Desperate companies defaulting on loans and fearing collapse have boosted credit insurer Coface's return on insurance premiums, according to chief executive Francois David.
Announcing its 2001 results, the company said insurance premiums represented £667m, 72% of consolidated turnover, up 9% from the previous year.
David said: "In the last semester, as the global recession has worsened, the demand for credit insurance has increased. It is satisfying and worrying at the same time.
"We have been approached by our traditional clients for more cover and by new clients, who are fragile and suddenly panic and look for insurance.
"We have turned away the bad guys, such as the telecommunications sector, who may have secure clients but are not secure themselves."
He said the company had toughened its selection criteria and its acceptance rate fell from 71% to 60% last year, and the rate of cancellation of doubtful risks has accelerated from 4.5% to 8.2%.
Group consolidated turnover rose to £925.6m in 2001 from £845.8m the previous year, a 9.4% increase. The first half growth of 15% contrasted with a second half slowdown, up only 4%. Consolidated net profit for the year, however, declined 16% to £48.3m.
"This decline was for two reasons," said David. "First, the global recession has meant our claims have increased because of the rise of companies defaulting. Second, our revenues have been hit by the lower returns on stocks globally," he said.
Emerging markets for the group such as the UK, Italy and Spain did well during 2001, growing 26%, generating sales of £273m.
David said the group's exposure to the economic crisis in Argentina was "slight, roughly 1%". The group's main exposure, around 80%, was with the US, continental Europe and Japan
