Global Credit Rating Company affirms Coface South Africa’s rating of AA+ with an outlook of stable.

Global Credit Ratings Company (GCR) has affirmed a claims paying ability rating of AA+ for credit insurer Coface South Africa with a stable outlook. 

Coface South Africa is a wholly owned subsidiary of Compagnie Francaise d’Assurance pour le commerce Exterieur, the third largest insurer in the inter-national market for receivables management and trade credit insurance. 

The ultimate shareholder is Natixis, a leading French corporate and investment banking entity with a market capitalisation totalling €10,6-billion.

GCR says the credit rating is based on a number of key factors:

•Coface South Africa’s experience in the South African market for more than 20 years.

•The guarantee provided to Coface South Africa by Cofinpar, a 100%-owned group subsidiary, as well as a letter of continuing support from the ultimate parent company, which provides significant rating support.

•The high degree of reinsurance support from the Coface Group which provides Coface South Africa with access to business from key multi-national clients, technical expertise and operational platforms.

•The underwriting criteria applied has ensured profitability on a gross and net basis over the review period, which is expected to continue go-ing forward.

“The insurer’s investment portfolio remains highly conservative which under-pins the sound liquidity levels,” says GCR.

GCR says that an upward movement on the rating or outlook could develop given demonstrated and meaningful market penetration over the long term, whilst maintaining current profitability and credit protection measures at similar levels.

NATIONAL SCALE RATINGS HISTORY

Initial rating (Aug/2006)

Claims paying ability: AAA(SA)

Outlook: Stable

Last rating (Aug/2012)

Claims paying ability: AA+(SA)

Outlook: Stable

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

GCR’s Criteria for Rating Short Term Insurance and Reinsurance Companies

The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.

Coface South Africa Insurance Company Limited participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.

The credit rating/s has been disclosed to Coface South Africa Insurance Company Limited with no contestation of the rating.

The information received from Coface South Africa Insurance Company Limited and other reliable third parties to accord the credit rating included the 2012 audited annual financial statements (plus four years of comparative numbers), latest internal and/or external report to management, full year detailed budgeted financial statements, unaudited year to date man-agement accounts, the current year reinsurance cover notes and stop loss treaty, implicit letter of comfort, explicit guarantee, buyer exposures and limits.

Issued by: Sha-Izwe/CharlesSmithAssoc

ON BEHALF OF:Coface

About Coface

The Coface Group, a worldwide leader in credit insurance, offers companies around the globe solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export. In 2011, the Group posted a consolidated turnover of €1.6 billion. 4,600 staff in 66 countries provide a local service worldwide. Each quarter, Coface publishes its assessments of country risk for 157 countries, based on its unique knowledge of companies’ payment behaviour and on the expertise of its 350 underwriters. 

In France, Coface manages export public guarantees on behalf of the French state. Coface is a subsidiary of Natixis whose Core Tier 1 ratio is 10.2% end December 2011. In South Africa, Coface provides credit protection to clients. Coface South Africa is rated AA+ by Global ratings. www.cofaceza.com