MEXICO CITY--(BUSINESS WIRE)--AM Best has revised its market segment outlook on Bolivia’s insurance industry to negative from stable, owing mainly to the COVID-19 pandemic, which has exacerbated the country’s political turmoil and contributed to the overall slowdown in economic activity.
In a Best’s Market Segment Report, AM Best states that COVID-19, in combination with the vulnerable economic environment and the political uncertainty in Bolivia, will dampen growth targets and the stability of insurers’ balance sheets. Along with a decline in economic activity toward the end of 2019, Bolivia experienced a complicated presidential election in October, followed by civil protests and the eventual forced resignation of Evo Morales. These events are triggering volatility and further pressuring the country’s micro and macro fundamentals, worsened by widening fiscal deficits and declining hydrocarbon revenues.
Combined ratios among non-life insurers have traditionally been high, and the eventual impact of COVID-19 on the number and amounts of claims is unknown. Although solvency ratios are healthy, interest rate pressures, volatility in capital markets, the pandemic and the ongoing decline in financial products could further strain companies’ operating performance, as well as capital requirements.
To access the full copy of the Bolivia market segment report in English and Spanish, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=296247.
To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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