines. Supply chain disruptions and material shortages are contributing factors, and insurers are monitoring these developments as they affect both claims and premium pricing.
While property and casualty insurers are directly affected by these cost increases, life and health insurers are more likely to experience indirect effects. Financial market volatility and changes in investment sentiment, driven by tariff-related uncertainty, can influence portfolio valuations and policyholder behaviour.
Globally, insolvencies are projected to rise by 6% in 2025 and 5% in 2026, before a slight 1% decline in 2027. The year 2026 will mark five consecutive years of increases, with levels 24% above pre-pandemic averages. In the first three quarters of 2025, 327 major insolvencies were recorded, averaging one every 20 hours.
Persistent divergence is expected, with the US and China driving global increases, while Western Europe begins to moderate with a 2% decline in 2026. Growth, financing, and fiscal factors remain key headwinds, with construction and automotive sectors identified as particularly at risk.
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