129 Country Risk Assessment Reports Released by A.M. Best

Country Risk Assessment Reports providing economic, political, and financial system risk assessments on 129 countries, including 7 new reports on Albania, Ethiopia, Hungary, Ivory Coast, (FYR) Macedonia, Sierra Leone, and Tanzania, were released by A.M. Best. In addition, A.M. Best changed the tiers of five countries: 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. According to A.M. Best, it evaluates and factors country risk into all of its 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. A.M. Best places countries 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 A.M. Best says pose the most risk and, therefore, the greatest challenge to an insurer's financial stability, strength, and performance.

A.M. Best has assigned a Country Risk Tier of CRT-3 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, according to A.M. Best, and a moderate level of political risk. A Country Risk Tier of CRT-5 has been assigned to Ethiopia, Ivory Coast, Sierra Leone, and Tanzania, reflecting A.M. Best's assessment of 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, according to A.M. Best. Jamaica's country risk assessment was also improved to a CRT-4 from a CRT-5. In contrast, A.M. Best moved Oman's country risk assessment 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.

A.M. Best incorporates country risk 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). The complete listing of Country Risk Tiers and country-specific reports is available at A.M. Best's "Country Risk Information" center.

More information about A.M. Best's country risk methodology, "Evaluating Country Risk," is available in the methodology section of A.M. Best's website.

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