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Nominal GDP USD bn 524.89Population mil 38.0GDP Per Capita USD 13,823Real GDP Growth % 4.6Inflation Rate % 2.0

Literacy Rate % 99.8Urbanization % 60.5Dependency Ratio % 43.9Life Expectancy Years 77.8Median Age Years 40.7

Insurance Regulator

Premiums Written (Life) USD mil 5,036Premiums Written (Non-Life) USD mil 10,934Premiums Growth (2016 - 2017) % 9.4

PolandAustriaCzech RepublicRomaniaSloveniaItaly

Vital Statistics 2017

Insurance Statistics

Regional Comparison

Polish Financial Supervision Authority

United Nations Estimates

CRT-2CRT-2

Country Risk TierCRT-2CRT-1CRT-2CRT-3

Source: IMF, UN, Swiss Re, Axco and A.M. Best

Regional Summary: Eastern Europe•The Eastern European countries are at various stages of

bringing their legal, economic, and political frameworks to be more in line with European Union standards. The region has a great deal of economic potential, as it further integrates with the global markets of the European Union, butallofitscountrieswouldultimatelybenefitfrommoretransparent and less cumbersome regulatory environments.

•Economic growth in 2017 was robust and is expected to continue in 2018 on growing domestic consumption, fueled by rising wage and falling unemployment rates. Additionally, funds provided by the EU’s Structural and Investment Funds will continue to drive public spending.

•AlthoughmanyEasternEuropeancountriesareclassifiedas emerging markets or frontier markets, reforms have enhanced economic stability and regional political power.

•Risks for the region include the potential for tightening globalfinancialconditions,currencyvolatility,anincreaseingovernmentinfluenceonstate-runinstitutionspotentiallyundermining independence, and high levels of corruption.

Economic Risk Political Risk Financial System Risk

Country Risk Tier 1(CRT-1)VeryLowLevelofCountryRisk

Country Risk Tier 2(CRT-2)LowLevelofCountryRisk

Country Risk Tier 3(CRT-3)ModerateLevelofCountryRisk

Country Risk Tier 4(CRT-4)HighLevelofCountryRisk

Country Risk Tier 5(CRT-5)VeryHighLevelofCountryRisk

PolandCRT-2August 22, 2018Region: EuropeCountry Risk Criteria ProceduresGuide to Best’s Country Risk Tiers•TheCountryRiskTier(CRT)reflectsA.M.Best’s

assessment of three categories of risk: Economic, Political, and Financial System Risk.

•Poland,aCRT-2country,haslowlevelsofeconomicandfinancialsystemriskandamoderatelevelofpoliticalrisk.The economy has performed well over the last few years, aided by increases in both government spending and domesticconsumption.However,therearesomeconcernsabout declining investor sentiment in the wake of rising levels of government ownership, as well as new business restrictionsandtaxesfortheforeign-dominatedeconomicsector.

•The majority of countries pictured in the map below are categorizedasCRT-1andCRT-2.Notableexceptionsare the Eastern European countries of Bosnia and Herzegovina,Belarus,andUkraine.

BEST’S COUNTRY RISK REPORT

Curacao

Cayman Islands Anguilla

BritishVirginIslands

St. Maarten

Zimbabwe

Zambia

Yemen Vietnam

Somoa

Venezuela

Vanuatu

Uzbekistan

Uruguay

United States

UnitedKingdom

U.A.E.

Ukraine

Uganda

TurkmenistanTurkey

Tunisia

Trinidad & Tobago

Tonga

Togo

Thailand

Tanzania

Tajikistan

Syria

Switzerland

Sweden

Swaziland

Suriname

Sudan

Sri Lanka

Spain

South Africa

Somalia

Solomon Islands

Slovenia

Slovakia

Singapore

SierraLeone

Serbia

Senegal

Saudi Arabia

Sao Tome & Principe

San Marino

St Vincent & the Grenadines St Lucia

St Kitts & Nevis

Rwanda

Russia

Romania

Qatar

PuertoRico

Portugal

Poland

Philippines

Peru

Paraguay

PapuaNew Guinea

Panama

Palau

Pakistan

Oman

Norway

Nigeria

NigerNicaragua

New Zealand

Netherlands

Nepal

Namibia

Mozambique

Morocco

MongoliaRepublic of

Moldova

Mexico

Mauritius

Mauritania

Malta

Mali

Malaysia

Malawi

Madagascar

Macedonia

Luxembourg

Lithuania

Liechtenstein

Libya

Liberia

Lesotho

Lebanon

Latvia

Laos

Kyrgyzstan

Kuwait

SouthKorea

NorthKorea

Kenya

Kazakhstan

Jordan

Japan

Jamaica

Italy

Israel

Ireland

Iraq Iran

India

Iceland

Hungary

Honduras

Haiti

Guyana

Guinea-Bissau Guinea

Guatemala

Grenada

Greenland

Greece

Ghana

Germany

Georgia

Gambia

Gabon

FrenchGuiana

France

Finland

Fiji

Falkland Islands

CanaryIslands

Azores

Reunion

Sumatra

Borneo

Taiwan

Sakhalin

Kuril Is

lands

NewGuinea

Tierra Del Fuego

South Georgia

Ethiopia

Estonia

Eritrea

Equatorial Guinea

El Salvador

Egypt

Ecuador

East Timor

DominicanRepublic

Dominica

Dijbouti

Denmark

CzechRepublic

Cyprus

Cuba

Croatia

Cote d'Ivoire

Costa Rica

Congo

Dem. Republicof Congo

Comoros

Colombia

China

Chile

Chad

Central AfricaRepublic

Cape Verde

Canada

Cameroon

Cambodia

Burundi

Myanmar

BurkinaFaso

Bulgaria

Brunei

Brazil

Botswana

Bosnia &Herzegovina

Bolivia

Bhutan

Benin

Belize

Belgium

Belarus

Barbados

Bangladesh

Bahrain

Bahamas

Azerbaijan

Austria

Australia

Armenia

Argentina

Antigua & Barbuda

Angola

Andorra

Algeria

Albania

Afghanistan

Western Sahara(Occupied by Morocco)

Montenegro

Isle of Man

Jersey

Guernsey

Monaco

Gibraltar

Seychelles

Russia

Hong KongMacau

Russia

Indonesia

Guam

Northern Mariana Islands

Wake Island

Marshall Islands

Federated Statesof Micronesia

Nauru

Tuvalu

CoralSeaIslands

New Caledonia

Norfolk Island

French Polynesia

Pitcairn Islands

Kiribati

Tokelau

AmericanSamoa

CookIslands

Niue

Curacao

Cayman Islands Anguilla

BritishVirginIslands

St. Maarten

Zimbabwe

Zambia

Yemen Vietnam

Somoa

Venezuela

Vanuatu

Uzbekistan

Uruguay

United States

UnitedKingdom

U.A.E.

Ukraine

Uganda

TurkmenistanTurkey

Tunisia

Trinidad & Tobago

Tonga

Togo

Thailand

Tanzania

Tajikistan

Syria

Switzerland

Sweden

Swaziland

Suriname

Sudan

Sri Lanka

Spain

South Africa

Somalia

Solomon Islands

Slovenia

Slovakia

Singapore

SierraLeone

Serbia

Senegal

Saudi Arabia

Sao Tome & Principe

San Marino

St Vincent & the Grenadines St Lucia

St Kitts & Nevis

Rwanda

Russia

Romania

Qatar

PuertoRico

Portugal

Poland

Philippines

Peru

Paraguay

PapuaNew Guinea

Panama

Palau

Pakistan

Oman

Norway

Nigeria

NigerNicaragua

New Zealand

Netherlands

Nepal

Namibia

Mozambique

Morocco

MongoliaRepublic of

Moldova

Mexico

Mauritius

Mauritania

Malta

Mali

Malaysia

Malawi

Madagascar

Macedonia

Luxembourg

Lithuania

Liechtenstein

Libya

Liberia

Lesotho

Lebanon

Latvia

Laos

Kyrgyzstan

Kuwait

SouthKorea

NorthKorea

Kenya

Kazakhstan

Jordan

Japan

Jamaica

Italy

Israel

Ireland

Iraq Iran

India

Iceland

Hungary

Honduras

Haiti

Guyana

Guinea-Bissau Guinea

Guatemala

Grenada

Greenland

Greece

Ghana

Germany

Georgia

Gambia

Gabon

FrenchGuiana

France

Finland

Fiji

Falkland Islands

CanaryIslands

Azores

Reunion

Sumatra

Borneo

Taiwan

Sakhalin

Kuril Is

lands

NewGuinea

Tierra Del Fuego

South Georgia

Ethiopia

Estonia

Eritrea

Equatorial Guinea

El Salvador

Egypt

Ecuador

East Timor

DominicanRepublic

Dominica

Dijbouti

Denmark

CzechRepublic

Cyprus

Cuba

Croatia

Cote d'Ivoire

Costa Rica

Congo

Dem. Republicof Congo

Comoros

Colombia

China

Chile

Chad

Central AfricaRepublic

Cape Verde

Canada

Cameroon

Cambodia

Burundi

Myanmar

BurkinaFaso

Bulgaria

Brunei

Brazil

Botswana

Bosnia &Herzegovina

Bolivia

Bhutan

Benin

Belize

Belgium

Belarus

Barbados

Bangladesh

Bahrain

Bahamas

Azerbaijan

Austria

Australia

Armenia

Argentina

Antigua & Barbuda

Angola

Andorra

Algeria

Albania

Afghanistan

Western Sahara(Occupied by Morocco)

Montenegro

Isle of Man

Jersey

Guernsey

Monaco

Gibraltar

Seychelles

Russia

Hong KongMacau

Russia

Indonesia

Guam

Northern Mariana Islands

Wake Island

Marshall Islands

Federated Statesof Micronesia

Nauru

Tuvalu

CoralSeaIslands

New Caledonia

Norfolk Island

French Polynesia

Pitcairn Islands

Kiribati

Tokelau

AmericanSamoa

CookIslands

Niue

Economic Risk: Low•Polandistheeighth-largesteconomyintheEuropean

Union. Important sectors include banking, food processing, and textiles. The economy is rebalancing to becomemoveservices-oriented.

•Despite relatively strong economic growth, Poland still faces structural issues. Challenges include high levels ofbureaucracy,insufficientinfrastructure,arigidlaborcode, a complicated tax system, a tight labor market, an overburdened judicial system, and unfavorable demographics.

•The labor market continues to tighten, with an rate of unemployment of 6.1% as of May 2018. The IMF has highlighted that demographic headwinds may weigh onthecountry’slong-termgrowthprospects.Poland’sdemographics have changed as a result of longer life expectancies and lower fertility rates.

•The government has favored keeping certain strategic industries under state control. These industries include telecommunications, mining, and energy.

Political Risk: Moderate•In2017,PrimeMinisterBeataSzydłoresignedfromoffice.

President Andrzej Sebastian Duda designated Mateusz Morawiecki as acting prime minister.

•ThegovernmentiscurrentlyledbythePiS-ledconservative party, which controls the majority of seats in parliament and continues to enjoy popular support. The next legislative election is scheduled for October 2019 and the next presidential election, May 2020.

•Ongoing disputes with the European Commission about recent judicial reforms are creating political and regulatory uncertainty.TheECinvokedArticle7oftheLisbontreaty against the country in December 2017. If Poland does not reverse recent actions, which have undermined the independence of the judiciary, it could face harsh penalties.

Financial System Risk: Low•The insurance industry is regulated by the Ministry of

Finance’s Polish Financial Supervision Authority. The Financial Stability Committee, under the National Bank of Poland, is responsible for macro prudential supervision of thefinancialsystem.

•In2017,Polandendeditsflexiblecreditlinearrangementwith the IMF. The arrangement, which was a precautionary measure, was to provide the country with additional buffers against external shocks. The country has strengtheneditsfiscalpositionandincreaseditsforeignexchange reserves.

•Thebankingsectorisrelativelyhealthywithsufficientlevels of capitalization and liquidity. Deposit growth has also grown considerably. The low interest rate environment,however,hasconstrainedprofitability.

EconomicGrowth(%)

-2

-1

0

1

2

3

4

5

6

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Real GDP CPI Inflation

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

Political Risk SummaryScore1(best)to5(worst)

0

1

2

3

4

5International Transactions

Policy

Monetary Policy

Fiscal Policy

Business Environment

Labor FlexibilityGovernment Stability

Social Stability

Regional Stability

Legal System

Poland

World Average

Source: A.M. Best

Poland

GDP Per Capita and Population

0

10

20

30

40

50

60

70

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Poland Austria Czech Republic

Romania Slovenia Italy

USD

Millions

GDP Per Capita Population

Source: IMF and A.M. Best

BEST’S COUNTRY RISK REPORT

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