Sutton Specialty Insurance Company and Sutton National Insurance Company, collectively referred to as Sutton National, along with Bamboo Ide8 Insurance Services, LLC, a subsidiary of White Mountains Insurance Group, Ltd, have announced the renewal of Bamboo's reinsurance program.
The renewal includes the issuance of the Greengrove Re Ltd. Series 2025-1 catastrophe bond and the execution of the Greenshoots Re Ltd. Series 2025-1 sidecar transaction.
Greengrove Re Ltd. issued a $100 million catastrophe bond featuring a spread of 7.75%, an initial base expected loss of 1.44%, and an indemnity trigger over a three-year term. The bond is scheduled to mature on April 7, 2028. The offering was upsized by 33% from an initial target of $75 million, with final pricing at the lower end of the initial guidance range of 7.50% to 8.50%.
As part of the catastrophe bond transaction, Sutton National entered into a catastrophe excess of loss reinsurance agreement with Greengrove Re Ltd. The agreement provides reinsurance protection against fire and fire following earthquake events for business underwritten by Bamboo on behalf of Sutton National. The structure allows both companies to access diversified catastrophe risk capacity through capital markets.
In a separate transaction, Greenshoots Re Ltd. issued $70 million in preference shares to support a sidecar structure backed by institutional investors. Through this arrangement, Sutton National entered into a quota share reinsurance contract with Greenshoots Re Ltd, enabling participation in the underwriting performance of Bamboo’s business written on Sutton National paper. The sidecar transaction also adds capital markets-based quota share capacity to the overall reinsurance program.
John Chu (pictured above), CEO of Bamboo, said the additional capacity will support the companies’ efforts to meet insurance needs for California homeowners and represents a recognition of Bamboo’s business model and catastrophe risk management practices.
Throughout 2024, White Mountains' subsidiary, Ark Insurance Holdings Limited, faced substantial catastrophe losses primarily from Hurricanes Milton, Helene, Debby, and Beryl. These events notably affected the company's financial performance.
Ark's combined ratio included 27 points of catastrophe losses in the fourth quarter, mainly due to Hurricanes Milton and Helene. For the full year, catastrophe losses accounted for 13 points, influenced by all four hurricanes mentioned.
In the fourth quarter of 2024, White Mountains reported a net loss of $131 million, contrasting with a profit of $298.5 million in the same period of the previous year. This downturn was largely attributed to the aforementioned catastrophe losses.
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