AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to Ma’aden Re Limited (MRE) (United Arab Emirates), a captive reinsurer of Saudi Arabian Mining Company (Ma’aden) (Saudi Arabia). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect MRE’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

MRE’s very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects MRE’s risk-adjusted capitalisation to remain at the strongest level, supported by the captive’s moderate underwriting exposure, low asset risk profile and the good credit quality of its retrocession programme. Partly offsetting factors in the balance sheet strength assessment are the captive’s elevated dependence on reinsurance and its concentration of assets in Saudi Arabia.

MRE is a newly formed captive, established in November 2021. It completed its first full year of operations in 2022 and has a limited performance track record. The captive’s profitability in 2022 was materially impacted by two large claims, which exhausted its aggregate yearly limits and resulted in the combined ratio of 175.9% for the year. MRE’s profitability is projected to improve materially in 2023 and to remain supportive of an adequate assessment over the cycle.

Whilst MRE is of strategic importance to Ma’aden, it is still in its infancy of operations. To date, the captive only writes property damage and business interruption reinsurance, and its risks are concentrated in Saudi Arabia.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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