Oxbridge Re Holdings Limited Q1 2023 Earnings Call

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Ladies and gentlemen, thank you for standing by the program will start in just a few moments once again, thank you for standing by.

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Good afternoon, and welcome to Oxbridge Re's first quarter 2023 earnings call My.

My name is Miller and I will be your conference operator this afternoon.

At this time all participants are in a listen only mode.

Joining us for today's presentation is Oxbridge Re's, Chairman, President and Chief Executive Officer, Jay Madhu.

And Chief Financial Officer, and corporate Secretary Rondon Timothy.

Following their remarks, we will open up 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.

On the Investor Relations section of the Oxbridge re website at Www Dot Oxbridge re dotcom.

Now I would like to turn the floor over to Rhonda Timothy Chief Financial Officer of Oxbridge re.

Who will provide the necessary cautions regarding the forward looking statements.

Will be made by management during this call. Thank you Ron Dan you may begin.

Thank you referred to during this call today will be forward looking statements made regarding future events, including <unk> future financial performance. These forward looking statements are made pursuant to the private Securities Litigation Reform Act of 1995.

Words, such as anticipates estimates expects intends plans projects and other similar to what the next questions.

Intended to signify forward looking statements for the compute meant are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties.

A discussion of risks and uncertainties that could cause actual results differ.

Differ materially from such forward looking statements.

And in the section entitled Risk factors in our Form 10-K filed on March two 2023.

Oh, a Form 10-Q filed to deal with the Securities and Exchange Commission. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business financial condition and.

The CFO linens, which into income caused significant market price and trading volume fluctuation both securities any 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.

On this call or in any company presentation, even if the company's expectations or any related events conditions or circumstances shifts now I'd like to turn the call over to chairman President and Chief Executive Officer J J. Thank.

Thank you Brendon and welcome everyone. Thank you for joining us today before we start I would like to take a moment to provide a brief overview of our company.

Auctions re holdings limited was founded 10 years ago with a mission to provide reinsurance solutions, primarily to property and casualty insurers in the Gulf Coast region of the United States. We are very proud to be celebrating our 10th anniversary this year throw.

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

So Peter I fully collateralized contracts, we believe we can compete efficiently with large carriers, we specialize in underwriting low frequency high severity risks, where we believe sufficient data access to effectively analyze the risk return profile of reinsurance contracts. Our objective is to achieve long term growth and book value per share by writing business on a cell.

Elective and opportunistic opportunistic basis that will generate attractive underwriting profits relative to risk.

We diversified our business in 2021 by being it by being the lead sponsor of Oxbridge acquisition for a special purpose acquisition company or spec focusing on investing in disruptive technologies. During the first quarter of 2023, Oxbridge acquisitions announced its intention to form a business combination with Jetstar AI, Inc.

The company developed software and offers fractional aircraft ownership jet card aircraft brokerage and charter towards fleet, a private aircraft and those of its operating partner jet.

AI operates along two segments software in aviation. The software segment features our B to C charter GPT App and the B to B Jetstar AI, operator, operator platform.

GPT App uses natural language processing and machine learning to improve the private jet booking experience. The jackup AI operator platform offers a suite of Standalone software products to enable FAA part 135 charter providers to add revenue maximize efficiency and reduce environmental impact the aviation sector.

It features jet aircraft fractions jet cards, Oxy charter management and buyers brokerage that transaction is expected to close at the end of the second quarter of this year, our SEC pending SEC oxide shareholder approval.

We also further diversified our business with the creation of our new <unk> subsidiary Assurance Plus Inc. The company offers an alternative investment opportunity leveraging key qualities of blockchain technology to create a well designed digital security under SEC guidelines.

I have complete transparency at the appliance showrooms plus commenced an offering of secured I spoken switch assuming no losses are expected to generally a potential return of approximately 42% a year.

This new thrust is an entry into the wet three and digital security market, which puts real world assets on the blockchain and opens up an entirely new Avenue of democratizing reinsurance and potentially other opportunities in the future.

We are very excited about both of these new opportunities and look forward to keeping you appraised of their progress in the upcoming quarters.

Regarding our investment portfolio, we remain opportunistic and will deploy our capital the favorable return opportunities arise that could contribute to the growth of capital and surplus and our licensed reinsurance subsidiaries overtime.

Over the long term, we remain highly opportunistic about the prospects of our core reinsurance business and the two investments I commented on earlier and Oxbridge acquisitions as well as shorts plus about trying things over to Randy I'll take us through our financial results.

Thank you Jay I would like to remind you that a typical a reinsurance contract period is from June one to may 31st of the Poland Yeah.

With regard to net premiums earned in the pre owned for the quarter ended March. If you went to the 23 were nil compared to 210000 than the last year's first quarter. The decrease was due to the acceleration of premium recognition until for reinsurance contracts during 2022 arising from the limited loss of water from.

From the Hurricane.

Impact.

There have been no redrawn premiums recorded in this quarter, the apples there'll be no losses to be incurred in 2023.

We've got the investment income our net investment income and other income rose in the quarter to 89000 from 23000 due to higher rates on money market funds. We generated a solid three do you want that was unrelated to gain in the fourth quarter of 2023.

Yeah by the change in our equity investment in pumps, which acquisition Corp.

Last year's first quarter. This change resulted in a 200000.

Unrealized loss.

It's a recognized a 76000.

Positive change in the fair value for equity Securities as of March 31, 23, and much improved from the negative change in the prior year.

First quarter all of these factors taken together resulted in total revenues of 546000 for the three months ended March 31, two and three compared to nil in the prior year's first quarter.

With regard to total expenses total expenses.

Margin in the fourth quarter.

Of 2023 to 404000 from children to see what that was in last year.

On the policy acquisition cost of underwriting expenses in the quarter due to the acceleration of premium recognition under the resulted in acceleration of course the acquisition of course, an additional general and admin expenses are higher in 2023 due to increased personnel costs and inflationary cost pressures.

Due to due primarily to the positive change in the fair value for equity Securities and other investments in the quarter. We generated net income of 142000 or two tenths of a share for the three months ended much to do we're going to have three compared to a net loss of 387000 or so.

In the last year first quarter.

As we have discussed before new investor calls.

Ruth measures.

The growth of profitable CFO of business for our reinsurance business, we measure underwriting profitability by examining all.

The loss ratio acquisition ratio expense ratio and the language show.

Our loss ratio, which measures underwriting.

Profitability is the ratio of losses and loss adjustment expenses and putting up with me.

Losses or loss adjustment expenses and either with Cosmo.

2023 or 2022 loss ratio low throughput.

Well positioned cost ratio, which measures operational efficiency compares policy acquisition costs and that's real soon likewise with no premiums earned in the first quarter of 2023.

The ratio was zero percent compared to 11% in the prior year while.

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

As a result of no premiums in 2023 of expense ratio of zero percent in the first quarter compared to 171, 9% a different course of 2022 Oh.

The combined ratio, which is used to measure underwriting performance is the sum of the loss ratio the expense ratio with no premiums written in the fourth quarter, the combined ratio of zero percent compared to 171% in last year's fourth quarter.

Now turning to the balance sheet.

Portfolio increased to 718000 as much to do you want to like 23.

Another bright and largely due to COVID-19 during the quarter, our investments increased marginally due to the positive change in the fair value investments.

Which acquisition called cash and cash equivalents unrestricted cash and cash equivalents decreased to $3 6 million at March 31, two or three computers at one 9 million at December .

Turning to total shareholders' equity at quarter end increased to $15 2 million or approximately $2 and 59.

Since book, how much you know other turn the call back over to Jean to wrap up before we take your questions.

Yeah.

Thank you Brendan as we discussed on our year end conference call in late January we announced the incorporation of assurance plus a wholly owned subsidiary of Oxbridge re <unk> will issue a token I securities that that indirectly represent fractional life's interests in reinsurance contracts underwritten by our reinsurance subsidiary.

Gary.

Token holders will receive a return on the performance of these underlying reinsurance contracts in essence, sharp's possible democratize access to reinsurance as an alternative investment opportunity that leverages the key qualities of blockchain technology.

Create to create a well designed digital security.

Our tokens will enable more investors to participate and have their interests permanently transparently recorded all the chain.

These opportunities were typically on.

I'm available to investors in the past you to high barriers to entry.

Following this exciting investment opportunity in late February .

We utilized.

Utilized Oxford acquisition Corp to embark on a business combination with <unk>, Inc. A company offering fractional aircraft ownership jet card aircraft brokerage at charter service through its fleet of private aircraft. Our wholly owned subsidiary Oxbridge reinsurance limited as a lead investor in our spec sponsor holds one 5 million shares.

Which at the closing of transactions will have a value of approximately $14 $2 million not including the value of $3 1 million private warrants be beneficially owned and this back.

This exciting new investment opportunities further diversify our business and risk portfolio positioning us to capitalize on growth in emerging technologies. We are very excited about the future value of these investments have the potential they bring to our shareholders. So in closing our book value per share at quarter end is $2 56 sector pardon me $2 15.

<unk> that's for sure our business is well diversified our investment insurance possible just positions us in a new leading edge web three technology business.

Investment in Oxbridge acquisition Slash jet Dot AI artificial intelligence aviation business is on track we remain debt free we have strong balance sheet with a solid cash position and most importantly, we have opportunity based on a viable business model that is based on diversification, we remain opportunistic not only in our core business.

But also a broader view of the market with that we're ready to open the call to.

We are open up our call for questions operator, please provide the appropriate instructions.

Thank you Sir we.

We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate that your line is no question Kim.

You May press star two if he would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for questions.

Okay.

Thank you.

Our first question comes from.

With capital Securities. Please proceed with your question.

Hey, Jack Hey, Ryan a couple of questions come to mind right now Ali I guess, the first and foremost on the assurance plus.

The two trying to increase the potential value. There you have a lot of things going on you've ever considered the possibility of maybe spinning something out to to recognize that value of that is there and secondly in regards to on this back.

Where we are on the on the voting others back itself I would think that once that.

That Burger is closed there should be a very large release of potential value at least on the balance sheet based on accounting rules and the like.

Where you price your stock is it looks like Theres a lot of value based upon you know things that are that are already in place.

Hi, Scott Yeah, I'll take your second question first and the answer to that is yes, we.

We don't realize.

A full mark to market value on the on the.

The investment of the spike at the moment, but once that's closed.

That will normalize so that will be that will be that there will be a that will be an uptick in and recognition.

So we're looking forward to that.

We hope that.

I actually just yesterday the SEC actually she comments went in yesterday and filed with the SEC in the second round of comments. The first round of comments, rather Ah if all goes well we expect this to close by the end of Q2 of this year. So everything looks on track and we're good to go there.

In relation to your first question, how do we monetize shorts plus that will that will be a work in progress, but what we have done is we have developed a web three we have developed a wet three company in Torrance and internally. We don't go out that there was no dilution, we don't raise capital raise cash we developed it all in house.

So shareholders have all 100% of that company at the moment as we go forward.

And it will definitely be board, a board approval et cetera, but that's definitely an opportunity to maybe do something much bigger, but once we go forward with <unk> plus and we issue the ox.

The reinsurance tokens.

Definitely opportunity to go raise funds I'd do various different other tokens off the like as well.

So absolutely we're very excited.

A lot of opportunity a lot of potential.

Following you all for a long time and it looks like we're finally on the cusp of doing something.

Yes, yes. This has been an extremely busy year extremely busy last year.

But now where we're almost there looking forward to it.

Look forward to the upcoming conference calls.

Thank you Kent.

As a reminder, if you would like to ask a question. It is star one on your telephone keypad.

At this time. This concludes our question and answer session I would now like to turn the call back over to Mr. Mcgill for closing.

Marks.

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 continuing support.

I, especially want to express our gratitude to the Oxbridge team will continue to leverage our significant experience to manage and build our business. During these challenging times, we look forward to updating you on our next call and if you have any further questions. Please contact me anytime thank.

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

Thank you.

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 Companys website until May 26 2023.

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

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