Coface delivers record first semester in riskier economy

Coface delivers record first semester in riskier economy:

Net income up 25% at €78.5m, RoATE^[1] at 9.6% and Partial Internal Model submitted

Turnover reached €733m, up 6.6% at constant FX and perimeter

• All regions positively contributing to growth
• Growth of premiums at 7.1% in Q2-2019, at constant FX and perimeter, continues to be supported by past client activity and high retention

Net loss ratio at 44.0%, up by 0.8 ppt.; net combined ratio at 76.0%

• Gross loss ratio down (1.5) ppts. during the first semester
• Prior year revenues development at historical high levels & reserving policy remains unchanged
• Net cost ratio at 32.0% vs 33.8% in H1-2018, benefiting from good operational leverage

Net income (group share) at €78.5m, of which €42.2m in Q2-2019; annualized RoATE¹ of 9.6%

• One-off positive impact of  €3m, linked to the integration of PKZ (badwill)²

Solvency ratio estimated at 162%³, above the target range of 140% to 160%

• Coface submitted for validation its partial internal model, in line with its objectives
• The objectives of the second pillar of Fit to Win (capital efficiency) have been reinforced

Execution of Fit to Win plan continues

• Arrival of a new management team for Coface Finanz (factoring company in Germany)
• The plan’s objectives are on track to be fully attained

_{Unless otherwise indicated, changes are expressed by comparison with the results as at 30 June 2018
1 RoATE = Average return on equity
2 Badwill is based on preliminary estimates and could vary pending final analysis.
3 The estimated Solvency ratio disclosed is a preliminary calculation based on Coface’s interpretation of Solvency II.
The final calculation may differ from this preliminary calculation. The estimated Solvency ratio is not audited.}

Xavier Durand, Coface’s Chief Executive Officer, commented:

“The first half of 2019 confirms the relevance of our strategic Fit to Win plan. The risk management measures we have put in place are bearing fruit within the context of a decelerating economic environment. We have registered a comparative like for like growth of 6.6%. Commercial activity has seen a return to growth in new business. In the second quarter, during which we recorded the highest net income since we launched the plan, we also successfully integrated PKZ, now known as Coface PKZ.
Finally, today we submitted our partial internal model with the French insurance regulator. This is the result of a major strategic project for numerous teams within Coface. If validated, it will permanently align our regulatory capital requirements with our risk portfolio. It could also mark an important step in our target to improve the capital efficiency of our business model.”

For additional and more detailed information please visit: www.coface.com