Noting a higher than expected increase in claims in emerging countries, Coface continues to adapt its risk management policy and foresees a net [...]
The Board of Directors of Coface SA met on 4 July 2016 and examined non-audited preliminary financial information.
This information shows a net loss ratio of the order of 67% for the second quarter of 2016, reflecting:
- the development of claims in emerging countries at a higher level than expected, affecting the level of claims of exporting companies located in mature markets;
- an increased average cost of claim combined with longer collection times in these emerging regions.
Coface has decided to take into account this situation in its risk management and accounting reserving policies and foresees a net loss ratio of 63% to 66% for the full year compared with 52.5% in 2015.
Xavier Durand, CEO of Coface, said:
“We are faced with a greater than anticipated increase of risk in emerging countries. In this context, the Group has already taken strong measures to adjust its risk management policies in these regions and continues to strengthen its teams accordingly. This observation coincides with the work currently underway on the strategic plan which will aim to adapt the Group’s growth strategy and cost structure to this more difficult environment. As already announced, the main themes of the plan will be communicated at the end of July. ”
Financial statements for the first half of 2016 will be published on 27 July 2016.
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