Corporate Insolvency Services Market

Corporate Insolvency Services Market Outlook (2022-2032)

The global corporate insolvency services market stands at US$ 12.1 billion in 2022 and is anticipated to progress rapidly at a CAGR of 5.4% to reach a market valuation of US$ 20.5 billion by 2032-end.

In the post-2019 world that was led by COVID-19 and the Russia-Ukraine war, most likely followed by a recession, companies are experiencing squeezed profit margins as well as the inability to pay creditors. This has eventually forced several companies into corporate insolvency, and resultantly, there has been an upsurge in the demand for corporate insolvency services worldwide.

Report Attributes	Details
Corporate Insolvency Services Market Size (2021A)	US$ 11.5 Billion
Estimated Market Value (2022E)	US$ 12.1 Billion
Forecasted Market Value (2032F)	US$ 20.5 Billion
Global Market Growth Rate (2022-2032)	~5.4% CAGR
North America Market Share (2021)	~30%
East Asia Market Growth Rate (2022-2032)	~6.1% CAGR
United States Market Growth Rate (2022-2032)	~5.3% CAGR
Key Companies Profiled	ASC Group Baker Tilly US, LLP Binder Dijker Otte Crowe Global Deloitte Ernst & Young Global Limited Evelyn Partners Grant Thornton LLP Haines Watts Group Johnston Carmichael KPMG International Mazars MHA MacIntyre Hudson Moore Global PwC RSM US LLP UHY Hacker Young AZB & Partners Cyril Amarchand Mangaldas Dhir & Dhir Associates J Sagar Associates

Growing Inability of Enterprises to Pay Creditors

The global impact of the pandemic has adversely affected the operations of various organizations. Small and medium organizations with lower liquidity have fallen under financial stress during 2020-2021, which resulted in bankruptcy or the inability to pay creditors.

Enterprises faced disruption in supply chain and operation activities, disturbance in product supply, and inability to gain profitability during the COVID pandemic.

• As per The Organization for Economic Co-operation and Development (OECD), many firms observed a decline in profit during the COVID pandemic by 40% to 50%.

All these factors have substantially resulted in the bankruptcy of small- and mid-size organizations and driven the demand for corporate insolvency service providers. Also, the pandemic’s negative impact on the economy has been observed as an essential factor for business insolvencies. The economic recession resulted in a decline in the profit and sales of large and small businesses alike, which led to the insolvency of many companies. Owing to these factors, the need for corporate insolvency services is growing significantly worldwide.

• Short Term (2022-2025): Post-COVID, many organizations have seen instability in revenue growth and business operations, which has resulted in the insolvency and bankruptcy of these businesses. This has led to positive demand for corporate insolvency services in the market.
• Medium Term (2025-2028): In the mid-term, the market is expected to see a significant rise in demand with the increasingly competitive scenario among businesses. The inability to pay creditors and increasing interest rates have resulted in the disruption of business operations and will drive the demand for corporate insolvency service providers.
• Long Term (2028-2032): Disruption in economies, growth in inflation rates, and recession are expected to drive the demand for corporate insolvency services in developing economies. Also, the rising number of start-ups and new businesses may add to market growth over the long term.

North America leads the global corporate insolvency services market, followed by East Asia. Together, these regions account for over 55% share of the global market and are expected to dominate over the next ten years as well.

Image represents expected global addressable market value at US$ 12.1 billion. Creditors voluntary liquidation services are expected to dominate with a market share of 38%.

Increasing Incidence of Corporate Bankruptcy Worldwide

Increasing interest rates and inflation, lurking recession, and rising competition are some of the major factors leading to the decline of companies' profits and an increase in financial burden. These factors are resulting in the bankruptcy of organizations and resulting in substantial demand for corporate insolvency services worldwide.

Oil & gas, mining, retail trade, manufacturing, and services are sectors that have observed the most bankruptcy filings in a decade. Also, in the United States, around 70 large-sized organizations filed for bankruptcy, of which, around 20 companies were recognized with over US$ 1 billion in assets valuation.

Demand for insolvency service providers is expected to increase to efficiently sort all company assets and distribution to creditors by following the regulations laid down by government bodies.

Technological Innovation in Corporate Insolvency Services

Integration of advanced technologies in the corporate insolvency services sector has helped creditors and insolvency practitioners offer better advice to clients and guide them through the restructuring process.

• For instance, in 2021, a government agency called the Superintendence of Companies, which has been working as Colombia’s bankruptcy court for the last few decades, opted for digital technology in their insolvency module. They are using an artificial intelligence tool that is been hosted on the company’s website to deal with different stages of insolvency proceedings.

Additionally, service providers are opting for electronic liquidation techniques for the faster selling of assets at effective rates.

• For instance, Strategic Auction Alliance and RepoMax are liquidating their stressed properties through online portals such as Ricardo and e-Bay in the form of auctions.

Such factors are bringing flexibility to companies in the insolvency and liquidation process.

Government Initiatives to Rescue Insolvent Businesses

Government initiatives for the rescue of financially-stressed organizations from bankruptcy and insolvency are major factors challenging market growth. Businesses are a core element for economic development and growth. Governments worldwide are supporting businesses to secure long-time financial stability and promoting locally produced goods and services.

With the disruption in the economy, governments are making strategic moves towards the sustainability of businesses and shielding them from insolvency.

• For instance, during the 2020 COVID pandemic, the U.K. government made necessary changes in regulations regarding the support of bankrupt organizations. The initiative is aimed at businesses undertaken by the government and rescuing these organizations from bankruptcy.
• Similarly, the Indian government established the Insolvency and Bankruptcy Code (IBC) to support fresh businesses from liquidation and rescue them from restructuring situations.

With government support, companies can be rescued from insolvency, which will lead to a decreased demand for corporate insolvency service providers.

Country-wise Insights

United States Accounts for Leading Share of Global Market

The United States holds around one-fourth share of the global corporate insolvency services market.

Demand for corporate insolvency service providers is high in the United States. During the COVID-19 pandemic, the economy observed an increase in interest rates, rise in inflation, and a decline in business profits. With such instabilities in the economy, businesses have been making losses, downturn in operational profit, and are unable to pay creditors. This factor has created high demand for corporate insolvency service providers in the country.

The U.S. economy is projected to face a recession by the end of 2022, which is expected to last through 2023. This will result in a downturn in the operations of small and medium businesses and substantially increase insolvency filing procedures.

Market in China Expected to Grow the Fastest

The market in China is expected to grow at a CAGR of 6.3% during the forecast period 2022-2032.

Demand for corporate insolvency services is increasing in China with the growing cases of insolvency and restructuring. Policies related to the improvement of the business environment and reinforcing supply-side structural reforms, coupled with the COVID impact on economic growth, have resulted in a rising incidence of insolvency in the country.

• As per a report published by the Supreme Court of China, around 13,000 restructuring and insolvency cases were filled in 2021 in the country.

The Russia-Ukraine conflict has also resulted in economic chaos, where investors resist investing in businesses, industries' output fell, and the economy faced a shortfall in cash. Such factors have adversely impacted the business operations and revenue growth of small- and mid-sized businesses. As such, the demand for corporate insolvency services is projected to see a significant rise in the country over the years ahead.

Category-wise Insights

Creditors Voluntary Liquidation Serviced to Enjoy Leading Market Share

Creditor voluntary liquidation services are expected to hold a leading share of 38% of the global market. These services have seen high demand with the increased instability of listed organizations during the COVID-19 pandemic.

Bankruptcy filing by listed companies was observed in around 70 firms in the United States in 2021 where an insolvency expert was appointed who produces the company’s statement of affairs and secures a majority of consent regarding liquidation from shareholders to carry out insolvency procedures. This has resulted in higher creditor voluntary liquidation service demand worldwide.

BFSI Largest Customer for Corporate Insolvency Services

Banking, Financial Services, and Insurance (BFSI) account for most corporate insolvency services. Banks offer loans to businesses and individuals who are subjected to the risk of loss if not repaid. The inability of a creditor to repay a loan is expected to exhibit the demand for insolvency services by the BFSI sector.

Moreover, growing banking facilities related to easy loan disbursements to customers have led to a substantial rise in loan and mortgage services worldwide. With the misbalance in the repayment cycle by clients and the condition of bankruptcy, the demand for corporate insolvency services is projected to grow over the coming years.

Competitive Landscape

Key providers of corporate insolvency services are ASC Group, Baker Tilly US, LLP, Binder Dijker Otte, Crowe Global, Deloitte, Ernst & Young Global Limited, Evelyn Partners, Grant Thornton LLP, Haines Watts Group, Johnston Carmichael, KPMG International, Mazars, MHA MacIntyre Hudson, Moore Global, PwC, RSM US LLP, UHY Hacker Young, AZB & Partners, Cyril Amarchand Mangaldas, Dhir & Dhir Associates, and J Sagar Associates.

The market has both large and small players. In terms of value, around 40% of the market is captured by large multinational companies. The industry has witnessed a few notable mergers and acquisitions and some exciting hybrid service offerings.

For instance :

• In August 2022, ICR, one of the leading strategic communications and advisory firms, introduced SPAC Liquidation Communications Services, which offers the necessary support to clients in efficiently communicating with investors during a liquidation.

Fact.MR has provided detailed information about the provider of corporate insolvency service positioned across regions, revenue growth, and service offering expansion, in the recently published report.

Segmentation of Corporate Insolvency Service Industry Research

• By Service Type :

  • Administration
  • Company Voluntary Liquidation
  • Creditors Voluntary Liquidation (CVL)
  • Compulsory Liquidation
  • Others (not classified elsewhere)

• By End-use Industry :

  • Consumer Markets
  • Energy and Natural Resources
  • BFSI
  • Life Science & Healthcare
  • Media & Telecommunications
  • Technology

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africaa