Ma’aden Re assigned “good” credit standing from AM Greatest

AM Greatest has assigned Ma’aden Re (MRE), a captive reinsurer for the Saudi Arabian Mining Firm (Ma’aden) in Saudi Arabia, a monetary energy ranking of B++ (Good) and a Lengthy-Time period Issuer Credit score Score of “bbb+” (Good). The outlook for these rankings is steady, the company famous.

The rankings are reflective of MRE’s sturdy steadiness sheet energy, which AM Greatest evaluates as very sturdy. This evaluation is supported by MRE’s risk-adjusted capitalization, measured on the strongest stage.

AM Greatest anticipates that MRE’s risk-adjusted capitalization will proceed to be maintained at this stage, bolstered by the captive’s reasonable underwriting publicity, low asset threat profile, and the sturdy credit score high quality of its retrocession program. Nevertheless, the steadiness sheet energy is considerably countered by MRE’s excessive reliance on reinsurance and the focus of its belongings in Saudi Arabia.

MRE, established in November 2021, is a comparatively new entity and accomplished its first full yr of operations in 2022. As such, it has a restricted observe file of efficiency. The captive’s profitability in 2022 was considerably impacted by two giant claims, resulting in a mixed ratio of 175.9% for the yr. Nevertheless, AM Greatest initiatives an enchancment in MRE’s profitability in 2023, which is anticipated to assist an ample efficiency evaluation over time.

Regardless of MRE’s strategic significance to Ma’aden, its operations are nonetheless within the early levels. At present, the captive’s underwriting is confined to property harm and enterprise interruption reinsurance, with its dangers predominantly concentrated in Saudi Arabia.

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