Worldwide Company Insolvencies Seen +33% In 2009 -Euler Hermes

FRANKFURT (Dow Jones)--Global company insolvencies will rise by one-third this year and stabilize on a high level in 2010, reflecting the global recession and slow economic recovery, Euler Hermes SA (ELE.FR), one of the world's largest credit insurers, said Tuesday.

Euler Hermes, which is also part of the Allianz SE (ALV.XE) group, forecasts a 33% rise in company insolvencies worldwide in 2009, accelerating from a 26% increase in 2008.

In 2010, insolvencies will remain at high levels, reflecting the slow and sluggish economic recovery in industrial countries, Euler Hermes said in its annual survey.

The global recession, which intensified and spread at the beginning of 2009, has been accompanied by an unprecedented rapid deterioration in companies' financial situations, the insurer said.

In 2010, global corporate insolvencies will remain on their high levels, as the economic recovery in the large industrialized countries will be slow and vulnerable, amid domestic demand weakened by rising unemployment and uncertainties regarding household purchasing power, said Karine Berger, head of economic research at Euler Hermes.

Economic output and businesses' profitability isn't expected to return to pre-crisis levels until 2011, as lower sales will continue to require significant adjustments, Euler Hermes said.

Nevertheless, for 2010 the picture is mixed. Corporate insolvencies in Western Europe will rise 3%--after 43% in 2009 and 30% in 2008--but the number will decline in the U.S., Canada, Brazil and in several Asian countries, though it will still remain at high levels.

Euler Hermes said its annual survey includes 33 countries, representing more than 80% of world gross domestic product at current exchange rates for 2008.

Company Web site: www.eulerhermes.com

-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com

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November 17, 2009 08:28 ET (13:28 GMT)


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