AM Best Moves Russia to Bottom Country Risk Tier in Invasion Fallout

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has moved its Country Risk Tier for Russia to a CRT-5 from a CRT-4 to reflect the significantly heightened geopolitical, economic and financial system risk in the country.

Sanctions against Russia have targeted the financial system, resulting in a deeply challenging and unpredictable operating environment for insurers. Volatility in capital and currency markets has increased liquidity risks. Additionally, capital controls and the impact from sanctions will negatively affect cross-border payments.

AM Best determines country risk levels by assessing country specific factors that could adversely affect an insurer’s ability to meet its financial obligations. Country risk is evaluated and factored into all AM Best ratings. As part of evaluating country risk, AM Best identifies the various factors within a country that may directly or indirectly affect an insurance company. Countries are place 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.

The Country Risk Tier of CRT-5 for Russia reflects very high levels of economic, political and financial system risk.

Country risk is incorporated into the analysis of balance sheet strength, operating performance, and the business profile for all rating units. Analysis is done of each rating unit’s country of domicile as well as country of operation (e.g., regulation, asset, and insurance exposure).

For more information about AM Best’s country risk methodology, “Evaluating Country Risk,” please visit the methodology section of AM Best’s website. Individual reports also can be found on AM Best’s Country Risk Information site.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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