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Coface SA: Review of the credit insurance sector by Moody's

The rating agency Moody's confirmed Coface’s Insurance Financial Strength (IFS) A2 rating on 27 March 2020. The outlook for this rating has been changed to negative.

As part of its credit insurance sector review, the agency estimates that the progression of the coronavirus epidemic, and the measures taken by governments to slow its spread, represent a scenario of severe stress for credit insurers.

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Poland Payment Survey: reduced payment delays, but a challenging outlook

Despite the economic slowdown, Coface’s latest survey on business payments in Poland shows that payment delays have systematically shortened since 2017 – but the impact of the coronavirus outbreak on the Polish economy remains to be seen.
Payment terms: transport and construct offer the most generous credit periods
Poland’s GDP growth reached 4.1% in 2019 – a slowdown from the 5.1% recorded in 2018 – and is expected to slow further: Coface anticipates GDP growth in Poland to reach 3.3% in 2020. A relatively favourable macroeconomic environment has created supportive conditions for businesses in previous years. However, the full impact of the COVID-19 coronavirus remains to be observed, notably concerning trade partners. The coronavirus’ knock-on effects could further impact the economic outlook for Poland.

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Coface launches new online product: Cross Border Network

Coface continues its innovative strategy expanding online offerings such as this novel Cross Border Network product. With this service, Coface enables its clients to visualize a company’s and individual’s connections leveraging the largest B2B database in CEE with about 34 million companies.
This easy-to-understand interactive, visual application provides useful background information on companies, their risk level, and sales potential

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Coface capitalizes on its strategic successes and launches Build to Lead, its new 2023 strategic plan

The strategic plan Build to Lead is based on strong beliefs: credit insurance is an attractive service business, with strong barriers to entry and growth potential where Coface has strong capabilities which it will seek to deepen: its skills, scale and agility.
This new plan will broaden and deepen ongoing transformations at Coface to be recognized as a leader in its industry. It includes two types of initiatives to drive the business forward: the first for the core credit insurance business and the second for the specialty businesses that can leverage its capabilities and know-how.

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COFACE SA: Shareholding evolution

COFACE SA (“COFACE”) acknowledges the announcement made by Natixis of its sale of 29.5% of the share capital of COFACE to Arch Capital Group Ltd (“Arch”) as well as Arch’s affirmed support of COFACE’s current management and of its new 2023 strategic plan Build to Lead.

Natixis has stated its intention to resign from COFACE’s Board of Directors after the closing of the transaction. Natixis also specified that its agreement with Arch states that, on this date, COFACE’s Board of Directors will be composed of ten members comprising four members proposed by Arch and six independent directors (including the current five independent directors).

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AM Best assigns A (Excellent) rating to Compagnie française d'assurance pour le commerce extérieur and to Coface Re SA

Rating agency AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) to Compagnie française d'assurance pour le commerce extérieur (la Compagnie) and to Coface Re. Both ratings have a stable outlook.
The agency has also affirmed the FSR of Coface North America Insurance Company (CNAIC) to A (Excellent). The outlook remains stable.

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Coface Romania Study: Insolvencies in Romania decreased by 22% in 2019 compared to previous year, reaching its lowest level over the last decade

The majority of insolvencies were registered in the wholesale and distribution sector followed by the constructions and retail sectors
The most recent Coface Romania study shows that in 2019 there were 6,384 insolvent companies, -22% less compared to the level registered in the previous year. The data also indicate a gradual decrease of insolvent companies with revenues over EUR 0.5 million (medium and large companies). The latter reached 444 companies during 2019, below the average of 550 over the last three years. This evolution was also reflected in the decrease of financial losses of only RON 4.6 billion in 2019, half of the average for the last three years.

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Political and environmental risks are the main threats facing businesses in 2020

As Coface launches the 2020 edition of its Country & Sector Risks Handbook, Chief Economist Julien Marcilly today presents the main threats for the global economy in 2020 at the Coface Country Risk Conference in Paris.
The US-China trade agreement will not be enough to rekindle international trade
With 2019 being marked by a rise in protectionist rhetoric (more than 1,000 measures implemented worldwide) and the first decline of global trade in ten years, Coface anticipates that international trade will grow by only 0.8% in 2020. The truce trade agreement between the United States and China is unlikely to restore corporate confidence or significantly boost industry and world trade, especially as only 23% of the protectionist measures taken between 2017 and 2019 affect the United States or China. The rise in protectionism is therefore a global and lasting trend that to which companies will need to adapt

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Turkey Payment Survey 2019: better picture in payment term but companies remain cautions regarding economic prospects

Right after the recession that the economy went into during the second half of 2018 the private sector remains mixed in terms of the economic outlook.
Payment terms: shorter terms reflect preference for liquidity
The deterioration of cash flow has slowed down and fewer companies expressed tougher conditions while making their payments. Nowadays, the average payment term offered by Turkish companies to their clients stood nearly at 85 days in the domestic market and at 69 days in export markets (vs 108 days in 2017).

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Coface Study: Retail Sale in Non-specialized Stores Sector – positive evolution of revenues in 2018, with an 8% increase compared to previous year

A new study conducted by Coface Romania on the sector of "Retail sale in non-specialised stores with food, beverages or tobacco predominating” (NACE 4711) indicates a positive evolution of revenues in 2018, which increased with approximately 8% compared to 2017, with a slightly lower profitability. The study aggregated the data of 42.051 companies that submitted their financial situation for 2018 (as of September 2019) and generated a consolidated turnover of RON 71.96 billion. The weight of the cumulative market share held by the most important 10 players is 61%, which indicates a medium to high degree of concentration.

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Coface Study: Revenues from the sector of retail with pharmaceutical products in specialized stores increased by 15% in 2018 compared to 2017

A new study conducted by Coface Romania on the sector of "Retail with Pharmaceutical Products in Specialized Stores” (NACE 4773) indicates a positive evolution of revenues in 2018, which increased with approximately 15% compared to 2017, with a slightly higher profitability. The study aggregated the data of 4.425 companies that submitted their financial situation for 2018 (as of September 2019) and generated a consolidated turnover of RON 19.07 billion. The weight of the cumulative market share held by the most important 10 players is 31%, which indicates a low degree of concentration.

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AM Best affirms A (Excellent) rating to Coface North America Insurance Company, with stable outlook

Rating agency AM Best, on 17 December 2019, has affirmed Coface North America Insurance Company’s ‘A’ (Excellent) Insurer Financial Strength (IFS) rating, with a stable outlook.
Coface North America Insurance Company (CNAIC) is a major credit-insurance operating entity of the Coface Group and its main vehicle to access the large North American market.
In its press release, AM Best highlights that this rating reflects “Coface’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management”.

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The global automotive industry and enhanced regulations: a very steep path ahead

Hit by increasingly stringent regulations, particularly for environmental purposes, the global automotive industry is facing a downturn and is being forced to reinvent itself.
In a gloomy global economic context, the automotive sector faces several very specific challenges, including stronger and stricter environmental regulations. As a result, car sales are experiencing negative growth not seen since the Great Recession of 2008 and there is an uncertainty prevail in the sector.

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Business failures in France are less frequent, but of a larger size.

While the number of companies facing corporate insolvency has decreased since the beginning of the year, their cost has increased, both financially and in terms of the number of jobs affected.
After a difficult first quarter, marked by the repercussions of the “yellow vests” movement, the number of corporate insolvencies since the beginning of the year in France is set to decline for the fourth consecutive year. However, Coface expects a slight rebound in insolvencies in 2020 (+0.9%), mainly due to the expected slowdown in the construction sector, which was largely driven by public works in 2019 in the run-up to the municipal elections.

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Broker Portal, Coface’s new digital interface for its brokers

Coface launches its new portal for brokers, offering a new experience to its partners in the development of their business around the world.
Available in 42 of the countries covered by the Coface group, the Broker Portal is a digital platform for Coface’s brokers. Modern and intuitive, the portal allows brokers to optimize the management of their activity. The tool portal was developed by Coface, whose ambition was to provide brokers with a high level of service and optimal satisfaction.

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Coface Study: Dairy and Cheese Manufacturing Sector-negative revenue evolution in 2018, with a 5% decrease compared to 2017

A new study by Coface Romania on the sector of "Dairy products and cheese manufacturing" indicates a negative evolution of revenues in 2018, which decreased with approximately 5% compared to 2017, with a slightly increased profitability. The study aggregated the data of 448 companies that submitted their financial situation for 2018 and generated a consolidated turnover of RON 3.8 billion. The weight of the cumulative market share held by the most important 10 players is 58%, which indicates a high degree of concentration.

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Meat Processing and Preservation Sector: negative evolution of revenues in 2018, with 19% decrease compared to previous year

A new study by Coface Romania on the Meat Processing and Preservation Sector indicates a negative evolution of revenues for 2018, with a decrease of approx. 19% compared to the previous year. Thus, the African swine fever (ASF) lead to cuts of over RON 1 billion in the turnover of these companies, the consolidated revenues at sectoral level decreasing from RON 6.13 billion (2017) to only RON 4.96 billion (2018), the minimum in the last 5 years. According to NSVFSA (National Sanitary Veterinary and Food Safety Authority), almost 1.000 outbreaks of African swine fever are registered in Romania, just two months before Christmas. The Coface study aggregated the data of 507 companies that submitted their financial statements for the year 2018 and generated a consolidated turnover of RON 4.96 billion.

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2019 survey on company payments in Germany: turn of the tide

85% of companies report longer payment terms in 2019 vs 2017
According to Coface's 2019 Germany payment survey of 442 companies, the country is in a phase of change. The pressure on companies from international competition is increasing. This is one of the reasons why the pressure on their cash flow continues to increase. On average, German companies saw their payment terms increase from 29.8 days in 2017 to 35.9 days in 2019.
Even if credit risks are insured, companies' confidence in their customers has declined. Short- and medium-term credit periods still dominate the market. 87% of companies request that payments be made within 60 days – a very short time in terms of international comparison. Clients missing payment deadlines now affects 85% of German companies, compared to 78% two years ago.

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Agri-food sector outlook: in a global economy marked by protectionist tensions, what does the future hold?

Central to the current trade tensions, notably between the USA and China, the global agri-food sector is impacted by knock on effects, notably via downward trends on the prices of key agri-food commodities, such as soybean. Coface has conducted an in-depth analysis of future trends in this market.
A particularly strategic sector, agri-food (along with ICT) is one of the sectors key to the current trade war between the United States and China. Recently, Chinese authorities have taken steps to ban all agri-food imports from the United States, in response to the tariff increases announced by the Trump administration

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Coface Barometer: general slowdown in the global economy despite central banks’ actions

With business morale being affected by a summer marked by a multiplication of areas of political uncertainty around the world, it seems likely that 2020 will be a year of economic decline.
The Argentine currency crisis, major demonstrations in Hong Kong and Russia, Brexit, the attack on oil installations in Saudi Arabia – these are just some of the many events that marked the third quarter of 2019. Increasing political uncertainty, combined with the decline in the volume of world trade, the high volatility of oil prices, and the decline in automobile sales in Europe and China, has continued to affect corporate morale.

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