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.
US tariffs introduced by the Trump administration, with an effective rate of 11% in August 2025 and an expected rise to 14% by year-end, have altered trade flows but have not resulted in a surge in insolvencies.
Large firms benefited as exporters moderated prices and goods were rerouted through countries such as India and Vietnam, containing cost increases. Tariffs also provided protection for US domestic firms from foreign competition.
Insolvencies in the US decreased by around 4 percentage points due to tariffs in early 2025, but higher input costs offset these gains, resulting in a net increase of 4% for the year. Allianz Trade expects US insolvencies to rise by 9% by the end of 2025 as cost pressures and weaker demand persist.
Should the AI-driven boom collapse, the US could see an additional 4,500 bankruptcies. The report notes that credit growth of approximately 2.5% in 2026 is needed to stabilize insolvency levels, but GDP growth is forecast at 1.6%, below the 2.2% required to prevent further increases. Another 8% rise in corporate insolvencies is projected for 2026. Business applications remain 36% higher than the 2016–2019 average, raising financial fragility among new entrants.
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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