Allianz Warns: Iran Conflict to Drive 15,000 More Firms into Insolvency Globally
Zurich, Switzerland – The escalating conflict involving Iran is projected to push more than 15,000 additional companies worldwide into insolvency over the next two years, with Asia bearing the brunt of over half the economic damage, according to a stark warning from Allianz Trade.
Global Business Failures on the Rise
In a significant upgrade to its Middle East risk outlook, the trade credit insurer now forecasts a 6% rise in global business failures by 2026, marking a fifth consecutive annual increase. This trend is expected to plateau at elevated levels in 2027. Allianz Trade estimates the conflict alone will add 7,000 insolvency cases next year and a further 7,900 in 2027, exceeding pre-crisis assumptions.
This revised forecast represents a pointed departure from Allianz Trade’s October 2025 outlook, which had predicted a 5% rise in 2026 followed by a 1% dip. Even then, the insurer had noted 327 major insolvencies in the first nine months of 2025, or one every 20 hours, and warned that 2026 would see failures 24% above pre-pandemic norms.
Impact of Recent Escalations
The updated projections account for the fallout from the US-Israel military campaign against Iran, launched on February 28, which triggered Iranian missile retaliation across the Gulf and led to the closure of the critical Strait of Hormuz. A two-week ceasefire was brokered by Pakistan on April 8, and US President Donald Trump later extended the truce indefinitely on April 22. However, reported Iranian strikes on three vessels in the Strait on the same day have kept global markets on edge.
Economic Repercussions
Since these events, energy prices, shipping costs, and supply chains have experienced significant volatility, fueling inflation, tightening credit conditions, and eroding business confidence. The Strait of Hormuz is a vital chokepoint, handling approximately one-fifth of global oil consumption and about 20% of liquefied natural gas trade. Its closure has sent ripples far beyond the immediate region.
“This situation is driving up costs across global value chains, from agrifood to manufacturing, healthcare, and technology,” stated Aylin Somersan Coqui, chief executive of Allianz Trade. She emphasized that companies with thin margins, weak pricing power, or heavy debt loads are most vulnerable.
Asia to Absorb the Heaviest Blow
Asia is expected to account for 54% of the global increase in insolvencies, with regional failures projected to climb 7% in 2026 and 3% in 2027. China is anticipated to see 9% and 5% rises, respectively, as its property and consumer sectors continue to struggle.
Taiwan faces the sharpest jump in the Asia Pacific, with a 14% increase in 2026. Interestingly, Hong Kong and Singapore are outliers, forecast to reverse recent upward trends: Hong Kong is predicted to fall 2% in 2026 and 10% in 2027, while Singapore is expected to decline 3% and 5%.
Prolonged Strait Closure: A Dire Scenario
A prolonged closure of the Strait of Hormuz would exacerbate the situation, lifting the global insolvency tally by an additional 10% in 2026 and 3% in 2027, compounded by commodity shortages and flagging confidence.
“A sustained and widespread escalation would see global insolvencies increase by +10% in 2026 and +3% in 2027,” confirmed Maxime Lemerle, lead analyst for insolvency research at Allianz Trade. This grim scenario could add approximately 4,100 cases in the US and 10,500 in Western Europe.
The baseline 6% rise in 2026 alone directly jeopardizes 2.2 million jobs, 94,000 more than in 2025, with the construction, retail, and services sectors being most exposed.
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