AM Best has assigned Ma’aden Re (MRE), a captive reinsurer for the Saudi Arabian Mining Company (Ma’aden) in Saudi Arabia, a financial strength rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good). The outlook for these ratings is stable, the agency noted.
The ratings are reflective of MRE’s robust balance sheet strength, which AM Best evaluates as very strong. This assessment is supported by MRE’s risk-adjusted capitalization, measured at the strongest level.
AM Best anticipates that MRE’s risk-adjusted capitalization will continue to be maintained at this level, bolstered by the captive’s moderate underwriting exposure, low asset risk profile, and the strong credit quality of its retrocession program. However, the balance sheet strength is somewhat countered by MRE’s high reliance on reinsurance and the concentration of its assets in Saudi Arabia.
MRE, established in November 2021, is a relatively new entity and completed its first full year of operations in 2022. As such, it has a limited track record of performance. The captive’s profitability in 2022 was significantly impacted by two large claims, leading to a combined ratio of 175.9% for the year. However, AM Best projects an improvement in MRE’s profitability in 2023, which is expected to support an adequate performance assessment over time.
Despite MRE’s strategic importance to Ma’aden, its operations are still in the early stages. Currently, the captive’s underwriting is confined to property damage and business interruption reinsurance, with its risks predominantly concentrated in Saudi Arabia.
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