Munich, Frankfurt These are figures that are frightening at first glance: it is said that this year there will be 16 percent more insolvencies, with a nominal impact of 17,000 companies. In 2024, the number is expected to rise another six percent. More than 18,000 other companies could then join Germany go bankrupt. that’s the forecast Allianz Trade, Allianz credit insurer.

“We don’t see a wave of bankruptcies in this, but a normalization,” says Milo Bogaerts, CEO of for a year. alliance Trade for the region of Germany, Austria and Switzerland, in an interview with the Handelsblatt. After all, the insolvency figures were at their lowest level since the 1990s until the outbreak of the corona pandemic and have only been rising ever since. The Leibniz Institute for Economic Research Halle (IWH) also recently wrote that German insolvency figures remain low in a long-term comparison.

This is largely due to government support programs since the outbreak of the corona pandemic. “By 2023, some 2,600 companies in Germany will have been saved from bankruptcy,” Bogaerts estimates. In similar phases in the past there have been significantly more bankruptcies.

the allianceThe subsidiary Allianz Trade, formerly known as Euler Hermes, is the world leader in the commercial credit insurance market with a market share of around one third. The last few years with the pandemic, the Russian war of aggression in the Ukraine, rapid inflation and high energy prices have been particularly challenging.

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Some risks had to be completely reassessed or reassessed because the damage had increased massively. The insurance industry association, GDV, At the end of last year, it already registered an increase in claims in goods and surety insurance by around half to almost 700 million euros.

More resistant to crises than the European competition

This year, threats to business continue to grow, albeit in different areas. recently has the industrial insurer AGCS, which also belongs to Allianz presented its barometer on the most important business risks this year. Consequently, German companies most frequently fear business interruptions, followed by concerns about cyber incidents and the energy crisis.

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In addition, fears of persistently high inflation and a possible recession are growing. The pandemic, on the other hand, is no longer in the top ten of greatest dangers. Natural disasters and climate change also lag behind in the world ranking.

Bogaerts sees the biggest challenges for Germany since the postwar period in the current situation. It is now paying off that the German economy is in a good position. Above all, well-funded midsize companies are robust in the face of a multitude of external shocks. Therefore, Germany is not threatened by a wave of insolvencies.

“That is why we do not expect a deep recession in Germany, but a slight contraction of the economy of 0.7 percent this year,” he says. Bogaerts. Not bad news, according to the Dutchman, but even a mild recession is still a recession. By 2024, he forecasts a slight growth of 0.6 percent for the German economy.

They are also moving into the Netherlands, Sweden and Norway. bankruptcies below the level before the outbreak of the corona pandemic. According to Allianz Trade, companies from neighboring countries have more difficulties. In France and Great Britain, for example, the bankruptcy figures are already significantly higher than in Germany. The credit insurer expects corporate bankruptcies to rise around 20 percent worldwide this year.

Milo Bogaerts

The Allianz business manager observes that companies around the world are paying their invoices later and later.

These are warning signs for the German economy, which is particularly dependent on exports. After all, partner companies that are in financial difficulties are also a burden on German companies.

“In general, payment practices have deteriorated,” Bogaerts observes. While in Germany invoices are paid after 54 days and therefore only two days later than in the reference year 2008, companies from other countries have to wait longer for their money.

Between 2008 and 2021, invoices were paid around the world after an average of 57 days. In the 2022 crisis, payment behavior decreased again. According to Allianz Trade, invoices were paid seven days later than the previous year through the third quarter.

There has been no such increase in the last 13 years. “In general, we see that companies that always miss payment terms are also the first to make payments in full,” says Bogaerts. Especially in southern and eastern Europe, the payment terms are handled more flexibly than in Germany anyway.

Construction industry particularly often in arrears

There are also important differences between individual sectors. Above all, the payment behavior in the construction industry last year they fell sharply worldwide (ten more days until the bill is paid), in the electronics sector (plus nine days), in hotels and kitchenware (plus seven days each). On the contrary, you pay for it. financial service providers their bills are now even two weeks earlier, three days for computer and IT companies and two days for energy companies.

The main reason why companies postpone paying their bills is the massive increase in oil, gas and electricity prices, which are hitting them hard. Energy-intensive sectors, such as the metal or paper industry, in particular, feel this.

According to Allianz Trade, many companies are now being helped by the financial cushion they have built up over the years. But that does not solve the fundamental problem. “The energy crisis is the biggest blow to business profitability, especially in Europe,” he warns Ludovic Subran, Chief Economist at Allianz.

However, all these are only general indicators to take out credit insurance. In principle, Allianz Trade looks at each company individually before closing a deal, explains Germany boss Bogaerts. It does not matter from which country the client or clients of the client come from.

Increased risks would generally mean more new business for Allianz Trade. After German exporters sought security. “If payments arrive later, customers often want to protect themselves,” says the Allianz business manager.

For retail banking companies, inflation brings another challenge as people have less money to spend. “With the exception of groceries, you will continue to see a great reluctance to buy most products,” Bogaerts predicts of retail. As before, many are likely this year microenterprise suffer it.

But it could also affect large retail chains that have failed to position themselves for the future. Last year, among other things, the Galeria department store chain and shoe retailer Görtz file for bankruptcy.

For the year just starting, Allianz Trade forecasts a slight decline in inflation in Germany to 6.8 percent before it nearly returns to normal at 2.4 percent in 2024. After all, there are signs of slight progress in supply chains due to the gradual opening of the Chinese market. “Even if the restart is bumpy, this will be good for global trade in the medium term and lead to a loosening in supply chains,” Bogaerts expects.

More: Defaults in Germany skyrocket

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