AM Best has assigned a financial strength rating of A- and a long-term issuer credit rating of “a-” to E&S start-up Upland Specialty.
As previously reported, Upland Specialty – a subsidiary of Pursuit Investors, the holding company of Upland Capital Group – has been launched by former Narragansett Bay Insurance Company CEO Todd Hart along with former Hallmark executives including James Damonte and Mark Morrison.
Hart is president and CEO of Upland, Damonte is president of insurance operations and CUO, and Morrison is executive vice president and CFO. The start-up has up to $200mn of backing from Newlight Partners. In a statement, AM Best said its ratings on the company reflect its very strong consolidated balance sheet strength, adequate operating performance, limited business profile and appropriate enterprise risk management.
“The ratings also consider Upland Specialty’s excellent projected risk-adjusted capitalisation and sound business strategy, which should position the company to take advantage of current favourable market conditions in the E&S product lines segment that the company is targeting,” the agency added.
AM Best said the start-up’s management team possesses “significant experience and a solid track record in the E&S market”.
“AM Best believes that this experience, and management’s existing relationships with its distribution sources, will be key to the company quickly gaining traction in its targeted markets,” it continued.
The ratings also reflect the execution risk faced by any start-up company, including the challenge of achieving operating profitability until it gains scale.
“In AM Best’s view, gaining sufficient scale may be the biggest challenge to the successful execution of the company’s strategy, as growth will be dependent on the E&S market’s acceptance of a startup company that will be focused initially on long-tail business lines.
“However, management’s extensive relationships in the wholesale distribution market should help in this regard,” the firm commented.
Upland Specialty was assigned a preliminary credit assessment of A- by AM Best in late January.