Bamboo Insurance Partners with MS Transverse to Expand California Coverage
Bamboo Insurance has announced a strategic partnership with MS Transverse Insurance Company, aiming to expand homeowners and dwelling fire insurance capacity by approximately $150 million in California. Focusing on high-demand areas such as Los Angeles, San Diego, and San Francisco, this initiative addresses the limited availability in the admitted market, often pushing policyholders toward surplus lines coverage. Effective from July 17, 2026, this expansion will be offered statewide through Bamboo's existing agent and partner channels.
The announcement aligns with significant market changes following the implementation of California Insurance Commissioner Ricardo Lara's Sustainable Insurance Strategy. Completed in December 2024, these reforms allow admitted insurers to include forward-looking catastrophe models and reinsurance costs in their rate filings, in exchange for increasing coverage in wildfire-prone regions. As a result, the California FAIR Plan, designed as a last-resort property insurance option, witnessed a substantial enrollment spike due to insurer non-renewals. The Department of Insurance reported a moderation in the FAIR Plan's residential policy growth to about 2.4% in Q1 2026, attributed to the return of admitted market alternatives.
Several insurers, including Farmers, Mercury, and CSAA, have committed to expanding their California homeowners' insurance policies following these reforms. Mercury plans to add over 38,000 new policies. Notably, MS Transverse, rated A+ by AM Best, emerged as the largest hybrid fronting insurer in the U.S. by gross written premium in 2024, highlighting its market strength.
The new policy options from Bamboo and MS Transverse include higher deductible tiers and mandatory water damage sublimits, along with claim-free discounts that increase over time. Bamboo Insurance CEO John Chu highlighted that the partnership allows for competitive pricing and disciplined underwriting to ensure sustainable market operations, focusing on carrier relationships and precise risk assessment to tackle affordability and capacity challenges.
Bamboo's Greenshoots Re sidecar currently supports four fronting carriers, with approximately $175 million in collateralized capacity. This aligns with the industry's trend towards utilizing third-party capital to facilitate growth in challenging markets. According to Guy Carpenter, entities like MGAs, MGUs, and capital-light platforms represent substantial growth areas for sidecars as of 2026. EY reported an increase in P&C sidecar capital to around $19.6 billion in 2025, signifying a year-over-year rise of about 40%. Furthermore, AM Best data indicated a 14.9% growth in premiums managed by U.S. MGAs and delegated underwriting authorities to $81.4 billion in 2023, continuing to grow by 15% in 2024.
This expanded capacity offers additional admitted-market options for clients previously reliant on surplus lines or the FAIR Plan, particularly for high-value properties in wildfire-prone areas. The sustainability of this increase will depend on the ongoing execution of the Sustainable Insurance Strategy and the availability of capital funding platforms like Bamboo, particularly as reinsurance pricing trends ease.