Q2 2023 Oxbridge Re Holdings Limited Earnings Call

Uh huh.

Uh huh.

[music].

Okay.

Well sites on hold we appreciate your patience and please continue to standby.

Oh, okay.

Mhm.

Hum.

[music].

Uh huh.

[music].

Oh.

[music].

To all sites on hold we appreciate your patience and please continue to standby.

[music].

Got it.

[music].

Got it.

[music].

Hum.

[music].

Yeah.

Good afternoon, welcome to Oxbridge Re's second quarter 'twenty twenty-three earnings call. My name is Chloe and I will 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's, Chairman, President and Chief Executive Officer, Jay Madhu, and Chief Financial Officer, and corporate Secretary rendered Timothy.

Following their remarks, we will open up the call for your questions I would like to remind everyone. This call is also being broadcast live via webcast and available via webcast replay until August 28, 2023 on the Investor information.

Section of Oxbridge Reis website at Www Dot Oxbridge re dot com.

Now I would like to turn the call over to render and 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.

Thank you operator during today's call there 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.

1995.

Words, such as anticipates estimates expects intends plans projects 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 uncertainties.

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

Actual results.

Differ materially from such forward looking statements included in this section entitled Risk factors contained in our Form 10-K filed on March 2023, and our Form 10-Q filed to deal with the Securities and Exchange Commission.

The occurrence of any of these risks I don't know if we can.

These could have adverse effect on the company's business financial condition and the politics of the CFO .

Good cause significant market price and trading volume fluctuations for securities.

Any forward looking statements made on this conference call speak only as of the date of this conference call and except as.

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 change no I would like to turn the call Hooper Chairman, President and Chief Executive Officer, Jim Baidu G.

Thank you Brenda 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.

<unk> 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. The United States. We are very proud to be celebrating our 10th anniversary this year.

Through our licensed reinsurance subsidiary Oxbridge reinsurance limited and our licensed reinsurance SPV or special purpose vehicle, Oxford, we write fully collateralized policies to cover property losses from specific catastrophes.

Because we write fully collateralized contracts, we believe 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 reinsurance contracts. Our objective is to achieve long term growth and book value per share by writing business on a selective and opportunistic basis that will generate attractive underwriting profits relative to risk.

We diversified our business in 2021 being the lead sponsor of Oxbridge acquisition.

Special purpose acquisition company respect focusing on investing in disruptive technologies subsequent to the second quarter on August 10, 2023, Oxford acquisition completed its business combination with jet AI jet AI developed software leveraging artificial intelligence and offers fractional aircraft ownership, Jeff Carr aircraft.

Brokerage and charter so its fleet of private aircraft. It goes up its operating partner.

Jack AI operates along two segments software in aviation. The software segment features the beat to see charter GPT.

AI operator platform the charter GPT App uses natural language processing and machine learning to improve private booking experience that yet.

Operator platform offers a suite of stand alone software products to enable FAA part 130 charters provider charter providers to add revenue maximize efficiency and reduce environmental impact.

The aviation segment features jet aircraft fractions jet cards, our fleet charter management and buyers brokerage Jets AI also recently announced the launch of diner flight, our carbon offset transaction platform build for both commercial and private aviation operators.

Platform enables aviation businesses to offset their carbon emissions for the purchase of carbon removal of credits that fund that the direct extraction of carbon dioxide from the atmosphere.

We also further diversified our business with the creation of a new <unk> III focused subsidiary <unk> plus Inc. The company offers an alternative investment opportunity leveraging key insights and qualities of blockchain technology to create a well designed digital security under SEC guidelines that have complete transparency and compliance during the second.

Quarter, <unk> completed a private placement offering of security tokens, which assuming no losses are expected to generate a potential return of approximately 42% a year. This new trust as an entry at the wet three of digital securities market, which puts a hole, which puts real world assets on the blockchain and opens an entirely new app.

And you of democratizing reinsurance at potentially other opportunities in the future.

<unk> plus is now a brand new well capitalized business are growth opportunities for our shareholders and to reiterate this new opportunity was created without any debt and no equity dilution.

Very proud business accomplishments I look for this exciting new entity to diversify and accelerate our growth prospects in the years ahead.

We are very pleased about both these new investments I look forward to keeping you appraised of the progress in the coming quarters regarding our investment portfolio, we remain opportunistic and will deploy our capital at favorable return opportunities arise that can 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 pardon me highly optimistic about the prospects of our core reinsurance business.

Two new investments and Jeff AI as well as shorts, plus I'll now turn things over to Randy to take us through our financial results.

Thank you Jay I would like to remind you.

That our typical contract period is from June one to may 31st of the following year.

Net premiums earned for the quarter ended June 30 of 2023 were 183000 slightly to 101 94000 in last year's second quarter for the first six months of 2023 net premiums earned were 183000 down from 404.

Same period last year. The decrease is due to the number and size of reinsurance contracts enforced during the period.

There have been no losses to date.

Incurred in 2023 or 2020 two.

Investment income and other income rules in the quarter to under four six months of 2023 due to higher rights or money market funds. We generated 505000 unrealized gain in the first half of 2023 do you do you feel about it.

Our equity investment in the Oxford acquisition Corp.

We also recognize AED 1000 positive change in the fair value for equity securities other than this year 2020 through much improved from the 340 to negative change in the prior year.

All of these factors taken together resulted in total revenue of 693.

And three months ended June 30 of 2023 compared to 503000.

The prior year second quarter for the first six months of 2023 total revenue was $1 2 million compared to $5 $5 a foot.

Same period last year.

With lift from it doesn't include any loss in lots of different expenses policy acquisition cost and general and admin expenses were up in the second quarter and the first six months. After a 23 compared to last year due primarily to inflation cost fluctuations increased with no cost.

Without the recognition of all of the one time operating costs related the shrunk often at the second quarter.

Primarily due to the onetime GNL for a close in the second quarter, we generated a net loss of 85000 or one cents per share compared to net income of 77000, no one cents per share in last year's second quarter for the six months ended June 32023, net profit was 57000 compared to a net loss of three general five cents a share.

Same period last year.

The improvement this year was due to higher revenue driven by the increase in R&D.

Gains on investments equity Securities and management fee income from insurance, both warfarin that more than offset increased to want them to get out of admin expenses associated with Shaw took offerings and increased personnel costs.

Have you discussed following the close we use various measures to analyze briefing book with the ability of our business operations for our reinsurance business, we measure underwriting profitability by somebody in our loss ratio acquisition ratio expense ratio and combined ratio loss ratio, which measures underwriting profitability is the ratio of loss and loss adjustment expenses incurred in the Bronx.

With no loss and loss adjustment expenses in either 2022, and two the loss ratio was zero for central.

Oh acquisition cost ratio, which measures operational efficiency compares.

The acquisition cost the net premiums earned the acquisition ratio remained consistent at approximately 10, 9% for the three uptick from a pretty good ended June 2023, compared to the same period in the prior year.

The expense ratio, which measures operating performance compares policy acquisition costs in general.

Administrative expenses with net premiums the expense ratio for the three month period ended June <unk>.

You put your 2023 includes increasing to 11, 3% to three basis points nine that's all.

For the six months ended June 30 of 2023 from 191, 1% to 61, 6% when compared with prior periods increases due to inflationary expense fluctuations increase with no cost as well as the recognition during the second quarter was 22 and three if all of them do what they are offering costs associated with the completion of the issuance supposed to get off of it.

Oh combined ratio, which is used to measure underwriting performance is the sum of the loss ratio expense ratio combined ratio with three months period ended June two.

<unk> 23 increased to 11, 3% to 32, 9%.

Six months ended June 30, or 20, 383 from 191, 1% to 61, 6% when compared to the prior year periods again, the increases due to inflationary expense for fusions increase without of course as well as recognition during the second quarter wont be ones that most of the costs associated with the completion of the Charlotte cluster Oakland offering.

Turning to the balance sheet, our investment portfolio increased to 83 increased to 723000 at June 32, and three from 642.

Largely due to gains experienced so far this year the investment increase due to the positive change in the fair value for interest in bulk Foods acquisition Corp.

Gotcha, that's unrestricted cash and cash equivalents decreased to $2 5 million odd that you had compared what you put in England and at December 31st.

2022, total shareholders' equity at quarter end increased to 51 1 million or two five makes sense book, how much yeah, no I'd like it to Nicole's battle, but the G.

GAAP up before we take your questions. Thank.

Thank you Brendan as you May know in January this year, we incorporate insurance plus a wholly owned subsidiary Oxbridge re <unk> will issue <unk> securities that directly represent factual ISENTRESS and reinsurance contracts underwritten by our reinsurance subsidiary.

Holders receive a return on the performance of these underlying reinsurance contracts as mentioned during the second quarter. We were pleased to have completed the first offering these tokens with up to $4 million private placement offering.

Assuming there are no casualty losses.

Reinsured by Oxbridge token investors are expected to receive a significant return of approximately 42% <unk>.

<unk> plus will democratize access to reinsurance of the alternative investment opportunity that leverages. The key qualities of blockchain technology to create a well designed digital security.

Our tokens will enable more investors to participate and have their interests permanently at transparently recorded at a watching these opportunities where typically unavailable to investors in the past you to a high barrier to entry.

Following this exciting opportunity in late February we utilize our investment of a special purpose acquisition Company, Oxford acquisition Corp to embark in a business combination, which at AI jet AI developed software leveraging artificial intelligence and offers fractional aircraft ownership jet card aircraft brokerage at charter towards fleet, a private aircraft and those.

If it's operating partner.

Jetblue operates a lot two segments software and aviation our wholly owned subsidiary Oxbridge reinsurance limited as a lead investor in the spec sponsor holds one 5 million shares at $3 5 million private warrants, we beneficially own us in this back we are pleased to report the completion of the business combination with jet token.

August attempt.

These exciting new investment opportunities further diversify our business and risk profile.

Positioning us to capitalize on growth in emerging technologies. We are very excited about the future value of these investments and the potential that rate to our shareholders.

So in closing our book value per share at quarter end is $2 63 per share.

Business is well diversified our investment in short swaps positions us in a new leading edge wet three focused technology business.

<unk> plus was created without any debt and no equity dilution or.

Our investment in Oxford acquisition, Slash jet AI and artificial intelligence aviation business is on track we remain debt free we have a strong balance sheet and more importantly, we have real opportunity based on a viable business model that is based on diversification.

We remain opportunistic not only in our core business, but also our broader view of the market.

With that we are ready to open the call for questions. Operator, please provide the appropriate instructions.

Okay.

Thank you Sir.

This time, if you would like to ask a question. Please press the star and one on your telephone keypad.

You may withdraw yourself from the queue at any time by pressing star two.

And once again for your question study Star and one will pause a moment to allow any questions to queue.

Yeah.

Okay.

And we'll move first to Kent Engelke with Capitol Securities Management. Your line is open.

Hey, Joe Hey, Randy and I, just wanted to say congratulations in regards to getting all of the accomplishments of the first six months of this year a lot of hard work looking forward to all of this becoming a profitable and really start increasing the value of oxbridge. So congratulations on all your successes there.

Thank you I appreciate it.

Yeah.

It's not been an easy road.

[laughter] for sure we've had a lot of offline conversations and.

Again, it's great. How are you guys moving forward and look forward to seeing how this all unfolds in the intermediate future.

Excellent. Thank you again I appreciate it thanks Scott.

Okay.

Yeah.

And once more that is star one we'll pause another moment.

Okay.

Yes.

Okay.

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.

Yeah.

Thank you for joining us on today's call I just have one quick correction on my script I mentioned the book value.

Incorrectly the book value is $2 59 sets it was correct on Redmond statements.

So 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 our gratitude to our Oxbridge team, who continue to leverage the 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 us anytime. Thank you again for your time and attention today and your interest in Oxbridge operator.

Yes.

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.

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

[music].

Hum.

[music].

Hello.

Oh.

[music].

Yes.

[music].

Hum.

Oh.

[music].

Yes.

Okay.

Okay.

[music].