Political and economic risks

Topics: Economics, Insurance, Gross domestic product Pages: 13 (1524 words) Published: October 18, 2013
AMB Country Risk Report

September 28, 2011

France
Country Risk Tier
CRT-1

France is a CRT-1 country with low levels of risk across all three categories. The French economy has been significantly impacted by the global financial crisis. The economy contracted by 2.6% in 2009 and has recovered modestly, with the economy growing by 1.5% in 2010 and by 1.7% in

2011. A fragile labor market, tight credit conditions, and fiscal tightening will create economic difficulty over the next few years.

Economic Risk
Moderate
Low

High

Very Low

The Country Risk Tier (CRT) reflects A.M. Best’s assessment of three categories of risk: Economic, Political and Financial System Risk.

Very High

Political Risk

A.M. Best considers the majority of countries pictured
below to be categorized as CRT-1 and CRT-2. The exceptions are the Eastern European countries of Bosnia and Herzegovina, Belarus, Ukraine, and Poland.

Moderate
Low

High

Very Low

Very High

Financial System Risk
Moderate
Low

High

Very Low

Very High

For information on companies followed
Market Outlooks

Copyright © 2011 by A.M. Best Company, Inc.
All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.

1

AMB Country Risk Report

France

Regional Summary: Western
Europe
In 2010, Western Europe began to
recover from the global economic
recession; however, growth has
remained modest and has faltered
since the start of 2011. This slowdown
is partially due to the sovereign debt
issues that have arisen in the eurozone
and the United States, which have
lowered consumer and business confidence, as well as weak global demand for eurozone exports. The European
Central Bank (ECB) has bought bonds
from several at-risk member states in
an attempt to contain the region’s sovereign debt crisis. • While the ECB has raised interest rates twice in 2011 year-to-date to combat inflation, financial market
uncertainty surrounding the sovereign
debt issues will likely curb further
increases. Moving forward, fiscal
policy across the eurozone will likely
remain tight in order to keep government deficits in check.

Vital Statistics 2010
Nominal GDP
Population
GDP Per Capita
Real GDP Growth
Inflation Rate
Premiums Written (Life)
Premiums Written (Non-Life)
Premiums Growth (09-10)

USD bn
mil
USD
%
%
USD mil
USD mil
%

2582.53
63.0
41,019
1.5
1.7
189,669
59,603
-1.9

Regional Comparison
Country Risk Tier
CRT-1
CRT-1
CRT-2
CRT-2
CRT-1
CRT-1

France
Germany
Spain
Italy
Switzerland
United Kingdom
Source: IMF, Axco, Swiss Re and A.M. Best

4.0
Real GDP

CPI Inflation

3.0

Economic Risk: Very Low

2.0

1.0
%

France is a wealthy, modern economy. The economy is large (5th largest in the world in terms of GDP) and diversified.

0.0
2003

Economic growth may be sluggish
in the second half of 2011, amid fiscal
tightening and uncertainties surrounding the eurozone sovereign debt crisis. Growth is expected to be modest moving forward.

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

-1.0

-2.0

-3.0

Source: IMF World Economic Outlook and A.M. Best

2

AMB Country Risk Report

France

Political Risk Summary

Political Risk: Low

Score 1 (best) to 5 (worst)

France

World Average

France is a member of the European
Union and one of the original 11 countries to adopt the euro as its currency in 1999.

International Transactions Policy

5
4

Legal System

Monetary Policy

3
2
1

Regional Stability

Fiscal Policy

0

Social Stability

Business Environment

Government Stability

The French government is attempting to reduce its holdings of large enterprises and limit its...
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