Coface warns corporate defaults remain at record highs as factoring grows 7.3%

Trade credit insurer Coface has warned that corporate defaults remain at record levels, prompting it to step up preventive risk measures, even as its factoring business recorded a 7.3 per cent increase in revenue during the first nine months of 2026.

The French group said high energy costs, rising borrowing rates and economic uncertainty were placing pressure on vulnerable companies, resulting in larger credit insurance claims.

Chief executive Xavier Durand said Coface expected corporate defaults to continue rising and had significantly increased preventive measures to manage its exposure.

The warning is particularly relevant to exporters, receivables financiers and companies relying on trade credit insurance to protect against customer non-payment.

Coface’s latest results nevertheless showed resilience across its underwriting and specialist financial services businesses.

Group revenue reached €1.41bn during January to September, an increase of 1.7 per cent on a constant-currency and perimeter basis. Net income was €155.5m, including €47.7m earned in the third quarter.

Revenue from factoring, business information and debt collection rose 10 per cent on the same adjusted basis to €134.9m.

Factoring revenue increased 7.3 per cent, with Germany delivering growth of 10.9 per cent amid strong demand. Activity in Poland remained affected by weaker volumes.

The group’s debt collection operations recorded growth of 28.1 per cent, while business information revenue rose 11.2 per cent at constant exchange rates, including non-consolidated subsidiaries.

The contrasting trends illustrate the financing consequences of a more difficult corporate credit environment. Companies may require greater liquidity support and more detailed counterparty information at precisely the time insurers are becoming more cautious about debtor risk.

A reduction in an insurer’s willingness to cover particular buyers can also affect the availability or economics of receivables finance where funding depends on insured payment obligations.

Despite the deterioration in the wider credit environment, Coface reported a net loss ratio of 37.7 per cent, an improvement of 1.9 percentage points from a year earlier. Its net combined ratio was 72.4 per cent.

Those figures indicate that the group has so far maintained underwriting discipline, rather than demonstrating any easing of the pressure facing insured businesses.

The combination of growing factoring demand and persistent corporate defaults points to a market in which access to working capital increasingly depends on the quality and insurability of the underlying receivables.