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The insurance industry has evolved over the past two centuries to the benefit of the global economy in general and policyholder security in particular. History has proven that value is protected appropriately when risks are identified accurately and provided for adequately. Though the concept is simple, its execution is difficult; particularly on a national-or more challenging-international scale. Governments struggle to balance policyholder protection with the profitability and growth of insurance carriers.
However, each national insurance market’s unique size, competition, product mix and structure are functions of that host country’s political and macroeconomic environment. These in turn reflect the history and evolution of its society and culture. Countries with long histories of economic innovation and growth, supported by well-developed financial services, are at the center of today’s global insurance market. Each country’s unique characteristics that result from this foundation can pose challenges or opportunities to a domestic insurer.
An insurance company is highly impacted by its operating environment. A.M. Best Co. recognizes and accounts for this in its ratings process and communicates it, in part, through the evaluation of country risk. This report outlines some key traits and their effect on the progression of countries’ insurance sectors, individually and in a global context.
Insurers vary among countries in the availability of high quality assets, the types of products they may write, the types of competition they face and the kinds of government restrictions they encounter.
Individual countries’ insurance markets develop based on history, culture and countless other country specific factors. However, there is a clear link between the evolution of a country’s economic, political and financial systems and the maturation of its insurance industry.
A stable insurance industry is built on political security and transparency, economic prosperity and a stable financial system.
To download a PDF copy of this special report at no cost and to access data, analytical methodologies and news, please visit http://www3.ambest.com/bestweek/bestweekreports.asp?rt=ir. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.