White Mountains Insurance Group, Ltd. is set to acquire a majority stake in Bamboo Ide8 Insurance Services, LLC Bamboo, a managing general agent (MGA) specialising in the California homeowners insurance market.
The Insurance firm intends to invest approximately $285m in this strategic move, which includes primary capital to support Bamboo’s growth. As part of the deal, White Mountains will acquire around 70% of Bamboo’s basic shares outstanding. Bamboo, established in 2018 by John Chu, has rapidly gained ground in the competitive California insurance market, offering coverage to over 100,000 policyholders.
It employs a technology-driven underwriting platform to assess and manage risks efficiently. With this acquisition, White Mountains aims to support Bamboo’s expansion beyond California, seizing new opportunities in other states. Notably, John Chu and Bamboo’s current management team will continue to lead the company and retain a significant equity stake.
The transaction is scheduled to conclude in the first quarter of 2024, pending regulatory approvals and customary closing conditions. The ownership share to be acquired by White Mountains and the corresponding investment will be determined based on Bamboo unitholder elections made before closing.
Bamboo Ide8 Insurance Services, LLC is a technology-focused insurance distribution platform that caters to the residential property market in California. Operating mainly as a full-service MGA, Bamboo handles all aspects of the placement process on behalf of its fronting and (re)insurance partners.
This includes product development, marketing, underwriting, policy issuance, and claims oversight, with commissions tied to the volume and profitability of the placed insurance. Bamboo’s emphasis on underwriting excellence leverages technology and data science tools to assess, price, and manage risks effectively.
Additionally, Bamboo operates two integrated businesses: a retail agency offering ancillary products on behalf of third parties and a captive reinsurer participating in a share of the underwriting risk of Bamboo’s MGA programs.
White Mountains is a financial services holding company domiciled in Bermuda. It is publicly traded on the New York Stock Exchange under the symbol WTM and on the Bermuda Stock Exchange under the symbol WTM.BH.
“We are pleased to make this investment alongside John and the Bamboo management team. Bamboo is delivering a much-needed insurance alternative to homeowners in California. Bamboo has strong momentum, and we look forward to supporting its continued growth,” said Chris Delehanty, Head of M&A of White Mountains.
“This transaction marks a new and exciting chapter for Bamboo. We are fortunate to have found a like-minded capital partner who shares our vision and has a strong track record of successful insurance partnerships,” said John Chu, Founder and CEO of Bamboo.
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