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Allianz Pulse 2020: Grim expectations

The second edition of the “Allianz Pulse”, a survey to check the mood in France, Germany and Italy, reveals deep pessimism: 82% of the French, 77% of the Italian and 49% of the German respondents consider the economic outlook as bad.

France, Germany, Italy: Good fiscal stimulus, bad trade deficits?

The unprecedented fiscal stimulus plans launched by European governments this summer (phase II to relaunch growth engines after phase I emergency relief programs) should help to boost economic growth by +2.4pp in France, +2pp in Germany and +0.7pp in Italy over 2021-22. 

 

Q2 GDP Releases: The size of the Covid-19 crater

The Covid-19-related trough has been reached. The GDP figures for the second quarter confirmed the expected historic slump in economic activity in the Eurozone and the U.S. and the different recovery speeds across advanced economies.

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.


Bruised but not beaten, Europe’s textile industry is a perfect candidate for a greener and digital recovery

A Faustian bargain to limit short-term economic pain: Since the onset of Covid-19, policymakers have taken swift and unprecedented action.

European Banks: Could EUR300bn of additional NPLS crunch the recovery?

A Faustian bargain to limit short-term economic pain: Since the onset of Covid-19, policymakers have taken swift and unprecedented action.

Covid-19 and the business insolvency time bomb

Even as economies emerge from lockdowns, we expect the bulk of insolvencies is still to come, largely between the end of 2020 and H1 2021.

COVID-19: Contagion risks also apply to markets

The Covid-19 crisis caused one the most severe financial market turmoil of the last hundred years. A historic slump was followed by a historic rally.