AM Best Affirms Mongolian Re Credit Ratings
KUALA LUMPUR, Dec 5 (Bernama) -- AM Best has affirmed the financial strength rating of B (Fair) and the long-term issuer credit rating of “bb+” (Fair) of Mongolian National Reinsurance JSC (Mongolian Re).
The outlook of these credit ratings (ratings) is stable, reflecting Mongolian Re’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.
As measured by Best’s Capital Adequacy Ratio, Mongolian Re’s very strong balance sheet assessment is underpinned by its strongest risk-adjusted capitalisation. Its investment portfolio remains liquid and prudent, consisting of only cash and deposits placed with domestic systemically important banks.
According to AM Best in a statement, Mongolian Re maintains appropriate retrocession coverage over its index-based livestock insurance (IBLI) and other volatile lines, with sound credit quality retrocessionaire counterparties.
In the winter of 2023 and the spring of 2024, Mongolian Re experienced the highest IBLI loss in its operating history and released some of its IBLI catastrophic loss reserve in 2024, and AM Best expects the company to gradually replenish its IBLI reserves for future claims.
The global credit rating agency views Mongolian Re’s operating performance as adequate, having delivered an average 30 per cent annual gross premium written growth since 2018 and net profits each year.
Furthermore, Mongolian Re’s business profile is assessed as limited, considering its humble top line and geographic concentration in the Mongolia market when compared to its international non-life reinsurance peers.
A wholly owned company of the Ministry of Finance of Mongolia and incorporated in 2014, Mongolian Re plays a critical role in the domestic insurance market by providing nationwide insurance coverage for the welfare of livestock and herders, while gradually expanding its coverage to other lines, including property, motor, aviation and liability.
-- BERNAMA