HONG KONG, March 6 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of Mandal Daatgal JSC (Mandal) (Mongolia). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect Mandal’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.Mandal’s balance sheet strength is supported by its risk-adjusted capitalisation, which AM Best estimated to be at the very strong level as of year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR); however, the absolute size of its capital base remains small at MNT 29.1 billion (USD 8.3 million).
Mandal’s operating performance has been strong and consistent, with key operating metrics generally outperforming those of its regional peers. This is attributed to the company’s history of profitable underwriting and investment, as demonstrated by a five-year average combined ratio of approximately 95% and an average operating ratio of 72% (2018-2022). During fiscal year 2022, the company’s combined ratio exceeded 100%, mainly due to higher personnel expenses amid high inflation, as well as a higher-than-expected number of large losses in both the motor physical damage line and the commercial property line. In response, Mandal has implemented various initiatives to stabilise and improve its prospective underwriting performance, which AM Best expects will help strengthen Mandal’s underwriting and operating results.
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