Risk analyses and evaluations
Evaluate the risk of businesses defaulting and the overall quality of the business environment.
Our risk analysis is based on:
- our macroeconomic expertise in assessing country risk,
- our contextual business expertise,
- our microeconomic expertise built up over 60 years of payment experience.
Coface offers you analyses and evaluations enabling you on the one hand to assess the risk of a country’s businesses defaulting, and on the other to evaluate the overall quality of the business environment in the country to which you wish to export goods or services.
Country risk analysis
Thanks to Coface’s country risk expertise, 160 country evaluations, drawn up on the basis of macroeconomic, financial and political data, are made freely available.
Regularly updated, they provide an estimate of the average credit risk on a country’s businesses. This is an invaluable tool, giving an indication of a country’s potential influence on businesses’ financial commitments.
Of course, there may be some very solid businesses in high-risk countries, just as there may be some risky ones in reliable countries. The overall risk is thus a combination of business-specific factors and factors relating to the country in which the business operates. Our analyses use a seven-level ranking. In ascending order of risk, these are: A1, A2, A3, A4, B, C and D.
Evaluation of the business environment
Evaluating the business environment involves measuring the quality of a country’s private sector governance – in other words businesses’ financial transparency and the effectiveness of the courts in settling debts.
At Coface we do this on the basis of:
- in-house consultation involving all our establishments worldwide
- business climate evaluations produced by international organisations
With a view to assessing these environments, the majority of evaluations focus on countries’ liquidity and overall solvency. Coface goes further, basing its risk assessment on its microeconomic experience.
In our view, the most important thing is to know:
- whether a company's accounts properly reflect the reality of their financial situation;
- whether in case of unpaid debts the local judicial system will provide equitable and effective settlement.
This assessment relies on Coface’s worldwide network and the expertise deriving from its experience in underwriting risks, investigating companies and managing receivables. Our business environment evaluations use a seven-level ranking. In ascending order of risk these are: A1, A2, A3, A4, B, C and D.
Coface’s economic research
Our activity as credit insurer with a worldwide presence gives us an excellent overall view of businesses and their payment records.
Our economic research is thus based on historical experience of the risks we cover, and also serves to evaluate these same risks:
- macroeconomic analysis and monitoring of political, banking and financial risks are integrated in the day-to-day running of our business.
- microeconomic signals in the form of payment arrears recorded enable us to fine-tune our diagnostics on the economies and sectors concerned, and our forecasts and country evaluations.