AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Dellwood Specialty, a startup excess and surplus (E&S) lines insurance company targeting small- and medium-size enterprise risks exclusively through wholesale brokers and program administrators. The outlook assigned to these ratings is stable.
According to AM Best, the ratings reflect Dellwood Specialty’s balance sheet strength, which it assesses as very strong, as well as the E&S startup’s adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings additionally reflect Dellwood Specialty’s risk-adjusted capitalisation being at the strongest level, supported by an initial capital raise of more than $250 million.
“This capital raise exceeded initial targets with investors including several insurance carriers and individuals. AM Best expects the company’s strongest level of risk-adjusted capitalization to persist over its initial five-year startup phase,” the rating agency added.
AM Best also highlighted Dellwood Specialty’s adequate operating performance, underpinned by a credible business plan.
“The company’s limited business profile and appropriate ERM highlight the risks inherent in implementing its strategy as a startup E&S carrier,” AM Best said.
The rating agency continued, “The E&S segment has grown substantially and is expected to expand further; however, it remains very competitive with established carriers and many new entrants vying for business.
“Dellwood’s senior management team consists of individuals with extensive experience and strong track records in the industry.
“To navigate this environment, Dellwood Specialty plans to rely on its innovative technology stack and investors’ long-term commitment to the business.”
