An understanding of the historical variations in property prices since they were acquired can provide an indication. There is no substitute for an accurate, objective valuation. This is important in countries where real estate is a significant proportion of insurance company assets. For some companies, the percentage is far higher. However, as some international insurers have learned, they cannot always be taken for granted in emerging markets.
Control can sometimes be a problem.
Even when it has been verified that the investment portfolio is real and properly valued under current market conditions, there remains the question of future risk to the portfolio. Emerging markets suffer from an absence or inadequacy of rating systems. However the track record in this area has not been very good lately, as Korea and other Asian countries have demonstrated. Rating issues that are placed in international markets, denominated in dollars or other major currencies. Rating financial institutions, especially banks.