- Global business insolvencies should rise by +6% in 2026. While a moderate decline was expected in 2027, they should eventually stabilize at high levels.
- Compared to Allianz Trade’s pre-crisis forecast, the direct toll from the Middle East represents +7,000 cases for 2026 and +7,900 for 2027.
- All regions recorded noticeable rises except Africa.
- South Africa business insolvencies to reach 1540 cases in 2026 and 1590 cases in 2027.
- A prolonged conflict could push Allianz Trade’s forecast up to +10% in 2026 and +3% in 2027.
How much will the Middle East crisis increase non-payment risk for corporates? Allianz Trade releases its latest Insolvency Report, unveiling updated forecasts for 2026 and 2027. According to the world leader in trade credit insurance, global business insolvencies will rise by +6% in 2026 (+6% in 2025). This would result in a 5th consecutive year of growing insolvencies, before plateauing at a high level in 2027. However, a prolonged conflict would amplify insolvency risks.
The Middle East conflict will drive up global business insolvencies
The Middle East crisis has amplified volatility and uncertainty across energy markets, shipping costs and global supply chains. Beyond the immediate disruption, second round effects point to accelerating inflation, tighter financial conditions, and a deterioration in business confidence.
“This situation is driving up costs across global value chains, from agrifood to manufacturing, healthcare and technology. It also exacerbates pressures on energy-intensive sectors such as transportation, chemicals and metals. The combination of weaker demand, rising input costs and tighter financial conditions is straining companies with weak pricing power, thin margins, high debt levels or structurally higher working capital requirements. Compared to our pre-crisis forecast, the direct toll of the Middle East conflict will be an additional 7,000 global business insolvencies for 2026 and 7,900 for 2027,” explains Aylin Somersan Coqui, CEO of Allianz Trade.
Prolonged geopolitical and economic shocks could amplify insolvency risks
If the Strait of Hormuz remains blocked for longer, second-round effects could amplify with a sustained disruption of global oil and gas supply, as well as other commodity supply shortages (fertilizers, helium). This combined with rising inflation, a drop in confidence and lower growth would push up insolvency risks.
“A sustained and widespread escalation would see global insolvencies increase by +10% in 2026 and +3% in 2027. This would translate into around 4,100 additional insolvency cases in the US and 10,500 in Western Europe over the 2026–2027 period,” adds Maxime Lemerle, Lead Analyst for insolvency research at Allianz Trade.
Allianz Trade expects the continuous decrease in business insolvencies in South Africa
In South Africa, Allianz Trade expects the continuous decrease in business insolvencies that has been the trend since 2020 to keep on softening and lead to a plateau in 2026. Last year ended with a reduced decrease (-1%) compared to the previous two years (-6% and -13% in 2024 and 2023, respectively). Business insolvencies reached 1,534 cases, i.e. a new low level in a historical perspective (18% below the last 10-year average and 40% below the last 20-year average). The current environment is likely to reshape the insolvency outlook as the crisis in the Middle East is reversing the tailwinds that were in place the past years notably interest rate cuts, lower fuel prices, business sentiment, economic momentum. We expect business insolvencies to reach 1540 cases in 2026 and 1590 cases in 2027.
“While South Africa has benefited from a multi‑year decline in business insolvencies, the environment is clearly becoming more fragile. Global geopolitical tensions, particularly in the Middle East, are reversing some of the tailwinds that supported local businesses in recent years. As cost pressures rise and financial conditions tighten, South African companies will need to reassess their risk exposure and place greater focus on cash‑flow resilience and credit risk management,” explains Luke Morawitz, Country Manager, Allianz Trade South Africa.
Globally, the number of jobs at risk could increase by +94K in 2026 due to business insolvencies
With a +6% rise in global business insolvencies in 2026, Allianz Trade estimates that 2.2 million jobs would be directly at risk. This results in a +94K increase compared to 2025.
“Construction, retail and services would be the main sectors at risk. Europe, with 1.3 million people potentially affected, leads the global count. Western Europe (~960K) and North America (~460K) both record a 12-year high. Overall, jobs at risk due to business insolvencies would represent 6% of the total number of unemployed people in the US and Europe,” ends Maxime Lemerle.
Download the full report here: https://www.allianz-trade.com/en_global/news-insights/news/insolvency-report-2026.html
For more articles like this click here.
If you enjoyed this website then check out our other sites: Wedding and Function, Home Food and Travel, Kids Connection, Thirsty Traveler, Bargain Buys, Boat Trips for Africa.
Need help with your online marketing then visit Agency One