Q2 2020 Oxbridge Re Holdings Ltd Earnings Call

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Good afternoon.

Oxbridge <unk> second quarter 2020 earnings My name is Melinda and I will do you work conference operator at this afternoon.

Time, all participants will be in listen only mode.

Joining us for today's pre presentation is Oxford freeze chairman, President and Chief Executive Officer J Mac.

And Chief Financial Officer, and corporate Secretary rent.

Okay.

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

I would like to remind everyone that this call is being broadcast live via webcast and available via webcast replay Intel.

2020.

On the Investor information section of the Oxbridge free website at Www Dot Oxbridge <unk> Dot com.

Now I would like to turn the call Overture, Brendan Timothy Chief Financial Officer at Oxbridge, Reed, who 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 wouldn't be forward looking statements made we got in future events, including <unk> future financial performance.

These forward looking statements made puts you into the private Securities Litigation Reform Act of 1995 with such a bunch of speeds estimates expects intends plans projects and other some though would then expressions I intended to signify forward looking statements forward looking statements are not guarantees of future results.

Conditions, but rather a subject to various risks and uncertainties. So all these risks and uncertainties identified in the company's filing with the FCC.

The occurrence of any of these risks and uncertainties could hardly material adverse effect on the company's business financial condition unresolved corporations any forward looking statements made on this conference call to speak one of the other deals of this conference call.

Except as required by law the company undertakes no obligation to update any forward looking statements come to you know this call when any company presentation, even the companys expectations for any related events conditions. Once it comes out this change.

In addition on March 11, Twentytwenty the World Health organization threats are right outbreak of Qubits 19 of the global fund that make the disruption of global commercial activities across all of course or market sectors and the significant declines in volatility.

In financial markets are the results of the Kuvin 19 pandemic could result in an immaterial impact on our financial position with those operations and cash flows possibly fast for me include but are not limited to uncertainties with respect to current and future losses reduction that interest rates equity market volatility.

I'm going business I'm financial market impacts of <unk> economic Duncan the insurance industry is likely to experience much your losses, resulting from Goldman 19, which will reduce that would be the book Upto. How do we expect will help to 15, the up what price and friend for reinsurers that we'll see an across the many lines of business before coordinating however, the ultimate.

But garden business in force as well as risks and potential opportunities and future business remains highly uncertain no I would like to turn the call over to what chairman President and Chief Executive Officer, GE might do Jade.

Thank you Brenda and welcome everyone. Thank you for joining us today over the last six months, we experienced a was severely challenged by the covert 19 pandemic. Our key goal. During this challenging times is to ensure the health and safety up our employees and our community.

And then make however has not adversely affected our business at this time, we are monitoring our markets on the ensuring that insurance industry in general and I look forward to keeping a posted on our progress during these difficult times.

We have to use however to return to normal business operations after months of disruption while operations and business remained stable as you. All worked remotely. It is good to get October offices, and continue the collegial work environment and cultural performance. We have developed over the years should things change in the future we will reward <unk> good work tomorrow working.

Remote lead to ensure the well being of heart team.

As we do each quarter before we get to why results I would like to take a moment to provide a brief overview of our company Oximetry Holdings limited was founded over six years ago, where the mission to provide reinsurance solutions, primarily the property and casualty insurance in the Gulf Coast region of the United States.

So I licensed reinsurance subsidiary oxygen reinsurance limited under license reinsurance sidecar Oxbridge re N.S., we write fully collateralized policies to cover property losses from specific catastrophes.

Some of you already know because we write fully collateralized contracts, we are able to compete effectively with larger carriers.

We specialize in underwriting low frequency high severity risks rabid leaves sufficient data access to effectively analyzed at risk return profile of reinsurance contracts.

<unk> objective is to achieve long term growth and book value per share by writing business on a selective an opportunistic basis that we that will generate attractive underwriting profits relative to risk.

Regarding our investment portfolio remain opportunistic and we'll deploy our capital whenever a favorable return opportunities arise, which we believe will in turn drama results to supplement the investment income that being said our focus on top priority remains profitable underwriting.

Turning to our results, we're glad to report and improved performance. This in the second quarter I first six months up twentytwenty compared to the prior year.

Revenues were up primarily to an increase in net premiums earned an investment gauge.

Combined with our initiatives to reduce operating costs, we generated solid net income.

The quarter compared to a loss in last year's second quarter and significantly reduce a loss to the six months ended June thirtyth.

Our key financial ratios also strengthened compared to 29 team.

In addition, we continued to make progress in the third you're off operations up a wholly owned subsidiary Oxbridge Riyadh S I reinsurance sidecar.

The contract <unk> ended May 31, Twentytwenty sidecar investors aren't attractive return of approximately 36%.

I'll now turn things over to rent to take us through a financial is us rented.

Thank you Jay.

As you point to know what do the typical contract period is from June one to me city first of all linear.

Net premiums written for the three months ended June did you have to Twentytwenty increased to 135000 from mainstreet those in the prior year for for the six month of 22 and didn't net premiums written increased to 400, though.

Thank you Jamie Feldman that price increases the due to any one month premium being recognized through the first six months them to prior year other results of previous accelerated premium recognition when compared to normal premium recognition in twentytwenty.

Net investment income for the second quarter of 20 to 20 to.

25000, coupled with net realized gains of 320, <unk> and two so no change in fair value equity Securities. This compares with 64th old enough net investment income for the brophy that coupled with a decrease in fair value of equity Securities a fortune. So.

For the six month ended June did you have to Twentytwenty net investment income totaled 57000, coupled with you engine and 26 those net net realized gains in a decrease in for your body of equity Securities of 324000. This compares with net investment income of 120000 come coupled with 3000 enough Mitra.

Ladies gains and 3000, increasing for your body of equity securities from the prior period.

<unk> expenses include in North and most of your some expenses policy acquisition cost and general and admin expenses remained stable in the second quarter 297000, compared with 200 make yourself in second quarter, two and the 19.

For the six month ended June to June 2020. It was the expenses was slightly higher what flights to win T 2000, compared to 554000 last year. The increased attributed to higher policy acquisition cost will lead you to the normal recognition of policy acquisition costs. During the current period, when compared with new recognition in the prior.

<unk> due to the previous so there's no such course oneself and limit losses on reinsurance contracts.

Under the hunt for the first six months of 20 to 20 Ginnie cost we would use the fivetwenty those influenced by 44000 last year. The decrease in general and admin expenses was the result for the cost saving initiatives.

The higher revenue and reduce expenses, we generated net income of 100 and try though the luxury centsper share in the second quarter of 20 to 20 much improved from the lower for longer than five so.

The fourth and she ended second quarter 219.

For the six month ended June video Twentytwenty over net loss was much improved to one they can make cells and don't from 361000 in 29.

Tuned into a financial issues, we generated solid improvement across the board for the three and six months ended June put your 20 to 20, usually this measure on the led the growth and profitability a full business operations for reinsurance business, we measure underwriting profitability by examining our luxury show acquisition ratio.

The main we show a luxury issue, which measures on underwriting profitability is the real losses and loss adjustment expenses includes an appeal.

Well loss ratio for the second quarter on for six months of 20 to 21 zero percent. The same as last year. There were no loss well look to Justin expenses in either.

Well acquisition cost ratio, which measures operational efficiency competed policy acquisition costs and other underwriting expenses <unk> premium soon.

Acquisition cost was 11.1% an 11% for the second what the absolute six month of Twentytwenty, respectively compared to 10.8% for the same period last year. The increase was due to marginally higher weighted average acquisition cost one reinsurance contracts and fourth this year compared to last year away.

Munchery show, which measures up or we can book Woman's computers policy acquisition cost and general and admin expenses wouldn't that brooms. Good the expense ratio improved into second quarter on food six month of 20 to 20% to 220% and a 142% respectively compared to 311% and 500 on the Dublin.

If I wondered on 95.7% for the same periods last year.

The improvement to you to do you.

General and admin expenses this year and they had been nobody needs a net premiums earned did in twentytwenty when compared with its imputed into engineering.

Well combined we should use the measure performance, which is the some of the loss ratio Ondecks venture show the combined ratio for the three and six month period ended June did your twentytwenty, with 220% and 142%, respectively compared to 311.8% and 500 amounting to 5.7% into into making.

The improvement is due again to the had you know many to net premiums written and reduced <unk> expenses in Twentytwenty computer with the <unk>.

Note that into the balance sheet.

Total investments, which include investments in equity securities totaling 900, and putting so much when pitch. It went to 20 computed centered on 92000 at December 31st I did mention increases due to the purchase of equity securities during the current yeah.

At June Thirtyth, when it went discussion cash equivalents unrestricted cash and cash equivalent to those 7 billion compared with 8 million at December 31st going to maybe.

With a shareholder equity adjusted your Twentytwenty was 7.9 million compared to 8 million.

But for the first went to 19.

<unk> Foods, you had to Twentytwenty old book value per shift stood at $1.57 cents noted that I'd like to turn the quote about who but the Jay Jay.

[noise] It appears we've lost Mr. Matthew.

It looks like he styling right back in.

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Ladies and gentlemen, Mr., Matt has rejoined did he will pick up [laughter].

[laughter], yes, sorry about that thank you Randy.

Through our reinsurance sidecar, we've been able to out a degree of diversity to our revenue streams.

And risk was so having the ability to achieve attractive returns.

As mentioned before we're very pleased where their returns generated for the contract you're ending may 31st Twentytwenty, where our sidecar investors on an attractive return of 36%, we look to grow that portion of our business going forward over the long term, we remain optimistic about the prospects or not only our core business, but.

Also I reinsurance sidecar, we continue to evaluate additional opportunities for growth as well as diversification of risk. So in closing we continue to reduce our DNA costs I try and buy starts have another attractive return of 36%.

Thank you for share is $1.37 and mostly in cash we had that creep we have a strong balance sheet with a strong cash position and most importantly, we have real opportunity for growth and a Bible business model would that we're ready to open for calls for questions. Operator, please provide the appropriate instructions.

Thank you Sir the floor is now open for your questions. If you do have a question. Please press Star then one on your telephone keypad to join the queue. If you're using speakerphone. Please pick up your handset to provide the best sound quality again, ladies and gentlemen, if you do have a question or comment at this time. Please press star one on your telephone keypad.

And it looks like our first question comes from 10 angle key West Capital Security Management. Please go ahead.

Hey, Jay Rendina any impact from the store and I came up the coast last week.

Yeah, Hi, count. Thank you for that yeah, no I just as off now we don't have any anything to report on that obviously things can developed by the but all indications are it's a it's not an issue.

Oh, it's something I heard Brendan say I want to make sure understood. The her this correctly, which I think it's great for reinsurance you say four or if you're seeing greater problem pricing flexibility just because of everything that's taking place on reinsurance contracts I heard that correctly did I not.

Yes, Yes, you did well we've seen we've seen some price improvement.

But again hopefully.

Yeah. This continues but well we'll see how it all goes.

Oh, Hey, Hey, congratulations on the quarter nobody can hopefully this the start of the trend.

[laughter].

Yeah.

Ladies and gentlemen, if you would like to signal first question. Please press star one at this time.

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[noise] and at this time, we had no further sick.

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I'll turn the call back over to Mr. met him for his closing remarks.

Thank you all for being on the call. We appreciate your patience and considerations.

We look forward to updating you asked me as we move forward. Thank you.

Before we conclude today's call I'd like to remind everyone that a recording of today's call will be available for replay via a link available in the Investor section of the company's website. Thank you for joining us today for our presentation you may now disconnect.

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