WHITE MOUNTAINS INSURANCE GROUP LTD

The Bamboo segment consists of Bamboo Holdings, Bamboo MGA and Bamboo Captive. On January 2, 2024, White Mountains acquired a controlling interest in Bamboo (the “Bamboo Transaction”). See Note 2 — “Significant Transactions” on page F-19.

Bamboo is a capital-light, tech- and data-enabled insurance distribution platform providing homeowners’ insurance and related products to the residential property market in California. Bamboo operates primarily through Bamboo MGA, its full-service MGA business, where the company manages all aspects of the placement process on behalf of its fronting and reinsurance carrier partners (“Capacity Providers”), including product development, marketing, underwriting, policy issuance and claims oversight, and it earns commissions based on the volume and profitability of the insurance that it places. Bamboo MGA offers both admitted and non-admitted products. Under its existing capacity agreements for the treaty year ending April 1, 2025, Bamboo MGA’s commission levels are based on a sliding scale tied primarily to its attritional loss ratio. Bamboo also operates two separate but integrated businesses: (i) a retail agency, within Bamboo MGA, offering ancillary products (e.g., flood, earthquake) on behalf of third parties and (ii) Bamboo Captive, a U.S.-domiciled captive reinsurer that participates in the underwriting risk of Bamboo’s MGA programs to align interests with Capacity Providers. During the fourth quarter of 2024, Bamboo Captive redomiciled from Bermuda to Arizona and changed its name from Ide8 Limited to Ide8 Re Inc.

As of December 31, 2024, White Mountains reported $585 million of total assets and $417 million of total equity related to Bamboo. As of December 31, 2024, White Mountains owned 72.8% of the basic units outstanding of Bamboo (63.7% on a fully-diluted/fully-converted basis, taking account of management’s equity incentives) and reported $114 million of noncontrolling interests related to Bamboo.

Marketing and Distribution

Bamboo is an MGA and program administrator with delegated binding authorities, and as such, is generally dependent on its Capacity Providers to bear the insurance risk on the programs designed and underwritten by Bamboo. Bamboo currently relies on a small group of Capacity Providers for a large proportion of its business.

For the years ended December 31, 2024 and 2023, Bamboo placed substantially all of its business with one fronting carrier partner. Bamboo anticipates several new fronting relationships commencing in 2025.

For the year ended December 31, 2024, the insurance risk for Bamboo’s programs was supported by over fifteen third-party Capacity Providers, with the top two of these providers representing approximately 28% of Bamboo’s managed premiums. For the year ended December 31, 2023, the insurance risk for Bamboo’s programs was supported by seven third-party Capacity Providers, with the top two of these providers representing approximately 45% of Bamboo’s managed premiums.

Bamboo primarily relies on third-party agents and brokers as its sales channel. Substantially all of Bamboo’s products are distributed through third-party agents and brokers who have the principal relationships with policyholders. Agents and brokers generally own the “renewal rights,” and thus Bamboo’s business model is dependent on its relationships with, and the success of, the agents and brokers with whom Bamboo does business. For the years ended December 31, 2024 and 2023, the top three relationships accounted for 41% and 47% of managed premiums.

The amounts related to the year ended December 31, 2023 are prior to White Mountains’s ownership of Bamboo. White Mountains believes this information is useful in understanding the overall growth in Bamboo’s premium base.

Competition

Bamboo operates in a highly competitive property and casualty insurance intermediary industry. Competitors are differentiated based on price, conditions of coverage, loss ratio performance, quality of service, technology and other factors. Bamboo’s primary competitors are typically traditional homeowners insurance carriers and their agents.

Managed Premiums

Managed premiums represent the total premiums placed by Bamboo during the period. The following table presents Bamboo’s managed premiums for the years ended December 31, 2024, 2023 and 2022, which includes periods prior to White Mountains’s ownership of Bamboo. White Mountains believes this information is useful in understanding the overall growth in Bamboo’s premium base.