The Global Market

Larger, Diversified EMEA-Based Insurers Show Better Results

Although volatility can be greater, so can earnings

AM Best identifies four building-blocks to global growth.

February 05, 2019 — OLDWICK, N.J.–(BUSINESS WIRE)–In this episode of AM BestTV, Mahesh Mistry, senior director of analytics, AM Best, said insurers in emerging markets of Europe, Middle East and Africa (EMEA) experienced greater financial volatility in 2018, but that the more well-diversified companies produced stronger earnings. View the entire program here.

Mistry spoke about the building-block approach AM Best employs when evaluating EMEA companies. “AM Best has four main building blocks that it applies: balance sheet strength, operating performance, business profile and enterprise risk management (ERM),” said Mistry. “Now when we are looking at our sample set, you generally find those big global groups that have diversified earnings—not just geographically by earnings, but by product as well—tend to have better results and lower volatility.”

Mistry also said that somewhat unsurprisingly, companies in emerging markets tend to experience more volatility. “Country risk plays a more prominent role in our analysis where we are looking at the economic, political and financial risks,” said Mistry.

To access a copy of this market segment report, titled, “Reviewing Best’s Credit Rating Methodology’s Impact on EMEA Ratings,” visit here.

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