AM Best Assigns Credit Ratings and National Scale Rating to Mohandes Insurance Company

LONDON--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of “bb” (Fair) to Mohandes Insurance Company (Mohandes) (Egypt). Additionally, AM Best has assigned the Egypt National Scale Rating of aaa.EG (Exceptional) to Mohandes. The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Mohandes’ balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

Mohandes’ balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects the company’s BCAR scores to remain above the minimum level required for the strongest assessment, supported by good internal capital generation. The balance sheet strength assessment factors in the company’s high dependence on reinsurance and Egypt’s high economic and political risks, as well as very high financial system risk.

Mohandes has a track record of adequate operating performance, demonstrated by a five-year (2020-2024) weighted average return-on-equity (ROE) and combined ratio of 25.5% and 97.3%, respectively. AM Best notes that ROE should be viewed in light of the recent high levels of inflation in Egypt. The company’s investment results are the primary contributor to earnings, supported by the high interest rate environment in Egypt, accounting for 79% of pre-tax profits for fiscal year-ended 30 June 2024.

Mohandes has a long-standing presence in the Egyptian insurance market, with a market share of approximately 3% based on non-life gross written premiums. The company's profile is limited to operating exclusively within Egypt and is considered small on a global basis. Mohandes’ business profile is diversified on a gross basis, with the business concentrated towards motor on a net basis.

Mohandes’ ERM framework is considered to be evolving. In recent years, positive steps were taken to improve its risk management capabilities; however, further development is required in order to fully embed the framework.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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