Press Release - OCTOBER 31, 2019
Best’s Commentary: Rising Political and Economic Uncertainties Constitute a New Test for Lebanese Insurance Industry
FOR IMMEDIATE RELEASE
LONDON - OCTOBER 31, 2019
In a new Best’s Commentary, “Rising Political and Economic Uncertainties Constitute a New Test for Lebanese Insurance Industry,” AM Best notes that although Lebanese insurers are accustomed to operating in a challenging economic environment, the accelerating decline in investor confidence and U.S. dollar cash-flow constraints create further risks for insurers with fixed costs in U.S. dollars.
Ben Diaz-Clegg, financial analyst, said: “Given the worsening liquidity situation, insurers are taking steps to bolster their own dollar reserves, trying to maximise cash inflows in the currency whilst minimising outflows. A scarcity of U.S. dollars in general circulation also has impacted insurers’ ability to collect premiums, with brokers and policyholders pressuring the market to accept Lebanese pounds.”
AM Best is maintaining close contact with its rated Lebanese (re)insurers during this period of declining economic confidence and instability. Ghislain Le Cam, director, analytics, noted: “AM Best will continue to monitor the situation, paying particular attention to asset-liability matching and how changing economic conditions are factored into reserving practices.”
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=291300 .
AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry.