AM Best affirms the Financial Strength Rating of ‘B++’ (Good) and the Long-Term Issuer Credit Rating of ‘bbb+’ (Good) of Ma’aden Re Limited (MRE). The outlook of these credit ratings is ‘stable’. MRE is a single-parent captive, domiciled in the Dubai International Financial Centre and established in November 2021. It serves as the captive reinsurer of Saudi Arabian Mining Company (Ma’aden), providing reinsurance protection for the group’s global risks. The ratings reflect MRE’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM). Additionally, the ratings account for a rating enhancement based on MRE’s strategic importance to its parent as a core component of the group's risk management framework. MRE’s balance sheet strength is underpinned by robust risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The agency notes that the captive maintains a low asset risk profile and moderate underwriting exposure. While MRE benefits from the good credit quality of its retrocession programme, AM Best highlights a high reliance on retrocession to manage its peak mining risks as a partially offsetting factor. The captive's business profile is restricted by its focus on Ma’aden’s operations, resulting in a lack of geographical and product diversification. However, MRE is fully integrated into the parent’s ERM processes, which the agency deems appropriate for the complexity of the group’s mining and industrial risks. AM Best expects the captive’s operating performance to remain adequate over the medium term. Although technical results may experience volatility due to the nature of the underlying mining risks, this is expected to be mitigated by disciplined underwriting and retrocession structures.
