Coface profits rise 21% on company refocus

French credit insurer Coface Group increased its after tax profit by 21% during 2011 after refocusing on its core business at the start of last year.

The company made a profit of €121m (£101m) last year as it became completely debt free in 2011.

The insurer also improved its combined ratio by 2.7 points to 82.2% (2010: 84.9%) as a result of good cost control and a stable net loss ratio.

Turnover, meanwhile, was up 7.4% at €1.5bn across all geographical platforms, above the average of 5% recorded for more than five years.

Driving the growth were the emerging markets with Latin America up 11.4%, Asia and Pacific up 12.4% and Central Europe 20.2%.

“Refocusing on our core business and our company project ‘Strong Commitment’ have put coherence and pragmatism back at the centre our organisation,” said Coface chief executive Jean-Marc Pillu.

“We are even more focused on accompanying our clients, providing them with increased exposures despite the difficult economic situation, due to our refined risk expertise.

“Our performance in 2011 proves that Coface has never been more solid to handle future economic challenges.”

Coface spent €49m after tax on restructuring costs with the company’s new governance setting up around seven new geographical platforms.

It also boosted its client retention rate by five points to 91% from 86% in the space of one year.

The insurer set up a refined management for risks, enabling it to support the strong commercial development of its policyholders, with a 15.6% increase in overall exposure in one year - double the rise in premiums.

In a context of pressure on the financial markets linked to the eurozone debt crisis, the investment portfolio produced income of €37 million.

Shareholders’ equity climbed 5.7% to €1.5bn in 2011, accompanied by a reduction in the indebtedness ratio, which moved from 43% at the end of 2009 to 1% at the end of 2011.