Allianz Research

Allianz Global Wealth Report 2024:
Surprising relief

Impact underwriting: Sustainable insurance as an opportunity for society and business

Impact underwriting can offer a ‘double dividend’, generating revenues in a growing market besides realizing positive externalities for society. In this context, we identify 9 fields of sustainable action for the insurance sector.

 

Major insolvencies: Close to 150 large companies went bust in Q2 2020

Our latest reporting of insolvencies of large companies - those with over EUR50mn of turnover - points to a surge in major insolvencies in Q2 2020 after a soft start of the year. Retail, services and energy were the most impacted sectors,  but automotive also stood out with a noticeable increase. What does this mean for companies? As the Covid-19 pandemic creates an insolvency time bomb, we expect a stronger risk of domino effects, notably on fragile providers along supply chains.

 

Covid-19 to increase firms’ liquidity needs to a record USD8tn as payment delays and inventories surge

Covid-19 entails longer payment delays and rising inventories among large corporates. Global firms’ liquidity needs, as measured by Working Capital Requirements (WCR) will increase by +5 days to 74 days in 2020 or USD8tn (+USD140bn). These liquidity needs are unfortunately not on the radar of policymakers, yet represent the equivalent of close to 10% of the global money supply. As a result, suppliers will continue to play the invisible bank to their clients, use more short-term credit lines from banks and look for additional funds from shareholders.