Q4 2020 Oxbridge Re Holdings Ltd Earnings Call

Once again, please continue to hold on your conference will begin in about five minutes. Please continue to hold.

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Okay.

Good afternoon, welcome to the Oxbridge re <unk> fourth quarter and year end 2020 earnings call. My name is John and I'll be your conference. Operator. This afternoon at this time, all participants will be in a listen only mode.

Joining us for today's presentation is Oxbridge re <unk>, Chairman, President and Chief Executive Officer, Jay Madhu.

And Chief Financial Officer, and corporate Secretary Brendan Timothy.

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

I would like to remind everyone that this call is also being broadcast live via webcast and available via webcast replay until Wednesday March 32022 on Investor.

Information section of the Oxbridge re website at Www Dot Oxbridge re dot com.

Now I would like to turn the call over to random Timothy Chief Financial Officer of Oxbridge re who will provide the necessary cautions regarding the forward looking statements that will be made by management. During this call. Sir. Please go ahead.

Thank you operator.

During today's call there will be forward looking statements made regarding future events.

Oxbridge re Ns future financial performance.

These forward looking statements are made pursuant to the private Securities Litigation Reform Act of 1995.

Would this have on CCP its estimates expects intends plans projects and other similar words and expressions.

Intended to signify forward looking statements.

For the <unk> guidance.

Future results and conditions, but rather are subject to various risks.

Within Ts.

These risks and uncertainties identified in the company's filings with the SEC.

The current of any of these risks and uncertainties that have a material adverse effect on the company's business.

Natural condition on our results of operations.

Forward looking statements made on this conference call speak only as of the date of this conference call.

As required by law.

The company undertakes no obligation to update any forward looking statements contained on this call or in any company presentation, even if the company's expectations or any related events conditions or circumstances changes.

In addition on March 11, 2020, other who's had organization.

Correct right.

With 19 other global pandemic.

The disruption of global commercial activities across all market sectors on the significant declines on volatility in financial markets. As a result of the COVID-19 pandemic could result in a material adverse impact on our financial condition results of operations cash flow possible effects may include but are not limited to on food.

With respect to current and future losses reduction on interest rates equity market volatility.

On the <unk> business on financial market impacts on economics Duncan.

The insurance industry is likely to experience material losses resulted from COVID-19, which will reduce available capital and we expect will continue to sustain the upward price trend for reinsurers that we will see in across many lines of business before COVID-19, However, the ultimate impact on current business in force.

Other risks and potential opportunities on future business remains highly uncertain.

Now I'd like to turn the call over to Chairman, President and Chief Executive Officer, Jim on D. G.

Thank you Brenda and welcome everyone. Thank you for joining us today.

It's been a full year since COVID-19 pandemic began affecting so many lives and businesses around the world. Our goal over the posture was to ensure the health and safety up on employees and our community and to ensure the resilience of the continuation of our business.

Fortunately the pandemic has little or no impact on our business. However, we continue to monitor the markets on the insurance industry in general to ensure we continue to derive value to our shareholders as.

As we do each quarter before we get into our results I would like to take a moment to provide a brief overview of our company, Oxford re holding some of that was filed it over seven years ago with a mission to provide reinsurance solutions, primarily to property and casualty insurers in the Gulf Coast region of the United States.

Through our licensed reinsurance subsidiary Oxbridge reinsurance limited on our licensed reinsurance sidecar Oxbridge re Ns as we write fully collateralized policies to cover property losses from specific catastrophes.

And as some of you already know because we are rightfully collateralized contracts, we can compete effectively with large carriers.

We specialize in underwriting low frequency high severity risks, where we believe sufficient data exists to efficiently analyze the risk return profile of our reinsurance contracts.

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

Regarding our investment portfolio, we remain opportunistic on we'll deploy our capital on favorable return on return opportunities arise, which we believe will in turn drive our results through supplemental investment income our focus on top priority remains on profitable underwriting.

We also generated a significant increase in net income for the fourth quarter of the year building momentum as we enter 2021.

In addition, we continue to make progress on our reinsurance sidecar Oxbridge re NFS Brook for contract year ended May 31, 2020, our sidecar investors earn an attractive return of approximately 36%. So far this year, we are on track to deliver our investors on our series 2020 Dash one participant.

Dissipating notes ending may 31st on 2021 with projected returns between 24% to 40% on.

Now I'll turn it over to Brendan I would take us through our financial results revenue.

Thank you Jay.

To remind you that typical contract period is from June one to meet cities of the flow of India.

Net premiums earned for the year ended December 31, 2020 increased to 93000 from 617000 in the prior year.

The increase is due primarily to only seven months of premium being recognized in the prior year as a result.

GBS accelerated premium recognition when compared to normal premium recognition during 2020.

Fourth quarter net premiums earned increased marginally to 247245 sales in the last year.

Net investment on other income in 2022 total 102000 compared to two good yourselves from last year net.

Realized gains of 375 to 274000 was significantly higher than three sales in the last year, but will we experience.

On 55000 decline in share value of equity Securities in 2020 income in the fourth quarter compared to EBITDA.

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In 2019 total.

<unk> expenses included a loss on loss adjustment expenses policy acquisition costs as well as general and admin expenses in 2020 will consistent with the price at approximately $1 1 billion.

The reduction in G&A costs. During 2020 was partially offset by an increase in policy acquisition costs on underwriting expenses during the year.

The higher revenues are stable expenses, we generated a significantly reduced net loss in 2020 of only 50000 zone from 300 unpriced sales into price.

As Jim mentioned net income in the fourth quarter decreased significantly to 181 zone.

<unk> per share from only 61000 or one cents per share in the fourth quarter of 2019.

As discussed before we use various measures to analyze the growth and profitability of our business operations for our reinsurance business, we measure underwriting profitability re examined and on loss ratio acquisition expense ratio.

On combined ratio or loss ratio, which measures underwriting profitability is the ratio of losses on Los Angeles and expenses incurred to net premiums earned.

Loss ratios for both 2020 on 2019 was zero.

There were no loss or loss adjustment expenses in either yes.

Our acquisition cost ratio, which measures operational efficiency.

Policy acquisition cost and net premiums.

Our acquisition cost ratio was 10, 9% from 11% from the.

Fourth quarter and year ended December 31, 2020, respectively from ph.

Namely 410, 4% for the same per unit in the price.

<unk> in 2020 with due to marginally higher weighted average acquisition costs on the reinsurance contracts that will in force.

Yes.

Our expense ratio, which measures operating performance compares policy acquisition costs on general and admin expenses with net premiums.

The expense ratio for the fourth quarter on year ended December 31st 2020, 117% on a 126, 41% respectively from.

<unk>, 115% on the one <unk>.

One 2% from the same periods in the prior year.

The significant decrease in 2020 was due primarily to a higher denominator.

As reported in 2020 with compared between 2019.

Combined ratio, which is used to measure underwriting performance is the sum of the loss ratio on the expense ratio.

Combined ratio for the three months and year ended December 31st 2020 were 117% from 126, 21% respectively.

Compared to 115, 1% on a 183, 3% for the same periods in 2019.

The improvement in 2020 is due to a higher denominator in net premiums earned and reduced total expenses in 2020 compared with the prior year.

No it's going into the balance sheet total investments, which represent investments in equity securities to total 787000 at December 31st 2020 up from 692000.

December 31st 2019 day.

Increases due to the purchase of equity securities during the year.

Have you said listen equals 2020 cash on cash equivalent unrestricted cash and cash equivalents totaled $7 5 million, which is stable with $8 million at December 31 2019.

Total shareholders' equity at December 30 <unk>.

2020 was $8 million consistent with the prior year and notes on the call back over to GE to re up before we take any of your questions.

Thank you Rhonda.

Through our reinsurance sidecar, we've been able to add a degree of diversity to our revenue stream on risk.

Still having the ability to achieve attractive returns, we're very pleased with our current generated from the contract year ending may 31 2020.

Like our investors arent on attractive return of 36%. So far this year investors on our series 2020 participating notes are on track to achieve our projected return of between 24% to 40% 24% to 40%.

Looking ahead, we remain opportunistic about the long term prospects of both our core business on our reinsurance sidecar, we continue to evaluate additional opportunities for growth as well as diversification of high risk profile. So in closing G&A costs have been reduced on our relatively stable at these levels.

Current investors continued to earn an attractive return our shareholder equity is mostly in cash.

Net freight we have strong balance sheet with a solid cash position on most importantly, we have real opportunity for growth based on a stable and viable business model with that we're ready to open the call for questions. Operator, please provide the appropriate instructions.

Thank you ladies and gentlemen, the floor is open for questions. If you have any questions or comments. Please press star one on your Touchtone phone at this time pressing star two will remove you from the queue should your question to be answered and lastly on posing your question. Please pickup your handset if listening on speaker phone to provide optimal sound quality.

Okay and your first question is coming from Kent Engelke from Capitol Securities.

Your line is live. Thank you good afternoon, there Jay and random house.

Marketing for the 2021 CCAR coming along.

Hey, Ken it's coming along fine I'll tell you.

These last few years have been very strange because.

We've had various different forces on various different things go wrong not only in the financial markets, but also due to the pandemic right, but the financial markets on looking at things slightly differently, but we are very pleased with how returns are coming through on happening.

The body, who is an accredited investor can can take part in this thing.

So we're pleased with the way things are going so far.

But again, we're always opportunistic in what we do we don't take risk at any.

Just because there is an opportunity for a return.

Calculated risk so I suppose.

Okay.

Short answer to ensure a to your question, it's going well.

I appreciate it thank you.

Thanks, Ken.

Thank you.

Once again, if there are any remaining questions or comments. Please indicate so now by pressing star one.

Yes.

Okay. There are no questions in queue at this time.

This concludes our question and answer session I would now like to turn the call back over to Mr. Madhu for his closing remarks.

Thank you for joining us on 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 our Oxbridge team will continue to leverage the significant experience to manage and build our business. During these challenging times, it's their dedication and expertise that will take us through these days and we look forward to updating you on our next call dropped any further questions. Please feel free to give me a call anytime.

Thank you again for your time and attention today on your interest in Oxford <unk> operator.

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