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

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. The ratings also reflect, in the form of rating enhancement, MRE’s strategic importance to its parent, Ma’aden.

MRE’s strong balance sheet strength assessment is underpinned by robust risk-adjusted capitalisation, moderate underwriting exposure, a low asset risk profile and the good credit quality of its retrocession programme. Partly offsetting to the balance sheet strength assessment is the captive’s high dependence on retrocession, particularly following the increase of its risk limit, which elevates credit risk under a stressed scenario.

MRE is a single-parent captive, domiciled in the Dubai International Financial Centre, established in November 2021. The captive underwrites Ma’aden’s whole property damage and business interruption reinsurance programme. Additionally, it has started to modestly expand into additional lines to meet the insurance needs of Ma’aden. MRE’s risks are concentrated to Saudi Arabia, where the majority of Ma’aden’s assets are located.

MRE’s is expected to generate a profitable return for the year ended 2025, and over the medium term, will remain supportive of an adequate assessment. The result for the year ended 2025, will be negatively impacted by one large claim. MRE generated a profit of USD 5.8 million in 2024 (2023: USD 13.6 million), its third full year of operation, translating into an annualized return on equity of 9%, as calculated by AM Best. The captive’s 2024 profit was driven by strong technical profitability, the result of a relatively benign loss year and healthy investment income. Whilst MRE has reported solid results in 2024 and 2023, the captive’s performance is subject to volatility as evidenced by the negative underwriting result, which was reported in its first year of operation in 2022. This followed two large claims that exhausted its aggregate yearly limits and resulted in a combined ratio of 175.9%.

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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