Bamboo Insurance has acquired certain of the assets of First American Property and Casualty Insurance Agency of Santa Ana, Calif. from parent company title insurer, First American Financial Corp., which is exiting the property/casualty business.
The assets acquired by the insurtech Bamboo include more than $22 million in premium in personal and commercial lines underwritten by third-party carriers. Utah-based managing general agency Bamboo said FAPCIA’s staff will join the company.
Terms of the transaction were not disclosed.
“Today Bamboo begins a new chapter in its growth,” said CEO John Chu. “Adding full-service personal and commercial lines agency capabilities allows us to offer additional products to a much broader set of customers across the continental United States.”
Bamboo Insurance has been offering homeowners, dwelling fire and ancillary products in California. Now with its new agency it will begin offering auto, renters, condominium, commercial lines, and other insurance coverages alongside its existing products across the nation.
First American announced in October 2020 that it intends to exit the property/casualty business and maintain focus on its core business. It expects to complete the transfer its property/casualty policies by the end of the third quarter of 2022.
According to AM Best, which has negative outlooks on the insurer, FAPCC primarily provides homeowners and renters insurance with a geographic concentration in the Western region. The group’s operating results have been on a downward trend due to increased claim frequency and severity, which adds strain to its balance sheet strength. The group reported underwriting losses in 2017 and 2018, driven largely by the unprecedented California wildfire activity, which also caused pressure on its balance sheet strength.
AM Best said the fires losses diminished during 2019, but the group’s operating results remained unfavorable through year-end 2020.
AM Best said its negative outlooks reflect the potential for future loss emergence, loss reserve development and further deterioration in risk-adjusted capitalization. AM Best said it also has concerns relating to the book transfer agreements, their effects on senior leadership, employee turnover and risk management.
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