White Mountains to invest $285m in California homeowners’ insurance MGA

Bermuda-based White Mountains Insurance Group is to invest $285 million to take a majority stake in an MGA focused on the California homeowners’ insurance market.

White Mountains will take approximately 70% of Bamboo Ide8 Insurance Services' outstanding basic shares.

Bamboo was launched in 2018 by insurance veteran John Chu and provides homeowners' insurance for over 100,000 California policyholders, using its technology-enabled underwriting platform to select and manage risk.

White Mountains said Bamboo has grown “profitably and rapidly in the challenging California market” and plans to expand into other states. Chu and the current Bamboo management team will continue to lead the business through its next phase and will retain a significant equity stake.

"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.

The transaction is expected to close in the first quarter of 2024 and is subject to regulatory approvals and other customary closing conditions.

Howden Tiger Capital Markets & Advisory acted as financial advisor to White Mountains, while Cravath, Swaine & Moore provided legal advice.  Evercore Group acted as financial advisor to Bamboo and selling equity holders, while Willkie Farr & Gallagher provided legal advice.