A.M. Best has released its 2018 Country Risk Assessment Reports, providing economic, political and financial system risk assessments on 129 countries, including seven new reports on Albania, Ethiopia, Hungary, the Ivory Coast, (FYR) Macedonia, Sierra Leone and Tanzania. In addition, five countries changed tiers; four improved and one moved downward.
A.M. Best determines country risk levels by assessing country-specific factors that could adversely affect an insurer's ability to meet its financial obligations. Country risk is evaluated and factored into all A.M. Best ratings. As part of evaluating country risk, A.M. Best identifies the various factors within a country that may directly or indirectly affect an insurance company. Countries are placed into one of five tiers, ranging from "CRT-1" (Country Risk Tier 1) denoting a stable environment with the least amount of risk to "CRT-5" (Country Risk Tier 5) for countries that pose the most risk, and therefore, the greatest challenge to an insurer's financial stability, strength and performance.
A Country Risk Tier of CRT-3 has been assigned to Hungary, reflecting its moderate levels of economic, political and financial system risk. A Country Risk Tier of CRT-4 has been assigned to Albania and (FYR) Macedonia, reflecting their high level of economic and financial system risk and a moderate level of political risk.
A Country Risk Tier of CRT-5 has been assigned to Ethiopia, the Ivory Coast, Sierra Leone and Tanzania, reflecting high to very high levels of economic, political and financial system risk. In addition, the country risk assessments of Mauritius, Peru and Romania were moved to a CRT-3 from a CRT-4 due to improved economic, political and financial system risk. Jamaica's country risk assessment was also improved to a CRT-4 from a CRT-5. In contrast, Oman's country risk assessment moved to a CRT-4 from a CRT-3, largely due to increased economic and financial system risks.
This update is part of A.M. Best's annual review of its country risk assignments.
Country risk is incorporated into the analysis of balance sheet strength, operating performance, and the business profile for all rating units. Analysis is done on each rating unit's country of domicile as well as country of operations (regulation, asset, and insurance exposure). Please visit A.M. Best's Country Risk center for the complete listing of Country Risk Tiers and country-specific reports.
For more information about A.M. Best's country risk methodology, "Evaluating Country Risk," please visit the methodology section of A.M. Best's website.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information
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