Q1 2020 Earnings Call

Good afternoon, welcome to Oxford trees first quarter 2020 earnings call. My name is just and I will be your conference. Operator. This afternoon. At this time, all participants will be in listen only mode.

Joining us for today's presentation, its Oxbridge Reis, Chairman, President and Chief Executive Officer, Jay Matthew and Chief Financial Officer in corporate Secretary Wrendon Timothy.

Following their remarks, we will open up the call for your question.

I would like to remind everyone. This call is also being broadcast via live webcast and available via webcast replay until June 13th 2020, any investor information section of the oximetry website at Www Dot Oxbridge read Dot com.

Now I'd like to turn the call ever to rent and Timothy Chief Financial Officer box Brightree will provide the necessary cautions regarding forward looking statements that will be made by management during this call.

Sir Please proceed.

Thank you operator during today's call there would be forward looking statements made regarding future events included <unk> future financial performance.

These forward looking statements I mean, do you want to the private Securities Litigation Reform 1995.

It's such a bunch of speed estimates expects intends plans projects I'll just some low words, an expression intended to 65 forward looking statement.

I wouldn't consider <unk> I'm not going to use a future results I'm condition, but rather are subject to be rest risks and uncertainties. Some of these risks.

Do you identified in the company's filings with the FCC the occurrence of any of these risks and uncertainties gonna hobby much yet.

On the company's business financial condition results of operations.

Any forward looking statements made on this conference call speak one of the all the detail discuss what's cool and except as required by law. The company undertakes no obligation to update any forward looking statements compete on this call when any company presentation, even though the companys expectations and you related events conditions, what circumstances change in.

Additionally, on March 11, Twentytwenty, there would have organization correct right Olbrich <unk> 19 of the global pandemic.

Well in a much 24 20 Twond just went to the cumin I haven't government responded on implemented cookie restrictions to control the spread of school with 19 in response, we temporarily closed the offices.

Employees to work from home on talks with them.

No I would like to under <unk>, Chairman, President and CEO Jay Jay.

Your Rhonda and welcome everyone. Thank you for joining us today.

Let me express hearing out 2019 urine conference call. We continued to experience was severely challenged what the cool with my team and Duck our key goals. During this challenging times is to ensure the health and safety our people our community.

It's also important to note, there's no reinsurance or underwriting implications for Oxbridge, resulting called endemic we have suffered unrealized losses on our our investment portfolio due to the depressed capital markets. However, our equity security investments generate income an amazing the long term view.

As we do each quarter before we get into our results I would like to take a moment to provide a brief overview our company Oximetry Holdings limited was founded over six years ago with the mission provide reinsurance solutions, primarily to property and casualty reinsurers Oh pardon insurers in the Gulf Coast reagent off the United States through a license reinsurance.

She theory offices reinsurance limited a license reinsurance sidecar Oxfords Riyadh, that's right fully collateralized policies to cover property losses from some specific catastrophes.

And so if you already know because we write fully collateralized contracts, we are able to compete effectively with large carriers.

We specialize in underwriting low frequency higher price of Yardi risks, where we believe sufficient data access to efficiency analyze that risk return profile for reinsurance contracts. Our objective is to achieve long term growth in book value per share by writing business not selective opportunistic basis, that's a generator.

Active underwriting profits relative to risk.

Regarding our investment portfolio, we remain opportunistic and we're deploying our capital with favorable return opportunities arise, which we believe in turn to drive our disastrous supplemental investment income that being said our focus on top priority remains our profitable underwriting.

Looking at the first quarter of 2020, we experienced increased net loss due to do wholly for the unrealized write down a fair value equity securities our investment portfolio.

Doesn't this unrealized loss our operational performance was stronger in the quarter than the prior years first quarter.

Book value stands at $1.34 per share and as I stated our risk management underwriting focus is I will be on affected by cold with Nike endemic.

In addition, we continue to make progress in the secondary operation our wholly owned subsidiary Oxfords, We got us our old arc reinsurance sidecar, which.

This contract year ends up in my book ends at the end of this mark.

Our investors are still on track to one of attractive return of approximately 36%.

We will look to grow that portion of our business again this upcoming season, beginning June one twentytwenty.

I'll now turn the call over to random to take us real financial results for the first quarter up 2020 rendered thank usually first to point to know what is what typically contributions from June wants to me city systems fallen yeah.

Got the net premiums earned net premiums written for the quarter ended March 31, Twentytwenty with 264000 compete to nail into first quarter last year. The increased this year, who will lead you to the previous salary should not remember condition you to fool them in losses being in crude on all four regions contracts during the last.

Yes, it was quite so when compared to the normally recognition of premiums this year.

Net investment income for the fourth quarter of Twentytwenty, It too close to <unk> with <unk> 6000, net realized gains offset by $326 on realized the Cline interfere body equity securities into Swissquote of Twentytwenty, which is compared with 63000 net investment income refill.

Net realized gains on 50 once all the increase in fair value equity securities in the same period last year as gene mentioned that she ended this year is due to the depressed Cup talking about gets created by the Kuvin Nike bundling.

Let's spend just for the Swissquote off Twentytwenty include in loss and loss adjustment expenses policy acquisition cost underwriting expenses and general and administrative expenses were 255000, compared with 264000 into fourth quarter 219.

Increased expenses was due to an increase in policy acquisition cost and underwriting expenses, partially offset by if one of the decrease in general and admin expenses are the result of course, Steven initiatives, we have implemented.

Net income we generated a net loss of 364th old most people would be at the undiluted share for the fourth quarter of Twentytwenty compared with a net loss of 147000, what's the recent well be assia into Swissquote. Those 2019, the larger net loss. This year is what did you to the unrealized production.

And just give us a whole securities.

No turned into a final services for the three month ended March 31, Twentytwenty, we used to be this measure to analyze the gruesome profitability a whole business operations for reinsurance business measure underwriting profitability by examining all those loss ratio acquisition expense ratio underwriting expense ratio at combined ratio.

I was lost ratio, which measures on the record profitability is unreasonable for losses than most of just some expenses incurred a net premiums and.

Well those reshuffle the swissquote those twentytwenty. It was your person to see him as last year, there will no longer or loss adjustment expenses in the quarter.

Oh acquisition cost ratio, which measures operational deficiency, yes policy acquisition cost of the underwriting expenses to net premiums earned.

<unk> acquisition cost ratio was 11% for this was caught off twentytwenty computer midyear, but since last year. The increase was due to no acquisition costs include into first quarter 219.

Oh expense ratio, which measures operating performance computes policy acquisition costs other underwriting expenses general and admin expenses within the.

<unk> expense ratio was 104.2% for the Swissquote. Those Twentytwenty competed with no last year last year deal with no premium spoon into first quarter.

I will combine ratio, which is used to measure on the right to performance is the some of the loss ratio on the expense ratio.

The combined ratio is at or above 100% underwriting is not profitable. The combined we should total one of 4.2% for this with what the off Twentytwenty compared to zero percent last year again in last years fourth quarter when no one net premiums.

I will turn into the balance sheet total investment which include investments in equity Securities totaled 900 in seven to do so at the much study for Twentytwenty compared with 600 on my to do so.

He's done, but if with what you might be increase is due to the net which is of equity securities during the first quarter.

I must studies with Twentytwenty cash and cash equivalents unrestricted cash and cash equivalents totaled 7.4 million compared with 8 million at December 31st want to 19 total shareholders equity as much but.

His deep.

I realized losses on equity securities due to the depressed financial markets as much the toughest twentytwenty, our current book value per shifted out to $1.54 cents, nobody that I'd like to turn the call back over to GE GE.

Thank you Randy the first quarter included less than one month operating under covert Nike and certainly we are operating in a much different business environment. However, I'm pleased to report it has not affected our operations and I look forward to keeping your appraisal for progress and these coming much through our reinsurance sidecar, we have been able to out a degree of diversity to our.

Revenue stream and risk, which would still have while still having the ability to achieve attractive returns.

As mentioned before one of the contractor ends at May 31st Twentytwenty, I kinda investors aren't cracker Barnett attractive return of approximately 36%.

We will look to grow that portion of our business again. This upcoming season, beginning June one off this year going forward, we remain optimistic about the long term prospects if not only our core business, but also our reinsurance sidecar, we continue to evaluate additional opportunities for growth as well as diversification off risk.

So in closing I will continue to rebound, we continue to reduce art unit costs.

Current restaurants are tractor trailer on an attractive return our book value per share as $1.34, which is mostly in cash we got that free we have a solid balance sheet on a strong cash position, but most importantly, the supports out the opportunity combined with box a Bible business model would that we are ready to open the call.

Oh for questions operator, please provide the appropriate instructions.

Thank you ladies and gentlemen, if you have a question or comment in a star one on your telephone keypad at this time it a star one for any questions or comments, well pause just a moment to assemble the roster.

Well go first to <unk> inculcate at capital Securities.

Hi, Jay rent in a couple of questions markets rallied back a little bit what about how you see in your equity portfolio.

Oh, yeah, the equity portfolio is up again.

We're opportunistic show from time to time be do we do Oh, we do get in and out of things but.

That's always been a small portion off where we are these are probably times. We are on the reinsurance business. So on insurance business I should say as well.

So we are careful bunch up what opportunistic <unk>.

<unk>.

HM.

Right or the <unk> 360000 dollar loss or whatever it may be unrealized loss <unk> have you realize that war has narrowed a war.

Where do you stand or you can comment on that.

I I. Unfortunately, it kind of comment about can sorry, okay. That's kept Oh of course, you didn't regards to your marketing to sidecar How's that how's Oxbridge doing in regards to you know marketing side car.

To.

Basically no there was I get involved in it.

Yes, so the the side car eyes as always is open to anybody who wants to invest in it but the key over there they need to be accredited investors send us quite a bit up.

Okay, why she that'd be due to make sure that they stand there.

They're in good standing with whatever the requirements are but Oh, we are marketing towards the sidecar be pandemic on the financial markets I put a little bit of a crimp on that but nonetheless, we.

We are moving forward, but we have we have a <unk>. We have some funds that have already been allocated towards that problem from other investors. So we're moving forward.

And we have a very short window for anybody else that happen for us to get in on it.

Okay can you comment how much oxbridge itself is gonna be putting towards all contracts since your.

We're sticking to the sidecar.

Yeah, we typically we typically see we typically say that we would invest in any given youre closer to 50% by certain years. We've we've we've reached stock and maybe have exceeded that just slightly on a certain years such as you can probably look at some of our financials, we put very little to work. So we haven't.

We haven't rounded up this year at this point or with new contracts, but.

Based on everything we will take a very off we will take a very.

Conservative outlook.

Okay. Thank you.

Thank you Pat.

One more reminder, I was star one if you had a question or comment.

And with no other questions holding all the time to conference back to management for any additional my closing comments.

Thank you and joining us for today's call before we wrap up I want to thank our employees business partners and investors for their continued support I, especially want to express my gratitude to the Oxbridge team costs continue to leverage has significant experience to build our business. During these challenging times is that.

Dedication and expertise I, just got us to these days and we look forward to updating you on next call. If you have any further questions. Please give us a call anytime.

Thank you again for your time and attention today on your interest in Oxbridge operator.

Before we conclude today's call I'd like to remind everyone that a recording of the conference will be available for replay via link available in Investor section of the company's website.

Thank you for joining us today for our presentation you may now disconnect.

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