Skip to main content

A.M. Best Briefing: A.M. Best Issues FAQ on Financial Strength Ratings, Sovereign Credit Risk and Country Risk

Sovereign credit risk has increased significantly in recent years as countries that garner much of their fiscal revenue from commodity exports have had to draw down sovereign wealth funds, leading to higher sovereign credit risk. Although A.M. Best does not issue ratings on government debt, it considers such risks through its country risk analysis, which is factored into all of A.M. Best’s Financial Strength Ratings. A new Best’s Briefing addresses frequently asked questions about its handling of sovereign credit risk and seeks to clarify how these issues are incorporated into the ratings process.

The briefing, titled, “Financial Strength Ratings, Sovereign Credit Risk, and Country Risk FAQ,” notes that A.M. Best’s country risk analysis encompasses the broader operating environment focusing on the economic, political and financial system risks in each country. The effect of country risk is determined on a case-by-case basis for each insurer and is based on its risk profile and the insurer’s ability to address, manage, and mitigate its exposures to country risk.

Some of the issues the briefing also addresses include:

  • An explanation of A.M. Best’s Country Risk Tiers and the key metrics used in this analysis;
  • The considerations made when gauging the impact of Country Risk on a company’s ratings assessment;
  • An understanding of how A.M. Best factors sovereign credit risk into its rating process.

To access a complimentary copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=246943.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts:

A.M. Best Company
Meg Mulry, 908-439-2200, ext. 5446
Senior Economist
meg.mulry@ambest.com
or
Mahesh Mistry, +(44) 20 7397-0325
Director, Analytics
mahesh.mistry@ambest.com
or
Edem Kuenyehia, +(44) 20 7397 0280
Associate Director, Market Development &
Communications
edem.kuenyehia@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.