Allianz Trade, the world’s largest credit insurer, expects a significant increase in the number of bankruptcies in Germany this year. An increase of 21% is predicted, to around 21,500 cases.
This follows a 22% increase last year and is expected to be around 15% higher than pre-coronavirus levels in 2019. Allianz Trade predicts a further moderate increase of around 2% to around 22,000 cases in 2025.
Concerns are growing over the high number of large bankruptcies among companies with annual revenues of at least €50 million ($55 million). There have already been 40 such bankruptcies in the first half of the year, marking the highest figure for this period since 2015 and more than a third higher than the same period last year.
“When it crashes, it crashes hard,” said Milo Bogaerts, head of Allianz Trade in Germany, Austria and Switzerland. He said large insolvencies often have a domino effect on companies throughout the supply chain, potentially leading to further bankruptcies.
According to Allianz Trade, the cumulative turnover of large insolvencies in the first six months amounted to €11.6 billion, surpassing the total losses for 2023 by mid-year. The average turnover of these large insolvent companies was €290 million, an increase of 85%.
Bogaerts stressed that the construction and retail sectors have been hit particularly hard, with some companies struggling to repay Covid loans or obtain new financing.
The fashion retail sector is also facing ongoing problems due to consumer caution and high container freight rates.
Clinics also face challenges: three of the seven major bankruptcies in the service sector involve healthcare institutions, along with tourism and IT service companies.
