Global insolvencies: Record high failures of major companies

Global insolvencies: Record high failures of major companies

• On top of the upward trend in business insolvencies, Euler Hermes identifies a record level of failures of large companies – those with over EUR50mn of turnover- with 342 major insolvencies totaling more than EUR205bn in turnover in 2019.
• The increase in major failures accelerated in the last quarter of 2019 with a record number of cases (94) and a new high in terms of severity (their combined turnover increased +16% y/y to EUR60.4bn).
• North America (+29 cases) was the key contributor to the global rebound in major insolvencies, along with Asia (+5). Yet, Western Europe (-9) remained the most impacted region with 133 major insolvencies (compared to 96 cases in Asia).
• The hotspots were retail and services in Western Europe, energy and retail in North America and construction in Asia.
• What does this mean for companies? A higher risk of domino effects with adverse implications on fragile providers along supply chains.

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