The positive trend that began in the second half of 2009 is confirmed in the first half of 2010, with operating profit of €55m compared to -€47m in the second half of 2009 and -€202m in the first half of 2009. This is explained by the turnaround in Insurance operating profit, driven by the fast improvement in the claims rate, due to the improvement in the economic situation and Coface’s tight management of its risks: compared to December 2007 and before the crisis, the gross insured exposures (which measures the service rendered to clients) increased by 6% to €377 billion, while the risk weighted exposure based on debtors’ ratings (which measures the risks Coface is exposed to) decreased by 26%.
These substantially reduced risks are covered by increased premiums (up 13% over 2007) and shareholders’ equity up 11% (compared to the end of 2007) to €1.311 billion (+21% compared to December 2009). The accounting improvement in the claims rate is based on a prudent claims rate assumption at the end of the 2010 policy writing year of 59%, when the instantaneous claims to premium ratio in the first 6 months of 2010 was 39%. Factoring continues to post excellent performances: growth in revenue (Net Banking Income) has returned to double digits, its pre-crisis level (+14% in S110), the cost of risk is controlled and operating profit is up 85%. Source: Coface Press Release