In its first nine months 2024 results, Coface recorded net income of €207.7 million, a 9.5% increase compared to the same period last year, while its revenue was down 2.1%, to €1,376.6 million compared to the €1,417.8 million reported in 9M 2023.
At €1,130.2 million, insurance revenue decreased by 4.0% at constant FX with continued subdued client activity contribution. For 9M 2023 the firm reported €1,187.8 million in insurance revenue.
The decrease in 9M 2024 of insurance revenue was due to a decline in inflation and the absence of a rebound in client activities, against a still fragile economic backdrop.
In Q3 2024, total revenue stabilised at -0.1% with other services up +6.0%, Coface noted, and stated that client retention is still high at 92.7% but down from 2023 records.
Buoyed by an increase in demand and the positive effects of investments for growth, new business rose to €96 million, up €7 million compared to 9M 2023.
Pricing was also down by 1.4%, in line with historical trends, Coface reported.
Net combined ratio in 9M 2024 improved by 1.6 ppts, to 64.4%. This includes a loss ratio of 35.5%, which improved 4.8ppts, and a cost ratio of 28.9%, which increased 3.2ppts.
Coface also reported its net financial income was +€59.8m over the first nine months of the year. This figure includes capital gains of +€11.7m, which more than offset negative market value adjustments on investments of -€3.4m.
It also noted that the FX effect remained negative at -€10.0m and was primarily due to the euro’s rise against most of the group’s other operating currencies.
Xavier Durand, Coface’s Chief Executive Officer, commented: “After several quarters of lower revenues due to lower inflation and a slow economy, especially in Europe, the third quarter turnover stabilized. Despite a moderate decline of -1.3%, credit insurance recorded a positive net production.
“Information services sales recorded another quarter of double-digit growth and have increased +17.2% year-to-date. Debt collection services rose +18.9% from a still low base. These activities, which are structurally profitable, are strategic for Coface and benefit from our continued investments.”
Durand continued: “Our combined ratio remains excellent at 64.4% thanks to sound risk management, and despite a slow and steady rise in the number of losses recorded by Coface in a context of higher business failures.
“The period of high inflation has left its mark on the weakest companies, and a number of cyclical sectors – especially automotive – are continuing to suffer. This deteriorated risk environment is expected to continue, despite the recent rate cuts implemented by central banks.
“Our financial income is improving and has not been affected by negative mark to market movements. Finally, our net income rose by 9% to €207.7m, which translates into a return on average tangible equity of 14.8%, well above our mid-cycle targets.”
