Coface

Coface announces the closing of the acquisition of GIEK Kredittforsikring AS, a company that manages a short-term export credit insurance portfolio.

After a 2019 that was dominated by trade tensions between the United States and China, Coface has observed an incipent recovery in Asia (excluding China), supported by supply chain shifts and additional liquidity from the US Federal Reserve.

Although the second quarter of 2020 is shaping up to be the most challenging period of the year, there are now good reasons to think that the road to recovery will be long and arduous. Despite immediate tax deferrals, liquidity guarantees, it is likely that many firms will find themselves in difficulty.

Many European countries have temporarily amended the legal framework of default procedures to help companies deal with the crisis, postponing growth of insolvencies in Europe.

Our Chief Economist presents an in-depth look at the economic changes around the world and our latest forecast for 2020 and 2021.

Coface forecasts that the recession in 2020 (a 4.4% drop in world GDP) will be stronger than that of 2009. Despite the recovery expected in 2021 (+5.1%) – assuming there is no second wave of the coronavirus pandemic – GDP would remain 2 to 5 points lower in the United States, the eurozone, Japan, and the United Kingdom, when compared to 2019 levels.

In the context of weaker activity in China due to the health crisis, Coface’s latest survey on business payments in China shows a deterioration in payment behaviour in 2019. 66% of surveyed companies reported payment delays. The length of payment delays remained stable at 86 days in 2019. Nevertheless, sectors that have been hit the most by lockdown measures will have to delay payments in order to survive in 2020 and the number of corporate insolvencies should increase.

In the context of Covid-19 crisis, CofaceCanada is pleased to announce their participation in the extended Trade Partnership Insurance (TPI) powered by EDC (Export Development Canada).

Early 2020 marked by a sudden interruption in world trade, hampered by a global recession and soaring uncertainty

During the current, unprecedented health and economic crisis, the Belgian government, in collaboration with credit insurers, is setting up a reinsurance program to sustain the economy during this difficult period.

Within his new role, Guilherme will be responsible for defining, leading, and supervising Coface's commercial strategy for France and the Western Europe region. His mission will be to support business development and growth, and to cultivate Coface's success in these markets.

While the focus has mainly been on China, Europe and the USA so far, the consequences of the Coronavirus pandemic are likely to be even more severe in emerging countries.

Xavier Durand, Coface CEO, commented: “The coronavirus crisis presents an unprecedented shock for our economies and for the credit insurance industry. First and foremost, I am very proud of our teams’ successful efforts to continue supporting our customers despite the containment measures (...)"

Together with the credit insurers, the German government is setting up a protective shield to support the economy in these difficult times.

Communication setting out the arrangements for the supplying of the Universal Registration Document .

Due to the current coronavirus (COVID-19) pandemic and its impact on the global economy, it is unlikely that China will be able to achieve its 2020 growth target. Coface forecasts a growth rate of 4% for the Chinese economy in 2020.

In this unprecedented health and economic context, Coface is working with the French government to relaunch an exceptional complementary public credit insurance scheme.

At first, the COVID-19 epidemic in China only affected a limited number of value chains – but it has since turned into a global pandemic. Its repercussions have created a double shock – supply and demand – that is affecting a large number of industries in all over the world.

COFACE SA’s Board of Directors met on 1st April 2020 to look at the group’s activity in the current economic environment.

The rating agency Fitch has, on 31 March 2020 placed Coface on Rating Watch Negative. This includes Coface’s Insurer Financial Strength (IFS) rating.