Oxbridge Re Reports Update on Business and Second Quarter 2024 Results

Rhea-AI Summary

Oxbridge Re Holdings (NASDAQ: OXBR) reported its Q2 2024 results, highlighting stable performance with no losses incurred. The company completed a $2.8 million private placement of tokenized securities through its subsidiary, SurancePlus Inc. Key financial metrics include:

- Q2 2024 net loss: $821,000 or $(0.14) per share
- H1 2024 net loss: $1.73 million or $(0.29) per share
- Q2 2024 net premiums earned: $564,000
- H1 2024 net premiums earned: $1.1 million
- Cash and equivalents as of June 30, 2024: $3.98 million

The company's focus on tokenized Real-World Assets (RWAs) and strategic partnership with Zoniqx position it for potential growth in the blockchain-based reinsurance sector.

Positive

• Completion of $2.8 million private placement in tokenized securities
• Strategic partnership with Zoniqx, which has issued over $4 billion in assets on-chain
• No losses incurred in Q2 2024
• Increase in net premiums earned to $564,000 in Q2 2024 from $183,000 in Q2 2023
• Strong balance sheet with no debt

Negative

• Q2 2024 net loss of $821,000 compared to net loss of $85,000 in Q2 2023
• H1 2024 net loss of $1.73 million compared to net profit of $57,000 in H1 2023
• Increase in unrealized losses on other investment and equity securities
• Higher policy and acquisition costs compared to the prior year

Insights

Financial Analyst

Oxbridge Re's Q2 2024 results reveal a mixed financial picture. The company reported a net loss of $821,000 ($0.14 per share) for Q2, compared to a $85,000 loss in Q2 2023. This decline is primarily attributed to negative changes in fair value of equity securities and investments. However, net premiums earned increased significantly to $564,000 from $183,000 year-over-year.

The company's financial ratios show some improvement, with the combined ratio decreasing to 105.7% from 601.6% due to higher premium earnings. This indicates better underwriting performance, although still unprofitable. The completion of the $2.8 million EpsilonCat Re private placement demonstrates progress in their RWA strategy, potentially diversifying revenue streams.

While the loss is concerning, the increased premiums and strategic moves in tokenized securities suggest potential for future growth. Investors should monitor how effectively Oxbridge Re leverages these new opportunities to improve profitability.

Blockchain Technology Expert

Oxbridge Re's venture into tokenized Real-World Assets (RWAs) through SurancePlus Inc. marks a significant step in blockchain adoption within the reinsurance sector. The successful $2.8 million private placement of EpsilonCat Re tokenized securities on the Avalanche blockchain demonstrates market interest in this innovative approach.

The use of blockchain for reinsurance contracts offers potential benefits such as increased transparency, reduced intermediary costs and faster settlement times. The projected 42% annual return for EpsilonCat Re investors (contingent on no losses) is notably high, which could attract more capital to this model.

The partnership with Zoniqx, which has issued over $4 billion in on-chain assets, lends credibility to SurancePlus's blockchain strategy. However, investors should be aware that regulatory challenges and market adoption rates for tokenized securities in reinsurance remain uncertain. The success of this venture will depend on Oxbridge Re's ability to navigate these challenges and capitalize on the technology's potential.

Insurance Industry Analyst

Oxbridge Re's Q2 2024 results highlight both opportunities and challenges in the reinsurance market. The company's 0% loss ratio for the period is positive, indicating effective risk management. However, the high expense ratio of 105.7%, despite improvement from the previous year, suggests operational inefficiencies that need addressing.

The increase in net premiums earned to $1.1 million for H1 2024 from $183,000 in H1 2023 is encouraging, showing growth in the core business. The company's expansion into tokenized reinsurance securities through SurancePlus Inc. could be a differentiator in a competitive market.

The $2.8 million raised for EpsilonCat Re demonstrates investor interest, but the projected 42% return seems ambitious and may carry high risk. Oxbridge Re's strategy of diversifying into RWAs while maintaining its traditional reinsurance business could provide resilience, but execution will be key. Investors should closely monitor the performance of both segments in the coming quarters.

GRAND CAYMAN, Cayman Islands, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Oxbridge Re Holdings Limited (NASDAQ: OXBR), (the “Company”), together with its subsidiaries which is engaged in the business of tokenized Real-World Assets (“RWAs”) initially in the form of tokenized reinsurance securities, and reinsurance solutions to property and casualty insurers in the Gulf Coast region of the United States, reported its results for the three and six months ended June 30, 2024.

“Our stable performance persisted into the second quarter of 2024, with no losses incurred,” stated Jay Madhu, Chairman and Chief Executive Officer of Oxbridge Re Holdings.

“Following Delta CatRe’s targeted 42% payout last year, which was successfully exceeded at 49%, we are pleased to announce the completion of EpsilonCat Re private placement of approximately $2.8 million in tokenized securities within our RWA/Web3-focused subsidiary, SurancePlus Inc. This alternative investment leverages key aspects of blockchain technology to create a well-designed digital security, issued on the Avalanche blockchain,” Mr. Madhu continued. “Provided there are no losses from our reinsurance contracts, investors in EpsilonCat Re tokenized securities can expect an estimated annual return of 42%.

We also recently announced a strategic partnership with Zoniqx, which has issued over $4 billion in assets on-chain to date. SurancePlus is now a well-capitalized business with substantial growth potential for our shareholders. We are proud of this accomplishment and look forward to this exciting new entity diversifying and accelerating our growth in the RWA space in the coming years.”

“Looking ahead, with a strong balance sheet, no debt, and a well-diversified business from our recent transactions, we remain highly confident in our future ability to deliver shareholder value,” concluded Jay Madhu.

Financial Performance

For the three months ended June 30, 2024, the Company generated a net loss of $821,000 or $(0.14) per basic and diluted common share compared to net loss of $85,000 or ($0.01) per basic and diluted common share in the second quarter of 2023. The decrease is due primarily negative change in the fair value of equity securities and other investments during the quarter. For the six months ended June 30, 2024, the Company generated a net loss of $1.73 million or ($0.29) per basic and diluted common share compared to a net profit of $57,000 or $0.01 basic and diluted common share for the six months ended June 30, 2023. The worsened results were primarily due to lower total revenues driven by the increase in unrealized losses on other investment and equity securities.

Net premiums earned for the three months ended June 30, 2024 were $564,000 compared to $183,000 in the same prior year period. For the six months ended June 30, 2024 net premiums earned were $1.1 million compared to $183,000 in the prior year. The increases are primarily due to the prior periods recognizing only one month of premiums because of premium acceleration on the reinsurance contracts in force. In contrast, the quarter and six months ended June 30, 2024, recognized a full three and six months of premiums, respectively.

There were no losses incurred for the three and six months ended June 30, 2024 or 2023.

Total expenses were $628,000 for the three months ended June 30, 2024 compared to $697,000 for the same period in the prior year. For the six months ended June 30, 2024 total expenses were $1.17 million compared to $1.1 million in the prior year. The increase was due to higher policy and acquisition costs when compared to the prior year.

At June 30, 2024, cash and cash equivalents, and restricted cash and cash equivalents were $3.98 million compared to $3.7 million at December 31, 2023.

Financial Ratios

Loss Ratio. The loss ratio, which measures underwriting profitability, is the ratio of losses and loss adjustment expenses incurred to net premiums earned. The loss ratio was 0% for the period ended June 30, 2024 and 2023 due to no loss or loss adjustment expenses in either period.

Acquisition Cost Ratio. The acquisition cost ratio, which measures operational efficiency and compares policy acquisition costs with net premiums earned, increased marginally to 11.0% for the three and six-month periods ended June 30, 2024 from 10.9% for the same period last year.

Expense Ratio. The expense ratio, which measures operating performance, compares policy acquisition costs and general and administrative expenses with net premiums earned. The expense ratio decreased to 105.7% for the six months ended June 30, 2024 from 601.6% in the prior year due to the higher levels of premium earned during the period.

Combined ratio. The combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. The combined ratio decreased to 105.7% for the six months ended June 30, 2023 from 601.6% due to the higher levels of premium earned during the period.

SurancePlus Offering

On July 11, 2024, SurancePlus Inc. (“SurancePlus”), an indirect wholly owned subsidiary of Oxbridge Re Holdings Limited (“Oxbridge”), completed its private placement (the “Private Placement”) of Participation Shares (the “Securities”) represented by digital tokens issued under a 3-year Participation Share Investment Contract (the “PSIC”). On July 11, 2024, SurancePlus entered into subscription agreements with accredited investors and non-U.S. persons in the Private Placement with respect to 287,705 of the Participation Shares represented by the digital tokens, EpsilonCat Re at a purchase price of $10.00 per Participation Share for aggregate gross proceeds of $2,878,048. The Participation Shares are not shares in SurancePlus and shall have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC. The aggregate amount raised in the Private Placement was $2,878,048 for the issuance of 287,804 Participation Shares represented by Digital Tokens of which approximately $1,469,000 was received from third-party investors and approximately $1,409,000 from Oxbridge Re Holdings Limited. Approximately $312,000 and $299,000 of management fees were deducted from the gross proceeds from the third-party investors and Oxbridge Re Holdings Limited, respectively. The tokens were issued on the Avalanche blockchain. Ownership of DeltaCat Re tokenized reinsurance securities indirectly confers fractionalized interests in reinsurance contracts underwritten by Oxbridge Re’s reinsurance subsidiary, Oxbridge Re NS, for the 2024-2025 treaty year.

Conference Call

Management will host a conference call later today to discuss these financial results, followed by a question and-answer session. President and Chief Executive Officer Jay Madhu and Chief Financial Officer Wrendon Timothy will host the call starting at 4:30 p.m. Eastern time. The live presentation can be accessed by dialing the number below or by clicking the webcast link available on the Investor Information section of the company’s website at www.oxbridgere.com.

Date: August 8, 2024
Time: 4.30 p.m. Eastern time
Toll-free number: 877 524-8416
International number: +1 412 902-1028
Passcode (required): 13746518

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact InComm Conferencing at 201 493-6280 or 877 804-2066

A replay of the call will be available by telephone after 4:30 p.m. Eastern time on the same day of the call and via the Investor Information section of Oxbridge’s website at www.oxbridgere.com until August 22nd, 2024.

Toll-free replay number: 877-660-6853
International replay number: +1-201-612-7415
Conference ID: 13746518

About Oxbridge Re Holdings Limited

Oxbridge Re Holdings Limited (NASDAQ: OXBR, OXBRW) (“Oxbridge Re”) is headquartered in the Cayman Islands. The company offers tokenized Real-World Assets (“RWAs”) as tokenized reinsurance securities and reinsurance business solutions to property and casualty insurers, through its wholly owned subsidiaries SurancePlus Inc, Oxbridge Re NS, and Oxbridge Reinsurance Limited.

Insurance businesses in the Gulf Coast region of the United States purchase property and casualty reinsurance through our licensed reinsurers Oxbridge Reinsurance Limited and Oxbridge Re NS.

Our new Web3-focused subsidiary, SurancePlus Inc. (“SurancePlus”), has developed the first “on-chain” reinsurance RWA of its kind to be sponsored by a subsidiary of a publicly traded company. By digitizing interests in reinsurance contracts as on-chain RWAs, SurancePlus has democratized the availability of reinsurance as an alternative investment to both U.S. and non-U.S. investors.

Forward-Looking Statements

This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on 26th March 2024. The occurrence of any of these risks and uncertainties could have a material adverse effect on the Company’s business, financial condition and results of operations. Any forward-looking statements made in this press release speak only as of the date of this press release and, except as required by law, the Company undertakes no obligation to update any forward-looking statement contained in this press release, even if the Company’s expectations or any related events, conditions or circumstances change.

Company Contact:
Oxbridge Re Holdings Limited
Jay Madhu, CEO
345-749-7570
jmadhu@oxbridgere.com

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets
(expressed in thousands of U.S. Dollars, except per share and share amounts)

		At June 30, 2024				At December 31, 2023
		(Unaudited)
Assets
Investments:
Equity securities, at fair value (cost: $1,563 and $1,926)		$	213				680
Cash and cash equivalents			3,594				495
Restricted cash and cash equivalents			391				3,250
Premiums receivable			2,118				977
Other Investments			965				2,478
Loan Receivable			-				100
Due from Related Party			63				63
Deferred policy acquisition costs			240				101
Operating lease right-of-use assets			124				9
Prepayment and other assets			113				96
Property and equipment, net			2				4
Total assets		$	7,823				8,253
Liabilities and Shareholders’ Equity
Notes payable to noteholders			118				118
Notes payable to Epsilon DeltaCat Re Tokenholders			1,239				1,523
Unearned Premium Reserve			2,181				915
Operating lease liabilities			124				9
Accounts payable and other liabilities			374				356
Total liabilities			4,036				2,921
Shareholders’ equity:
Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 6,036,579 and 5,870,234 shares issued and outstanding)			6				6
Additional paid-in capital			32,921				32,740
Accumulated Deficit			(29,140	)			(27,414	)
Total shareholders’ equity			3,787				5,332
Total liabilities and shareholders’ equity		$	7,823				8,253

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(expressed in thousands of U.S. Dollars, except per share amounts)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Revenue
Assumed premiums		$	2,379				2,196				2,379				2,196
Change in unearned premiums reserve			(1,815	)			(2,013	)			(1,266	)			(2,013	)
Net premiums earned			564				183				1,113				183
SurancePlus management fee income			312				300				312				300
Net investment and other income			65				79				126				168
Interest and gain on redemption of loan receivable			-				-				41				-
Unrealized (loss) gain on other investments			(825	)			124				(1,513	)			505
Change in fair value of equity securities			(72	)			5				(160	)			81
Total revenue			44				691				(81	)			1,237
Expenses
Policy acquisition costs and underwriting expenses			62				20				122				20
General and administrative expenses			566				677				1,054				1,081
Total expenses			628				697				1,176				1,101
Income (Loss) before income attributable to noteholders and tokenholders			(584	)			(6	)			(1,257	)			136
Income attributable to noteholders and tokenholders			(237	)			(79	)			(469	)			(79	)
Net (loss) income		$	(821	)			(85	)			(1,726	)			57
(Loss) earnings per share
Basic and Diluted		$	(0.14	)			(0.01	)			(0.29	)			0.01
Weighted-average shares outstanding
Basic and Diluted			6,010,561				5,870,234				6,007,868				5,863,973
Performance ratios to net premiums earned:
Loss ratio			0.0	%			0.0	%			0.0	%			0.0	%
Acquisition cost ratio			11.0	%			10.9	%			11.0	%			10.9	%
Expense ratio			111.3	%			380.9	%			105.7	%			601.6	%
Combined ratio			111.3	%			380.9	%			105.7	%			601.6	%

Attachment

• Oxbridge Re Holdings Limited

FAQ

What was Oxbridge Re's (OXBR) net loss for Q2 2024?

Oxbridge Re (OXBR) reported a net loss of $821,000 or $(0.14) per basic and diluted common share for Q2 2024.

How much did Oxbridge Re (OXBR) raise in its recent private placement?

Oxbridge Re's subsidiary, SurancePlus Inc., completed a private placement of approximately $2.8 million in tokenized securities.

What was Oxbridge Re's (OXBR) net premiums earned for Q2 2024?

Oxbridge Re (OXBR) reported net premiums earned of $564,000 for Q2 2024.

Did Oxbridge Re (OXBR) incur any losses in Q2 2024?

No, Oxbridge Re (OXBR) reported no losses incurred for Q2 2024.

What was Oxbridge Re's (OXBR) cash position as of June 30, 2024?

Oxbridge Re (OXBR) reported cash and cash equivalents, and restricted cash and cash equivalents of $3.98 million as of June 30, 2024.