Company insolvencies are forecast to rise sharply this year as the financial crisis hits businesses, according to insurer Euler Hermes.

It forecasts that insolvencies will rise to 13,492 in 2008, an 8.3% increase on 2007, the highest annual rate since 2003.

Fabrice Desnos, chief executive of Euler Hermes, says: “The expected slowing of the economy next year and the rising cost of finance is a big factor, but we are also seeing an increase in late payments by companies, which is an early sign of insolvencies to come.”