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2025 produced record insolvency numbers… expect more in 2026.

The past year has been one of the most challenging periods businesses have faced for some time. Throughout 2025, we saw a sustained rise in corporate insolvencies across a wide range of industries. Increasingly, businesses that successfully navigated the disruption of the pandemic years and the initial recovery period are now finding the cumulative impacts of higher costs, tightening credit conditions and weaker demand too difficult to absorb.

What is particularly notable is that insolvencies have not been confined to poorly run businesses. Well-established operators with long trading histories, strong reputations and previously stable cash flows have also found themselves in financial distress. The pressures of interest rate uncertainty, rising wage and input costs, ATO debt recovery actions and customers exceeding payment terms, have eroded resilience and profits at a rapid pace.

Some notable casualties:

1. Stokes Wheeler, a Queensland builder that went into liquidation with more than $20 million in debts after consecutive loss-making projects and an unsuccessful rescue attempt.
2. Boss Adventure and Hitch & Go, national caravan manufacturers, also failed as key customers departed and rising costs eroded margins.
3. Exoticathletica, a popular women’s activewear business owing more than $13 million

Well-recognised names that had operated for years found themselves unable to absorb the cumulative pressures of rising costs, tighter credit conditions and subdued consumer demand.

So, what’s the outlook for 2026?

There is little to suggest that these pressures will ease in the near term. As we move into 2026, indicators point to another year where business failures remain elevated. While some macroeconomic measures show signs of stabilisation, the reality on the ground for business owners is that margins are thin, access to finance is tighter and the risk of non-payment has increased.

In this climate, directors and credit managers are taking a far more disciplined approach to understanding who they are trading with, how exposed they are to individual customers and what protections are in place if a debtor fails. Trade Credit Insurance has become a central component of that risk-management framework. Beyond providing protection when a customer becomes insolvent.

Pricing, capacity and compliance also matter. Businesses want confidence that their insurer will stand behind the policy, pay claims without unnecessary friction and support them in navigating complex insolvency scenarios. At NCI, we continue to see strong demand from clients seeking not only protection but practical guidance, insight and partnership for when they need it the most.

Ignoring the current risk environment is not an option. The experiences of 2025 have shown how quickly circumstances can change and how vital it is to plan in 2026.

As we look to the year ahead, the expectation is that businesses will be in control of their performance. Insolvencies are likely to remain elevated in 2026 and preparation, protection and informed decision-making will be key to navigating what lies ahead.