Coface reported net profit of €155 million for the first nine months of 2026, with the third quarter contributing approximately €48 million. Revenue increased 1.7% at constant exchange rates and perimeter over the nine-month period, while third-quarter growth accelerated to 5.4%. Insurance revenue rose 2.5% in Q3 on the same basis.
The credit insurer maintained strong underwriting performance. Its loss ratio for the first nine months was 37.7%, nearly two percentage points lower than a year earlier, while the net combined ratio reached 72.4%. Although this was slightly above the 71.9% recorded a year earlier, it remained well below Coface’s 78% through-the-cycle target.
Profitability also improved compared with the first half of the year. Operating income declined 7% year over year, versus a 9% fall at the end of the second quarter. Net income was down 11.8%, a smaller decline than the 30% drop reported at the end of Q2. Return on average tangible equity stood at 10.7%, compared with 11.4% a year earlier.
Management said new business production reached a record level for the year to date and accelerated further during the third quarter. Client retention was described as close to record highs, while pricing remained negative but improved compared with prior years.
Growth was supported by Coface’s non-insurance activities. Business Information revenue increased by more than 11% organically and by more than 15% including the Cedar Rose acquisition. Debt Collection grew 28%, while factoring revenue rose 7.3% year to date and more than 14% in the third quarter. Management said the company’s broader mix of service and fee-based revenue is reducing its reliance on pure insurance underwriting.
The company’s investment in distribution, data, technology and artificial intelligence continued to weigh on expenses. The net cost ratio increased to 36.8%, from 35.4% a year earlier. Management said it intends to maintain the pace of investment under its “Power the Core” strategy, arguing that these initiatives are important for underwriting, scoring and the expansion of service offerings.
Coface described the macroeconomic environment as increasingly uncertain. Management said corporate solvency remains under pressure from higher interest rates and commodity prices, while insolvencies are at record levels. The company is also seeing a flow of larger claims involving bigger companies rather than only smaller borrowers.
Regional conditions remained uneven. Western Europe, including France, was subdued and slightly negative, while Northern Europe, including Germany, performed better. Management highlighted stronger demand for factoring in Germany as liquidity conditions in European markets tighten. Asia was described as a significant growth opportunity despite quarterly volatility.
The company said its reinsurance structure should remain broadly stable, with only tactical adjustments expected. Management also indicated that the softer reinsurance market could support favorable renewal conditions. It explained that higher interest rates can reduce own funds through mark-to-market losses on fixed-income assets, even when liabilities are also discounted.
Coface did not provide formal full-year 2026 guidance. Management expects new business production to reach an all-time high for the year and said hiring and training under the company’s strategy would continue. New employees typically require about three years to become fully productive, according to the company.
Coface shares were last quoted at $15.73, up 0.83% from the previous close of $15.60. The stock remained within its 52-week range of $14.02 to $17.62. The modest market move suggested a constructive but measured response to results that showed resilient underwriting, improving growth and continued exposure to a challenging credit environment.
Sources: Investing.com News.