Oxbridge Re Holdings Limited

Q2 2024 Earnings Conference Call

8/8/2024

spk01: Your entry is confirmed.
spk00: At any time during playback, you will pound to go to the... Welcome to Oxford Tree's second quarter 2024 earnings call. My name is the conference operator this afternoon. At this time, we'll be in listen-only mode. Joining us for today's presentation is Oxford Tree. and Chief Executive Officer, Jay Madhu, and Chief Financer and Corporate Secretary, Richard Simmons. Following this call, we will open up the call for your... This call will replay to 2020. Information such as the Oxbridge Free website at www.oxbridgefree.com. Now, I would like to call over to Rendon. Financial Officer... who will provide the necessary caution regarding the forms that will be made during today's call.
spk01: Thank you. During today's call, there will be forward-looking statements made regarding including financial performance. These forward-looking statements are made pursuant to the private security litigation reform act of 1995. So when the state estimates, expects, intends, plans, projects, and other similar rules and expressions, they are intended to signify firm-looking statements. Firm-looking statements are not guarantees of future results and conditions, but rather subject to various risks and incidences. cause actual results and events to differ materially from fellow constituents is included in the section entitled Risk Factors, contained in our Form 10-K file on March 26, 2024, and our Form 10-K file today with its 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 volatility of our earnings, which in turn can cause significant market price and trading volumes of patients for more securities. as of the date of this conference call. Except, as required by law, the company undertakes no obligation to update any further commitments containing this call or any additional presentation, even the company's expectations or any related events, conditions, or circumstances change. Now, I'd like to turn the call over to Chairman President and Chief Executive Officer, Jim Epstein. Jim? Thank you, Brendan, and welcome, everyone. Thank you for joining us today. Let me start by saying we are proud of the significant steps we have taken in the last year to fortify and diversify our business. This remains reassuring. write fully collateralized policies to cover property losses from specific catastrophes. And because we write fully collateralized contracts, we believe we can compete efficiently with large carriers. We specialize in underwriting low-frequency, high-severe risk, where we believe sufficient data exists to efficiently analyze the risk-return profile of reinsurance contracts. Our objective is to achieve long-term growth in book value per share by writing business on a selective and opportunistic basis that will generate attractive underwriting profits relative to risk. Building on the Sustainable Reinsurance Foundation, we began to diversify our business in 2021 as a lead sponsor of Oxford's Acquisition Corp., a special purpose acquisition company, or STAC, focusing on investing in disruptive technologies. In August of 2023, Oxbridge Acquisition successfully completed its business combination with Jet AI Inc. The company developed software and offers fractional aircraft ownership, jet card aircraft brokerage, and chartered through its fleet of private aircraft and those of its operating partners. It operates in two segments, software and aviation. The software segment features the B2B chartered GP and the B2B chartered operator. The CharterGPT app uses natural language processing and machine learning to improve the private jet booking experience. The GetA offers a suite of standalone software products such as Reroute and DynaFlight to enable FAA Part 135 charter providers to add revenue, maximize efficiency, and reduce environmental impact. The aviation segment features jet aircraft fractionalization, on-fleet charter, management, and buyer's brokerage. With the completion of the business combination in August of 2023, the company began trading on the NASDAQ stock exchange. Our interest in JetAI is recognized at fair value in other investments on our balance sheet. In 2022, we expanded our business portfolio by establishing Shorts Plus, Inc. Our new subsidiary focused on Web3 technology. InsurancePlus specializes in democratizing tokenized real-world assets, or RWAs, offering tokenized reinsurance securities as alternative investment opportunities. These securities leverage blockchain technology to ensure complete transparency and compliance with SEC guidelines, representing a significant advancement in the digital security market. Consequently, this initiative aims to broaden investor participation, extending opportunities beyond what traditionally has been a select group of ultra-high net worth individuals. Crucially, the establishment of Assurance Plus was achieved without incurring new debt or diluting equity for our shareholders, reflecting our effective approach to diversification. We are enthusiastic about the prospects of these new investments and remain committed to keeping our stakeholders informed of their progress in the forthcoming quarters. Looking ahead, we intend to position Oxbridge as a prominent player in the real-world asset or RWA-led three sector. Further details on the strategic direction will be shared later in the call. In summary, we maintain a strong sense of optimism regarding the long-term outlook of our core reinsurance business along the successful integration of Assurance Plus as we embrace the RWA market more comprehensively. I'll now turn things over to Brendan to take us through our financial results. Thank you, Jay. I'd like to remind you that our typical content is going to be the first of the following year. With respect to net premiums earned, net premiums earned for the quarter end of June to the year 2024 were $534,000 compared to $183,000 in last year's second quarter. For the first six months of 2024, net premiums earned was $1.1 million, $183,000 in the same period last year. The increases are due to the price of the one because of the 2023 treaty We recognize the first six months of premiums. There have been no losses to be incurred in 2024. We got an investment income or not investment income. Another income decrease in the quarter in the first six months in 2024 due to less cash being held in our money map. That's 1.5 million on our other investment. or re-measurement of our investment in JSA. 60,000 negative change in the fair value of our equity securities as of June 30, 2024, decreasing from a 1,000 positive change in the prior year. All of these factors taken together for the three months and the for the second quarter. For the six months of 2024, total revenue was 81,000 negative compared to 1.23 million for the same period of loss. Expenses including loss and loss adjustment expenses, policy accruals, and general and It's a higher policy acquisition cost incurred during the six-month period. From our income, we see some negative change in the fair value of equity, securities, and investments in the second quarter, which generated a net loss intense per share. The net loss of 85,000 per share in last year's second quarter. For the four or six months, we see the net loss in the same period last year. The result this year was due to the lower revenue driven by the increase in unreal and real higher premium management fee income. As we have discussed in front of the U.S. Mayor of our business operations. For reinsurance business, you measure underwriting profitability by examining our loss ratio, acquisition ratio, expense ratio, and combined ratio. Our loss ratio, which measures underwriting profitability, is suggesting expenses in the year 2014. Our acquisition cost ratio, which measures operational efficiency, the net premiums end. The acquisition ratio increased marginally to 1% for the six-month period ended June 30, 2024, compared to 10.8% in the same period last year. The expense ratio was upgraded to 1.5% in January and next month's premiums end. The expense ratio for the three-month period ended June 30, 2024, decreased from 2.5% 111.3%, and for the six months under June 30th, 2024, from 61.6% to 1.6% when compared to prior periods. These increases were due to higher premium levels recognized in the three and six-month periods under June 30th, 2024. Our combined ratio, which is used to measure is the sum of the loss ratio and the expense ratio. The combined ratio for the three-and-a-half-year and the two-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty-and-thirty of the COF equity securities and the decrease in the fair value equity securities during the quarter. Other investments decreased significantly from $2.4 million to $9.65 million due to the fair value change in our investment in JetAI, in which the company has an equity investment measured at fair value. Thank you, Brendan. As highlighted earlier, we have some measures to fortify and diversify our operations. In this year's 2012 class, our colleagues where the security is represented by a reinsurance subsidiary. We successfully completed the initial offering of the security tokens to Delta Factory. This was a large blockchain. Furthermore, as previously reported, investors in Delta Factory received returns exceeding $49, surpassing the projection. by Hurricane Adalia, which made landfall as a county in 2020. We believe these are the first tokenized reinsurance securities backed by a publicly traded company. This is a choice to democratize access to insurance as an alternative investment avenue. The advantages of blockchain technology to create sophisticated digital securities. Our tokens aim to facilitate broader investor participation, ensuring their interests are securely and transparently recorded on the blockchain. It is previously out of the reach of many investors due to the extreme barrier to it. We will try innovative approach. Essentially, we have a democratized system. In mid-2023, our investment in a special program Oxbridge Acquisition, quote, culminated in a business... ...services, aircraft brokerage, and charter services, facilitated by a suite of private aircraft. Concurrently, with the business merger, the company successfully listed its common shares and... Additionally, Oxbridge Weak Holdings has initiated a strategic review process, performing a special... a range of strategic alternatives to the company and its Web 3.0 division subsidiary, Insurance Plus Holdings Limited. This process may include a sales, spin-out, merger, diversification, or strategic transaction with a public independent company. In recent developments, shares have a management of over 287,000 participating shares, represented by a digital token, Epsilon Capri. Participation Share Investment Contract, raising approximately $2.9 million. The Epsilon Cash Reef Participation Shares, represented by digital tokens, issued on the Avalanche blockchain had a targeted return of 42%. This follows the success of last year's token, Delta Cash Reef, which, while getting a 42% return, paid out a remarkable 49% return, surpassing initial projections. Recently, Assurance Plus announced a strategic partnership with Zonics, a pioneer in digital asset management, which has issued over $4 billion in assets on-chain to date. This strategic partnership is set to further expand our footprint. The collaboration aims to enhance W tokenization and Web3 capabilities. Assurance Plus is well-positioned with substantial growth potential for our shareholders. We are proud of this accomplishment and look forward to this new exciting entity and accelerating our growth in the RWS space in the coming years. These compelling opportunities not only augment our business, but also enhance our profile and risk profile, strategically positioning us in growth with an emerging pace. We are especially enthusiastic about the anticipated value of these investments hold and the benefits they offer to our shareholders. We are currently in the process of rebranding Oxfords with an RWA Web 3 focused company, leveraging the this year. Forecast suggests an extraordinary expansion of the tokenized RWA market over the next decade with estimates exceeding $10 trillion. The first week, they have secured $47 million funding led by BlackRock to expand RWA tokenization. This growth trajectory is fueled by the escalating adoption of technology across various traditional financial sectors, including fiat currencies, equities, bonds, and real estate. like BlackRock and Bank of America, further affirm the transformative potential of tokenization in enhancing financial infrastructure efficiencies, reducing cost, optimizing supply and distribution chains. Moreover, industry analysis from firms such as Boston Consulting Group anticipate a substantial surge in the potentially reaching $16 trillion by the year 2030. As pioneers in this evolving landscape, we hold a strong sense of optimism that the value of our rebranding efforts will unlock for our shareholders. We remain steadfast in our commitment to seizing the opportunities presented by market shift. With that, we are ready to open the call for questions. Operator, please provide the appropriate questions.
spk00: Question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your question is in the question queue. You may press star 2 if you would like to answer a question from the queue. Participants using speaker may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. The first question is from Kent Engelke from Capital Securities Management. Please go ahead.
spk02: Hey, Joe. Hey, Brendan. Question on how much of market penetration do you think that you can get on this $10 trillion market? Hey, Ken. Thanks for tuning in.
spk01: Here in Southern California. Yeah. Apparently the size of the company we are, There is the market, the market is in trillions. We're not saying we're going to go out, you know, we could be a five or what have you. The size that we are, the market is so vast that a few percentage points is an unfathomable number for us. I'll leave it at that saying the market is so vast and the playing field up ahead of us is so immense. We are, in my opinion, solid.
spk02: to this opportunity how are you all marketing it and stuff like that because as you said it's a even one percent shareholders will make a gazillion dollars how are you marketing it all yes and uh
spk01: So, Cal, hopefully next week we'll just make that a little bit more available to shareholders. But we have a whole plan of how we're rebranding and how we're doing things. There will be various different events that we will be going to. Different banks are interested. Investment banks are interested. Shareholders are interested. But... We're up to it. Cool. Thank you. Absolutely.
spk00: As a reminder, it is star 1 to ask a question. And again, that is star 1 to ask a question. This concludes our question and answer session. I would like to turn the floor back over to Mr. Maju for his closing comments.
spk01: Thank you for joining us on today's show. business partners, and investors for their unwavering support. I particularly want to acknowledge our dedicated Oxbridge team whose extensive expertise has been instrumental in navigating and advancing our business amidst these challenging circumstances. Should you have any additional questions, please do not hesitate to reach out to us anytime. Once again, thank you for your time and attention today and for your ongoing interest in Oxbridge.
spk00: Thank you. Before we conclude today's call, I would like to remind everyone that a recording of today's call will be available by telephone 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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