Hurricane-hit Oxbridge Re writes zero business in Q1 – but CEO optimistic on future
Cayman-based property/casualty reinsurer Oxbridge Re effectively stopped writing business in the first quarter of 2019 as it grappled with the events of the previous hurricane season, when it suffered limit losses on all reinsurance contracts – but its CEO said he is optimistic about the future of the business.
The company made a net loss of $147,000 in the first quarter of 2019 compared with a net loss of $211,000 in the same period a year earlier. It said the decrease in net loss was primarily due to lower general and administrative expenses incurred during the first quarter of 2019 compared to the prior year period.
But its net premiums earned in the quarter were zero compared with $227,000 in the first quarter of 2018. It said this was due to the previous acceleration of premium recognition due to full limit losses being incurred on all the company's reinsurance contracts during the quarter ended December 31, 2018, combined with no new contracts written in the current period, when compared to the same year ago period.
Net investment income totaled $63,000 plus $51,000 of change in fair value of equity securities and $3,000 of net realized investment gains. This compares with $72,000 of net investment income, which was offset by $172,000 of change in fair value of equity securities and $173,000 of net realized investment losses in the first quarter of 2018.
Total expenses, including losses and loss adjustment expenses, policy acquisition costs and underwriting expenses, and general and administrative expenses, were $264,000 compared with $326,000 in the first quarter of 2018. The decrease in expenses was due to an overall decrease in general and administrative expenses, when compared to the prior year period.
Its loss ratio and combined ratio were both meaningless because of the lack of any business being written.
"The first quarter's results were affected by the events of the previous hurricane season, when we suffered limit losses on all reinsurance contracts," said Oxbridge Re Holdings CEO Jay Madhu. "Going forward, we continue to be optimistic about the future of our business and will look to employ our financial resources in ways that will have a positive impact on our results as well as contribute to the viability of our enterprise over the long term."
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