Coface releases its 9M-2023 financial results and records excellent income of €189.7m in the nine months amidst slowing inflation and claims normalisation
Turnover of first nine months
€1,418m, up 7.1% at constant fx and perimeter and up 5.3% on a reported basis
- Trade credit insurance rose by +6.6% at constant fx. In q3-23, growth in client activity was negative as a result of falling inflation and economic slowdown, which both weighed on premiums. Commissions were up +10.2%
- Client retention stood at a record high (93.9%); price effect was still negative (-2.0%) but stabilised in q3-23
- Double-digit growth in business information (+14.7% at constant fx) and debt collection, which proved to be less cyclical; factoring up by +3.8%
Net loss ratio
9m-23 net loss ratio at 40.2%, up by 1.3 ppt; net combined ratio at 66.0%, up by 0.3 ppt vs pro forma 9m-22
- Gross loss ratio at 38.8%, up 3.3 ppts in a risk environment now close to historical averages
- Net cost ratio improved by 1.1 ppt at 25.7% reflecting high reinsurance commissions and business mix while we continue to invest
- Net combined ratio for q3-23 at 66.8% improving by 3.0 ppts on better loss ratio
- Risk exposure in israel is limited to €4.6bn. Israel is also a historical market for coface's business information division, representing close to ¼ of total bi with slower growth
Net income (group share) at €189.7m, including €60.9m for q3-23; annualised roate1 at 14.1%
Moody’s upgraded coface’s rating from a2 to a1 with a stable outlook
Coface CEO's statement
Coface continued to deliver solid operating performance in an environment of strong economic recovery, despite the lingering pandemic. The risk environment is continuing to normalize, with very different situations according to country, or sector of activity.
Coface’s results reflect substantial reserve releases tied to low loss experience, a large part of which is paid back to the governments that implemented public reinsurance schemes. These schemes reduced Coface’s pre-tax profit byIn the third quarter, both the global economy and inflation, particularly for commodities, experienced a net slowdown which led our clients’ turnover to contract over the period.
Coface's turnover has nevertheless risen +7.1% year to date at constant FX due to an excellent performance at the start of the year, client retention which remains at record highs and a continued increase in service revenues. Business information revenue in particular was up +14.7%, confirming it is less cyclical.
Coface has a significant historical presence in Israel, particularly in business information. Despite its horrific human cost, the current conflict does not yet appear to have had a major economic impact. While there is a real risk that the conflict will persist or expand, we continue to support our local teams and clients in the region.
In an environment of rising business insolvencies, risk prevention measures from the beginning of the year so far enabled us to limit claims, and our sound cost management let to a net combined ratio of 66.0% for the first nine months of the year.
Over the last quarter, Coface's net income was €61m with a year-to-date annualised RoATE of 14.1%, which is well over our mid-cycle targets.
Lastly, we welcome Moody’s decision to raise Coface's credit rating from A2 to A1, associated with a stable outlook. This recognizes our team's hard work and attests to Coface's agility and resilience, as well as the quality of its risk management, which are at the heart of our culture and expertise.
- Xavier Durand, Coface’s Chief Executive Officer
Unless otherwise indicated, change comparisons refer to the pro forma IFRS 17 results as at 30 September 2022.