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Copyright © 2018 A.M. Best Company, Inc. and/or its affiliates. All rights reserved. No part of this report or document may be reproduced, distributed, or stored in a database or retrieval system, or transmitted in any form or by any means without the prior written permission of the A.M. Best Company. While the data in this report or document was obtained from sources believed to be reliable, its accuracy is not guaranteed. For additional details, refer to our Terms of Use available at A.M. Best website: www.ambest.com/terms.
www.ambest.com
Nominal GDP USD bn 2583.56Population mil 64.8GDP Per Capita USD 39,869Real GDP Growth % 1.8Inflation Rate % 1.2
Literacy Rate % n.a.Urbanization % 80.0Dependency Ratio % 59.2Life Expectancy Years 81.9Median Age Years 41.4
Insurance Regulator
Premiums Written (Life) USD mil 153,520Premiums Written (Non-Life) USD mil 88,083Premiums Growth (2016 - 2017) % -1.3
FranceGermanyItalySpainSwitzerlandUnited Kingdom
CRT-1CRT-1
Country Risk TierCRT-1CRT-1CRT-2CRT-2
Vital Statistics 2017
Insurance Statistics
Regional Comparison
French Prudential Supervisory Authority (ACPR) under Banque
de France
United Nations Estimates
Source: IMF, UN, Swiss Re, Axco and A.M. Best
Regional Summary: Western Europe•WesternEuropeisahighlydevelopedandaffluentregion.
The 28 countries of the EU accounted for approximately 21.9% of the world’s domestic product in 2016 and 21.6% in2017,afigurethatisprojectedtogrowto22.5%in2018.
•Growth has been driven largely by rising domestic demand duetogrowingconsumerandbusinessconfidence,lowerunemployment rates, and credit growth.
•The European Central Bank (ECB) has decided to end its three-year EUR2.4 trillion quantitative easing program by the end of 2018, although it did signal that any rise in interest rates before September 2019 was unlikely. The policy rate has been below 1.0% since July 2012 and has been at 0.0% since March 2016.
•Concerns include political instability in certain countries, ongoing uncertainty about Brexit and its potential implications,andbelow-trendgrowthandinflation.
Economic Risk Political Risk Financial System Risk
Country Risk Tier 1 (CRT-1) Very Low Level of Country Risk
Country Risk Tier 2 (CRT-2) Low Level of Country Risk
Country Risk Tier 3 (CRT-3) Moderate Level of Country Risk
Country Risk Tier 4 (CRT-4) High Level of Country Risk
Country Risk Tier 5(CRT-5)VeryHighLevelofCountryRisk
FranceCRT-1August 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.
•France is a CRT-1 country, with low or very low levels of economic,political,andfinancialsystemrisk.
•Over the last few years, real GDP growth has been constrained due to high levels of unemployment, labor inflexibility,andweakdomesticdemandgrowth.
•GDP growth was 1.8% in 2017 and is expected to reach 2.1% in 2018. The increase in economic growth will be driven by a rise in both domestic consumption and investment activity.
•A.M.Bestcategorizesthemajorityofcountriespicturedin the map as CRT-1 and CRT-2. Notable exceptions are many of the Eastern European countries such as Belarus, Romania, and Ukraine.
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•France’s economy, the second largest in the eurozone, is
experiencing a cyclical recovery, as GDP growth remains positive. Nevertheless, GDP growth continues to fall below expectations, indicating the need for additional structural reforms.
•Headwinds for France include rising trade tensions due to growing trade protectionist policies, ongoing uncertainty surrounding Brexit, aging demographics, and the potential foramisstepfromtheEuropeanCentralBankasitadjustsmonetary policy.
•Job growth accelerated in 2017, resulting in lower levels of unemployment for the year. The unemployment rate was approximately 9.4% in 2017 and is expected to decline further in 2018, to 8.8%.
•Theeconomyisdiversified,withlimitedstateinterventionin most sectors. However, the government maintains a strong presence in the defense, public transport, and power industries.
Political Risk: Low•France is a member of the EU and one of the original 11
countries to adopt the euro as its currency in 1999.
•President Emmanuel Macron, a member of the La République en Marche (REM) party, defeated the far-right candidate, Marine Le Pen, in the April 2017 presidential elections. In the recent parliamentary elections, REM securedanabsolutemajority,whichwillfacilitatethepassage of legislation and provide political stability.
•Macron has been able to pass legislation with regard to labor and tax reforms, which focused on lowering tax rates andincreasingtheflexibilityofthelabormarket.However,this has led to tensions with various union groups and has causedsignificantdisruptionstoairandrailtransportation.
•AdditionaleffortstoimproveFrance’scompetitiveness,including reforms of unemployment insurance, pensions, and a reduction in companies’ administrative burden, are likely to be undertaken in the near term.
Financial System Risk: Very Low•Since 2010, the Prudential Control Authority—the Autorité
de Contrôle Prudentiel (ACPR)—regulates the insurance and banking industries.
•The banking sector has bolstered its balance sheet considerablysincethe2008financialcrisis,doublingitscapital. However, the regulatory framework is still being strengthened,asbanksworktofinalizeaspectsoftheBasel III guidelines.
•Monetary policy, directed by the European Central Bank, has been accommodative towards growth and has materially decreased the government’s borrowing costs.
•Corporate debt levels have increased, which could become a vulnerability when interest rates rise. Authorities have limited banks’ exposures to individual large indebted corporations.
Economic Growth (%)
-4
-3
-2
-1
0
1
2
3
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
FranceWorld Average
Source: A.M. Best
France
GDP Per Capita and Population
0
10
20
30
40
50
60
70
80
90
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
France Germany Italy Spain Switzerland UnitedKingdom
USD
Millions
GDP Per Capita Population
Source: IMF and A.M. Best
BEST’S COUNTRY RISK REPORT
www.ambest.com
Page 2 of 2 August 22, 2018