AM Best Upgrades Issuer Credit Ratings of
AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICRs) to 'a+' (Excellent) from 'a' (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of Compagnie francaise d'assurance pour le commerce exterieur (la Compagnie) (
The ratings reflect Coface's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management. The ratings of la Compagnie and CNAIC consider their strategic importance to the Coface group as key operating entities.
The rating upgrade of the Long-Term ICRs reflects the improvement in Coface's operating performance to a level considered supportive of AM Best's strong assessment. The group achieved strong results in 2022 and 2023, reporting net income of
Coface's balance sheet strength assessment is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). AM Best expects the group's risk-adjusted capitalisation to remain at the strongest level prospectively, supported by good internal capital generation. Offsetting factors include significant operating leverage, driven by the group's factoring business, and a high dependence on reinsurance, although the associated risks are moderated by the group's well-diversified, high credit quality reinsurance panel.
Coface's favourable business profile assessment is underpinned by its leading position in the global credit insurance market, which is characterised by high barriers to entry. The group has made consistent investments in its pricing tools and data management capabilities, allowing it to maintain its competitive advantage. Although the group is largely a mono-line insurer, its exposures are well-diversified by geography and industry. Fee-based services and factoring businesses in
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