AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Dellwood Specialty Insurance Company (Dellwood Specialty) (Scottsdale, AZ). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Dellwood Specialty’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 (ERM).

Dellwood Specialty is 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 ratings of Dellwood Specialty reflect its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), 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. Additionally, the ratings reflect 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. 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.

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