The financial rating has been developed to meet the increasing need of companies to inspire confidence to multiple stakeholders - e.g. suppliers, customers, strategic partners, bankers and can be either self initiated by a company or initiated by a “stakeholder”.
The rating and how it is compiled
The rating appears in the form of letters (A, BBB, etc...) like those of traditional rating agencies and it associates to these letters the same default risk probabilities.
It is determined by a comprehensive and rigorous 3 stage process, incorporating an internal “6 eyes” rule : throughout the rating process both the tools applied and the people engaged in the process review and analyse the data at different stages i.e. no single person applies the rating.
STAGE 1
Collection of information
A questionnaire is completed by the company on which a rating is solicited. This information is analysed by Coface and compared to internal information gathered from many sources, including those from within Coface’s 4 business lines. This data represents an unequalled source of payment information across all business sectors worldwide.
STAGE 2
Management review
An in-depth review with the rated company’s management and Coface experts ensures that all relevant information is captured in the report which will establish the rating. The rating reflects the depth of Coface experience of rating companies and is founded on a robust statistical approach.
STAGE 3
Validation of the rating
The final stage is for a Credit Insurance underwriter to validate the rating. Coface has 250 specialists in corporate risk underwriting in 30 centres across the world applying uniform standards and using a Common Risk System.
Why Coface’s rating is different
The Corporate Financial rating offers significant advantages in comparison to existing services:
- It is based on Coface’s expertise – on the same database and risk management processes we use to underwrite the risk for our insured clients
- It is transparent – the rated company is informed of progress at each stage of the process
- It offers an extremely reliable statistical rating, tested over many years and across all geographical zones
- The large volume of data taken into consideration drives the rating
- It represents value for money – the breadth and depth of information accessible on companies of all sizes throughout the world and used every day allows us to price the rating very competitively
- It is available to a broader market - to medium and small sized companies, for which the traditional agencies are out of reach, but also to companies in emerging countries
- Impartiality is guaranteed – our experts in production and underwriting work independently from our commercial teams
- It is not biased to financial organizations and is not designed to rate sophisticated products such as finance vehicles nor company processes
Pricing
The price depends on the complexity of the company rated. For a medium sized company, without subsidiaries, a rating would cost around £4,000.
Case Study
AGRI SGJ - View case study
"AGRI SGJ has been with Coface for about 8 years now. I am a strong believer that when you build up a track record with a company like Coface, the mutual trust can be very beneficial to both sides. We as a company have a very seasonal business and for us to be able to call and get a limit in place, sometimes for only 2/3 months means we are able to trade more freely, without the worry of not getting cover. This is just one of the benefits of working with a complete credit management provider."
