Moody’s upgrades Coface’s credit rating to A1 IFSR with stable outlook

Leading credit rating agency Moody’s has upgraded the Insurance Financial Strength Rating (IFSR) of Coface, a prominent player in the credit insurance industry, from A2 to A1.

Additionally, Moody’s has revised the outlook for Coface to ‘stable’ from ‘positive.’ These changes signify a vote of confidence in Coface’s financial stability and its ability to weather economic challenges.

Moody’s attributed this remarkable rating upgrade to several key factors. Notably, it highlighted the remarkable diversification of Coface and its enhanced management of credit risk exposures.

Moody’s expects that these improvements will lead to lower volatility in profits, making the insurer better prepared to navigate economic downturns.

Furthermore, the upgrade acknowledges Coface’s sustained high level of capitalisation since 2020 and its commitment to enhancing asset quality.

Coface has demonstrated exceptional profitability over the past five years, boasting an average combined ratio of 71% between 2018 and 2022, which is a testament to the company’s financial stability.

Since 2016, Coface has taken proactive measures to improve its risk monitoring processes and adjust its risk portfolio accordingly.

Moody’s anticipates that while some level of earnings volatility may persist in the credit insurance industry, it is likely to remain moderate for Coface.

The stable outlook set by Moody’s reflects the agency’s expectation that Coface will maintain a Solvency II ratio exceeding 180% and a leverage ratio below 30%.

Moody’s also anticipates that Coface will not significantly increase its underwriting or asset risk appetite.

Phalla Gervais, Chief Finance & Risk Officer at Coface, expressed the company’s satisfaction with the upgrade, stating, “We are very pleased with the upgrade from Moody’s to A1. This rewards Coface teams’ work and recognizes the high level of service offered to our clients. It also recognizes Coface’s agility and resilience, as well as the quality of its risk management, which are at the heart of our culture and expertise. Coface is on track to deliver its Build to Lead strategic plan and is actively preparing the next chapter that will be presented on 5th March 2024.”

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