This article presents S&P Global Ratings' insurance industry and country risk assessments (IICRAs) for 97 insurance sectors covering 48 countries and four global sectors (see tables 1-5). We review these IICRAs by applying our criteria "Insurers Rating Methodology," published July 1, 2019.
Latest Actions
Since our last publication ("Insurance Industry And Country Risk Assessment Update: April 2023," published Apr. 26, 2023), we have:
- Revised our country risk assessment on the Italy's life and P/C sectors to intermediate from moderately high. This primarily reflects our view that the country's non-sovereign entities are now exposed to lower financial system risks. See "Country Risk Assessments Update: June 2023," published June 6, 2023. The IICRA scores for Italy's Life and P/C sectors remain unchanged, however.
- Revised our country risk assessment on the Uruguay's life sector to intermediate from moderately high. This follows our publication "Country Risk Assessments Update: April 2023," published April 28, 2023. However, the overall IICRA remains moderately high risk. Despite the life insurance sector's historically satisfactory profitability, some existing characteristics could bring additional volatility during stress scenarios. Indeed, the Uruguay's life sector has a very small absolute size, very low insurance penetration (0.35% of GDP), and high exposure to foreign exchange movements, reflecting companies' long position in U.S. dollars. This compares unfavorably to its regional peers.
In this report, we also publish our assessment of the country and industry risks to which insurers are exposed.
About Insurance Industry And Country Risk Assessments
An insurer's business risk profile forms one of the key components of our rating analysis. It measures the risk inherent in the insurer's operations, which affects the sustainable return that may be derived from those operations. The business risk profile is based on our analysis of an insurer's competitive position, modified to incorporate the industry and country risks to which a specific insurer is exposed.
Each IICRA addresses the risks typically faced by all the insurers that operate in a specific industry and country. To determine the IICRA, we apply our "Country Risk Assessment Methodology And Assumptions," published Nov. 19, 2013, to assess country risk, and then modify it according to our view of industry risk. We assess country risk on a scale from strongest (very low risk) to weakest (very high risk).
We assess industry risk on a four-point scale from low to high. Our analysis of industry risk addresses the level, volatility, and sustainability of profitability in a given industry sector. The primary factor in our industry risk analysis is an assessment of prospective profitability, supplemented by a holistic analysis of factors that, in combination, are likely to either support or threaten industry profitability prospects, such as barriers to entry, market growth prospects, product risk, and the institutional framework.
The impact of IICRAs on our ratings varies according to the degree of risk. The higher the risk, the greater the adverse impact on the business risk profile. The risks are categorized as 1-very low, 2-low, 3-intermediate, 4-moderately high, 5-high, or 6-very high.
Within each country, if applicable, we separately assess the life and P/C sectors. Where it has a distinct legal and regulatory framework, we also assess the health sector separately. In addition, in certain countries, we assess the insurance industry and country risk for the bond, mortgage, and title insurance sectors.
Some sectors are more naturally global, because insurers in those sectors typically write business in multiple countries around the world. Consequently, we assess IICRAs globally for life reinsurance, P/C reinsurance, trade credit insurance, and marine protection and indemnity insurance.
Table 1
| Property/Casualty Insurance Industry And Country Risk Assessments On July 27, 2023 | |||
|---|---|---|---|
| Country risk | Industry risk | IICRA | |
| Very high | High | Very high | |
| Very low | Low | Low | |
| Low | Low | Low | |
| High | Moderately high | High | |
| Low | Moderately low | Intermediate | |
| Moderately high | Moderately low | Moderately high | |
| Very low | Moderately low | Low | |
| Moderately high | Moderately low | Intermediate* | |
| Moderately high | Moderately high | Moderately high | |
| Intermediate | Moderately low | Intermediate | |
| Very low | Low | Low | |
| Very low | Low | Low | |
| Low | Moderately low | Intermediate | |
| Very low | Moderately low | Low | |
| Low | Moderately low | Low* | |
| Iceland | Intermediate | Moderately Low | Intermediate |
| Low | Moderately high | Intermediate | |
| Intermediate | Moderately low | Intermediate | |
| Intermediate | Low | Intermediate | |
| Low | Moderately high | Intermediate | |
| High | Moderately low | Moderately high* | |
| Kenya | High | High | High |
| Low | Moderately low | Intermediate | |
| Moderately high | Moderately low | Intermediate* | |
| Malaysia | Intermediate | Moderately low | Intermediate |
| Moderately high | Moderately low | Intermediate* | |
| Very low | Moderately high | Intermediate | |
| Low | Moderately low | Intermediate | |
| Very low | Low | Low | |
| Poland | Moderately high | Moderately low | Moderately high |
| Intermediate | Moderately low | Intermediate | |
| Intermediate | Low | Intermediate | |
| Moderately high | Moderately low | Intermediate* | |
| Very low | Low | Low | |
| Intermediate | Moderately low | Intermediate | |
| Moderately high | Moderately low | Moderately high | |
| Intermediate | Low | Low* | |
| Very low | Low | Low | |
| Switzerland | Very low | Low | Very low* |
| Intermediate | Moderately low | Intermediate | |
| Thailand | Moderately high | Moderately low | Intermediate* |
| High | Moderately high | High | |
| Intermediate | Low | Intermediate | |
| Low | Moderately high | Intermediate | |
| Very low | Moderately high | Intermediate | |
| High | High | High | |
| *Indicates those where the IICRA is one category lower than the IICRA indicated in table 5 in Insurers Rating Methodology. | |||
Table 2
| Life Insurance Industry And Country Risk Assessments On July 27, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Country risk | Industry risk | IICRA | ||||||
| Very low | Moderately low | Low | ||||||
| Low | Moderately high | Intermediate | ||||||
| Low | Moderately high | Intermediate | ||||||
| Moderately high | Low | Intermediate | ||||||
| Very low | Moderately low | Very low* | ||||||
| Moderately high | Moderately low | Intermediate* | ||||||
| Moderately high | Moderately high | Moderately high | ||||||
| Intermediate | Moderately Low | Intermediate | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Low | Moderately low | Low* | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Low | Low | Low | ||||||
| Intermediate | Moderately low | Intermediate | ||||||
| Intermediate | Moderately low | Intermediate | ||||||
| High | Moderately high | High | ||||||
| Low | Moderately low | Intermediate | ||||||
| High | Moderately low | Moderately high* | ||||||
| Low | Moderately high | Intermediate | ||||||
| Malaysia | Intermediate | Low | Intermediate | |||||
| Moderately high | Low | Intermediate | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Low | Low | Low | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Moderately high | Moderately high | Moderately high | ||||||
| Intermediate | Moderately high | Moderately high | ||||||
| Very low | Low | Low | ||||||
| Intermediate | Moderately low | Intermediate | ||||||
| Moderately high | Moderately low | Moderately high | ||||||
| Intermediate | Moderately low | Intermediate | ||||||
| Very low | Moderately high | Intermediate | ||||||
| Switzerland | Very low | Moderately low | Low | |||||
| Intermediate | Moderately high | Moderately high | ||||||
| Thailand | Moderately high | Moderately low | Intermediate* | |||||
| Low | Moderately low | Low* | ||||||
| Very low | Moderately low | Low | ||||||
| Intermediate | Moderately low | Moderately high† | ||||||
| *Indicates those where the IICRA is one category lower than the IICRA indicated in table 5 in Insurers Rating Methodology. †Indicates those where the IICRA is one category higher than the IICRA indicated in table 5 in Insurers Rating Methodology. | ||||||||
Table 3
| Health Insurance Industry and Country Risk Assessments On July 27, 2023 | |||
|---|---|---|---|
| Country risk | Industry risk | IICRA | |
| Very low | Moderately low | Low | |
| Very low | Moderately high | Intermediate | |
| Very low | Moderately high | Intermediate | |
| Low | Moderately low | Intermediate | |
| Very low | Moderately low | Low | |
Table 4
| Global Sectors Industry And Country Risk Assessments On July 27, 2023 | |||
|---|---|---|---|
| Country risk | Industry risk | IICRA | |
| Low | Low | Low | |
| Low | High | Intermediate* | |
| Global Reinsurance Property/Casualty | Low | Moderately high | Intermediate |
| Low | Low | Intermediate^ | |
Table 5
| Other Sectors Industry And Country Risk Assessments On July 27, 2023 | |||
|---|---|---|---|
| Country risk | Industry risk | IICRA | |
| Very low | Moderately low | Low | |
| Canada Mortgage Insurance | Very low | Moderately high | Intermediate |
| Very low | Moderately high | Intermediate | |
| Very low | Low | Low | |
| Very low | Low | Low | |
Related Criteria
- Insurers Rating Methodology, July 1, 2019
- Country Risk Assessment Methodology And Assumptions, Nov. 19, 2013
Related Research
- Country Risk Assessments Update: June 2023, June 06, 2023
This report does not constitute a rating action.
| Primary Credit Analysts: | Mario Chakar, Dubai +971-4-372-7195; mario.chakar@spglobal.com |
| Ali Karakuyu, London + 44 20 7176 7301; ali.karakuyu@spglobal.com | |
| Research Contributor: | Kai B Mirza, London + 44 20 7176 3980; kai.mirza@spglobal.com |
No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.