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Euler Hermes Global Insolvency Index: Insolvencies to rise in 4 out of 5 countries in 2020

Pressemeddelelse   •   Jan 13, 2020 08:00 CET

  • The upward trend in business insolvencies continued in 2019 for the third time in a row: +9% y/y, according to Euler Hermes Global Insolvency Index, which covers 44 countries that account for 87% of global GDP
  • This year, business failures will rise again for the fourth consecutive year: +6% y/y
  • Asia will be the key contributor to the rise in insolvencies, while Western Europe will see an increase in most countries. USA and Canada have shown increases for the first time in many years in 2019 and we expect +4% and +5% respectively in 2020
  • Failures of large companies – those with over EUR50mn of turnover – remain at a persistent and worrying high level 

Global bankruptcies are still on the rise, implying higher export risks: this is the conclusion of the latest Global Insolvency Report by Euler Hermes, which covers 44 countries and 87% of global GDP and provides the last update of its Global Insolvency Index. Business insolvencies increased by +9% in 2019, mainly due to a prolonged surge in China (+20%) and, to a lesser extent, a trend reversal in Western Europe (+2%) and North America (+3%).

Continuing economic weakness, political and social uncertainties
Euler Hermes’ experts believe this worrying trend is due to the combination of a low-for-longer pace of economic momentum, notably in advanced economies, in the industrial sector, and the lagging effects of trade disputes, political uncertainties and social tensions. In 2020, even if monetary policies should remain supportive, it will not be enough to counterbalance softer demand, tougher price competition and an increase in production costs, notably wages.

Export risks are on the rise almost everywhere
As a result, insolvencies should rise again by +6% globally this year for the fourth time in a row, with Asia still as the key contributor (+8% y/y) notably due to China (+10%) and India (+11%). In Western Europe, economic growth will remain below the historical threshold which usually stabilizes the number of insolvencies (+1.7%), leading to an increase in most countries. All in all, four out of five countries will post a rise in insolvencies in 2020, with Brazil (-3% y/y) and France (0%) as the key exceptions. In 2019, the overall increase was higher, but only two out of three countries were impacted by rising insolvencies. This means that export risks are on the rise almost everywhere: there is hardly a safe haven anymore.

Serious domino effects of major insolvencies
The number of major insolvencies from Q1 to Q3 2019 remained relatively stable year-on-year (249 major insolvencies) but their severity worsened in terms of cumulative turnover (+EUR39.1bn to EUR145.2bn), which could have serious domino effects on providers along supply chains. The greater the turnover of the bankruptcy candidates, the greater the damage to individual suppliers. The hot spots were construction in Asia, energy and retail in North America, and retail and services in Western Europe.

“Overall, this insolvency outlook calls for a close monitoring of trade disputes and other political and policy-related risks, as the level of economic volatility will be very high all along 2020. More selectivity and preventive credit management actions will be needed”, said Maxime Lemerle, Head of Sector and Insolvency Research at Euler Hermes.

Discover the full Global Insolvency Report here, and its corresponding map.

Euler Hermes er global leder i kreditforsikringer og en anerkendt specialist inden for områderne inkasso, garantistillelse og indkassering.

Med mere end 100 års erfaring tilbyder firmaet finansielle services i forbindelse med administration af kontant- og erhvervstilgodehavender for business-to- business-kunder. Virksomhedens eget intelligensnetværk overvåger og analyserer de daglige ændringer i selskabers solvens hos små, store og multinationale selskaber, som er aktive på markeder, der repræsenterer 92 % af det globale BNP. Med hovedsæde i Paris, er virksomheden tilstede i 52 lande med 6.050 medarbejdere. 

Euler Hermes er et datterselskab til Allianz, som er listet på Euronext Paris (ELE.PA) og ratet AA af Standard & Poor’s. Virksomheden havde en samlet omsætning på €2,6 milliarder i 2017 og forsikrede globale forretningstransaktioner for €894 milliarder mod udgangen af 2017.

For mere information, se: www.eulerhermes.comLinkedIn eller Twitter.


Euler Hermes is the global leader in trade credit insurance and a recognized specialist in the areas of bonding, guarantees and collections. 

With more than 100 years of experience, the company offers business-to-business (B2B) clients financial services to support cash and trade receivables management. Its proprietary intelligence network tracks and analyzes daily changes in corporate solvency among small, medium and multinational companies active in markets representing 92% of global GDP. Headquartered in Paris, the company is present in 52 countries with 6,050 employees. 

Euler Hermes is a subsidiary of Allianz, listed on Euronext Paris (ELE.PA) and rated AA by Standard & Poor’s. The company posted a consolidated turnover of €2.6 billion in 2017 and insured global business transactions for €894 billion in exposure at the end of 2017.

Further information: www.eulerhermes.com, LinkedIn or Twitter.