Coface’s net combined ratio, a measure of how much is spent on claims and expenses as a percentage of property and casualty premiums, was 82.2 percent at the end of 2011, down from 84.9 percent a year earlier, according to the Paris-based company’s financial reports. A ratio above 100 means an underwriting loss.
“We expect our net combined ratio to remain stable in 2012, it may have an increase of one or two percentage points,” Jean-Marc Pillu, the unit’s chief executive officer, said in an interview in Sao Paulo. “As 2012 is less good than 2011, it’s logical we’ll see a marginal increase of our net ratio.”
Europe’s debt crisis prompted trade-credit insurers to reduce coverage. Euler Hermes SA (ELE), the biggest in the industry, said May 26 it was reviewing coverage of exports to Greece because of the risk the country will exit the euro. Atradius NV, the second-biggest, stopped covering new shipments of goods to Greece on June 1.
Coface has been more cautious on insuring some Spanish industries, including construction, textiles and distribution, Pillu said. The firm has also starting reducing coverage in Portugal, Italy and France, he said.
The company has been “progressively” reducing its position in Greece since the beginning of the second quarter of 2011, according to Pillu. Coface expects Greece’s gross domestic product to fall 6 percent this year and estimates the risk at more than 50 percent that the country will drop the euro, he said.
Coface is doing business in Greece only with big international companies and some of the healthier Greek exporters, according to Pillu.
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