Company: BBU
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001628280-25-017216
Chunk: 29

Company: Brookfield Business Partners L.P.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 29
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 business needs, and could have an adverse impact on its financial condition, results of operations and prospects.

  26      Brookfield Business Partners  

Our residential mortgage insurer primarily competes with CMHC.

CMHC, a Crown Corporation, may establish pricing terms and business practices that may be influenced by Canadian government policy initiatives such as advancing social housing policy or stabilizing the mortgage lending industry, initiatives which may not be consistent with maximizing return on capital or other profitability measures. In the event that CMHC determines to reduce prices or alter the terms and conditions of its mortgage insurance or other credit enhancement products in furtherance of social or other goals rather than a profit motive, our residential mortgage insurer may be unable to compete effectively, which could have an adverse effect on its financial condition and results of operations.

The Canadian mortgage origination market is highly concentrated, with the five largest mortgage originators providing the majority of the residential mortgage financing in Canada.

High market concentration may expose our residential mortgage insurer to reduced sales or adverse loan selection in the future should a significant lender change the type of loans or level of business that they underwrite with us or terminate or reduce its relationship with us. Additionally, much of our residential mortgage insurer in Canada is concentrated in only four provinces (Ontario, British Columbia, Alberta and Quebec), which increases the vulnerability of our residential mortgage insurer to economic or market downturns, catastrophic events or acts of terrorism in those provinces.

We may not be able to accurately forecast the risks associated with our residential mortgage insurer.

Our residential mortgage insurer is subject to model risk, particularly the risk of error in the design, development, implementation or subsequent use of models. A failure in our modelling could adversely impact our ability to properly evaluate, reserve, price and mitigate risks and the associated losses. If the pricing of our residential mortgage insurer is inadequate, its loss and unearned premiums reserves do not adequately reflect the financial condition of the business, or there are inadequate loss reserves for unexpected market events, results of operations and regulatory capital may be adversely affected. In addition, our residential mortgage insurer may experience increasing loss as the policies continue to age. Sustained material shifts in the emergence of losses on claims could affect timing of revenue recognition, which may adversely affect our residential mortgage insurer’s operations and financial condition.

The majority of the revenues from our healthcare services are derived from private health insurance funds.

The profitability of our healthcare services is influenced by its ability to reach ongoing commercial agreements with private health insurance funds. A failure to reach a satisfactory commercial agreement with any key private health insurance fund