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 678.58Population mil 8.4GDP Per Capita USD 80,591Real GDP Growth % 1.1Inflation Rate % 0.5

Literacy Rate % n.a.Urbanization % 74.1Dependency Ratio % 48.8Life Expectancy Years 82.6Median Age Years 42.4

Insurance Regulator

Premiums Written (Life) USD mil 29,944Premiums Written (Non-Life) USD mil 27,960Premiums Growth (2016 - 2017) % -1.8

SwitzerlandFranceGermanyItalySpainUnited Kingdom

CRT-2CRT-1

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

Vital Statistics 2017

Insurance Statistics

Regional Comparison

Financial Market Supervisory Authority

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

SwitzerlandCRT-1August 22, 2018Region: Western 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.

•Switzerland is a CRT-1 country, with very low levels of economic,political,andfinancialsystemrisk.Switzerlandis not a member of the European Union.

•The Swiss economy continues to grow modestly, with real GDP up 1.1% in 2017, and 2018 growth expected at 2.3%. The country has one of the highest per capita GDP in the world, estimated at over USD80,000.

•A.M.Bestcategorizesthemajorityofcountriespicturedinthe map as CRT-1 and CRT-2. Notable exceptions are the Eastern European countries of Bosnia and Herzegovina, Belarus, 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: Very Low•Switzerland’s wealthy and open economy is centered onitsfinancialservicessectoranditshighlyadvancedtechnologymanufacturingindustry.Itiswelldiversifiedand well integrated into the global economy.

•Declines in global demand, international trade tensions, oranincreaseinfinancialsectorvolatilitywouldadverselyaffect the modest growth expectations.

•Inflationturnedpositivein2017,followingfiveyearsofdeflation.Higherenergyprices,thedepreciationofthefranc, higher investment, and strong internal and external demandforSwissgoodsshouldkeepinflationpositive,butmodest, in the near to medium term.

•Switzerland’s aging population and limited immigration will increase pressure on its public pension system.

Political Risk: Very Low•Switzerland, though not part of the EU, has strong ties with

it due to its numerous bilateral agreements.

•Switzerland’s four main political parties have a history of collaboration and maintaining government stability. However, immigration and anti-EU sentiment serve as contentious and potentially divisive topics.

•The right-wing Swiss People’s Party (SVP) is currently gathering the necessary signatures to hold a country-wide referendum in July 2019 on the free-movement-of-people agreement with the EU. The SVP promotes a policy of “limited immigration.”

•The government is attempting to reform the corporate tax system, to comply with OECD and EU regulations. Tax Package 17, as it is known, is focusing on cutting corporate tax rates. There is concern that the reforms will shiftthefiscalburdentoindividuals.

•Switzerlandhasverylittlecorruption,benefitsfroma strong infrastructure, and maintains a solid legal frameworkandanindependentjudiciarysystem.

Financial System Risk: Very Low•TheSwissfinancialsector,includinginsurance,hasbeen

regulated by the Financial Market Supervisory Authority since 2009.

•The Swiss National Bank currently maintains the lowest baselendingrateintheworld,at-0.75%.Itmaintainsthisratetohelpspurinflation,diminishtheattractivenessofthe Swiss franc as a safe haven currency, and increase the competitiveness of Swiss goods and services.

•The Swiss banks continue to improve their capital buffers, enhancing the system’s overall stability. Although currently stable, increased bank lending to the real estate sector for development could pose concentration risk.

•Under international pressure, Switzerland agreed to comply with OECD transparency tax standards. The country, however, does remain on the EU’s grey list for tax havens.

Economic Growth (%)

-3

-2

-1

0

1

2

3

4

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

SwitzerlandWorld Average

Source: A.M. Best

Switzerland

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

Switzerland France Germany Italy Spain 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