Best’s News & Research Service - August 25, 2016 11:35 AM (EDT)
A.M. Best Releases 119 Country Risk Assessment Reports; Moves Brazil Down Tier Scale
- August 25, 2016 11:35 AM (EDT)
Oldwick //BestWire// - A.M. Best has released its 2016 Country Risk Assessment Reports, providing economic, political and financial system risk assessments on 119 countries, including eight new ones and a downward reassessment of Brazil.
A.M. Best defines country risk as the risk that country-specific factors 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.
Country Risk Tiers were assigned to eight new countries: Bangladesh (CRT-5); Bulgaria (CRT-4); Cambodia (CRT-5); Laos (CRT-5); Myanmar (CRT-5); Nepal (CRT-5); Paraguay (CRT-4); and Uruguay (CRT-4). Brazil’s country risk assessment was moved from a CRT-3 to a CRT-4 due to the country’s moderate levels of economic and financial system risk and high levels of political risk, as corruption, continued political uncertainty, lower commodity prices and growing fiscal deficits will all drag on economic growth in the near term.
This update is part of A.M. Best’s annual review of its country risk assignments and is not expected to affect any ratings.
A.M. Best’s country risk evaluation does not impose a ceiling or cap on ratings. Country risk is integrated into the rating of an insurance company alongside other rating factors such as balance sheet strength, operating performance and business profile. Please visit http://www3.ambest.com/ratings/cr/crisk.aspx 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 http://www3.ambest.com/ambv/ratingmethodology/default.aspx .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.