HONG KONG--(BUSINESS WIRE)--#insurance--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 Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best�s interactive rating process.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.

Mandal is a leading non-life insurer in Mongolia, which underwrites property and casualty insurance in both the personal and commercial segments. For fiscal year 2022, the company�s gross premium written (net of premium refunds) amounted to MNT 67.7 billion, which supported its position as a leading player in the country�s non-life insurance market. In AM Best�s opinion, Mandal�s business profile currently benefits from its strong control over its distribution, low-acquisition cost structure, and expertise in the risks that it intends to underwrite and retain in its domestic market. However, these advantages are partly offset by several risk factors, which include the company�s limited scale and high business concentration risk associated with its narrow geographical focus.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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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Christopher Sharkey
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Al Slavin
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