Coface reports a positive net income of €11.3m for the second quarter 2020 and continues to implement its strategic plan
Turnover for the first semester: €725m, down 0.6% at constant FX and perimeter
- Client retention and new business achieve record levels, with a positive net production of €33m
- First effects of re-pricing are now visible (+0.2%)
- Revenues from services progress by 7%, including information services up by 13%
- Client activities continue to slowdown – a trend expected to continue over the following quarters
Net loss ratio of 57.4%, up by 13.4 ppts; net combined ratio of 88.6% (91.4% for Q2-2020)
- Gross loss ratio increased by 18.1 ppts, mainly driven by higher provisions for an anticipated rise in claim frequencies
- Net loss ratio only increased by 13.4 ppts, as government schemes come into play
- Net cost ratio down by 0.8 ppt to 31.2%, reflecting strict cost discipline and growing service revenues
Net income (group share) of €24.0m, of which €11.3m for Q2-2020; annualised RoATE1 of 2.8%
Estimated Solvency ratio at 191%2, and 183%2 excluding government schemes, above the target range (155% - 175%)
Coface proves its agility and resilience within a very challenging economic environment
Strengthened by its new corporate culture and a solid balance sheet, Coface is confidently continuing with the execution of its Build to Lead strategic plan
Xavier Durand, Coface’s Chief Executive Officer, commented:
“Over the first six months of the year, Coface’s teams have achieved very high levels of performance and engagement, despite the unusual and difficult operational and economic conditions. Our client retention and new business hit record high levels, resulting in a positive net production. We are also seeing the initial effects of our portfolio re-pricing efforts.
On the risk side, we have consistently pursued preventive measures while ensuring that we exercise good judgment in our underwriting decisions. Many governments have recognized the important role that credit insurance plays in maintaining business-to-business credit. Coface has already finalised 11 government agreements and is continuing further discussions with other countries.
During the second quarter, we generated a positive net income of €11.3 million. Our solvency reached 183%, excluding government schemes. Coface is therefore well equipped to face an economic environment that will continue to be governed by evolving health developments. Strengthened by its culture, its resilience, and a solid balance sheet that is further reinforced by government schemes, Coface is continuing to execute its strategic plan with confidence.”
Unless otherwise indicated, changes are expressed by comparison with the results as at 30 June 2019
1 RoATE = Average return on equity I
2 This estimated solvency ratio disclosed is a preliminary calculation made according to Coface’s interpretation of Solvency II regulations and using the Partial Internal Model. The final calculation may differ from this preliminary calculation. The estimated Solvency ratio is not audited.
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