German insurer Allianz says global insolvencies to grow during 2024

DPA
·2 min read
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A man walks past the Allianz logo in Munich. Armin Weigel/dpa
A man walks past the Allianz logo in Munich. Armin Weigel/dpa

According to credit insurer Allianz Trade, companies worldwide will face an increase in insolvencies for the third year in a row in 2024.

"This trend will also apply to Germany - albeit with a delay compared to most other European countries," predict the economists at the Hamburg-based Allianz branch.

"According to the Allianz Trade Insolvency Study, the ongoing economic weakness, structural challenges and tighter financing conditions are likely to cause even more German companies to get into financial difficulties in 2024."

According to the study, the number of insolvencies among German companies is likely to increase by 13% in 2024 compared to the previous year.

"This increase has already begun, particularly in the second half of 2023," said Milo Bogaerts, Head of Allianz Trade for the German-speaking region.

Here, the number of insolvencies has visibly accelerated with a 25% increase compared to the second half of the previous year, "with the hospitality industry, retail, construction and B2B services making a significant contribution."

B2B (business to business) refers to transactions between companies, not with consumers.

In line with this trend, the analysts at Allianz Trade expect the number of company bankruptcies in Germany to rise to around 20,260 in 2024.

Due to the anticipated recovery of the German economy it is expected to stabilize at a slightly lower level of just under 20,000 in 2025.

Globally, the Allianz Trade economists expect the number of cases to increase by 9%. They cite lower growth, trade disruptions and geopolitical uncertainties as the decisive factors for this.

The largest increases are expected in the US and Spain, both up 28 %, and the Netherlands, up 31%, economists said.

"This broad-based increase would mean that the number of insolvencies in 2024 would exceed the pre-pandemic figure in two out of three countries. In 2023, this was still the case in half of the countries," says the head of the Allianz Trade Group, Aylin Somersan Coqui.

However, Allianz Trade does not expect "a tsunami of corporate insolvencies like the one we saw after the global financial crisis, when global insolvencies skyrocketed by 17% in 2008 and 2009."