Oxbridge Re Holdings Limited — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with FY2022. Amounts are U.S. dollars. The company is a Cayman Islands specialty property and casualty reinsurer focused mainly on fully collateralized catastrophe risks in the U.S. Gulf Coast, particularly Florida. It also launched a tokenized reinsurance securities business through SurancePlus.
Key financial results
| Metric | FY2023 | FY2022 |
|---|---|---|
| Assumed premiums | $2.170 million | $645,000 |
| Net premiums earned | $1.255 million | $995,000 |
| Total revenue | $(7.049) million | $850,000 |
| Net loss | $(9.915) million | $(1.789) million |
| Basic and diluted loss per share | $(1.69) | $(0.31) |
| Loss ratio | 0.0% | 107.8% |
| Expense ratio | 185.2% | 153.1% |
| Combined ratio | 185.2% | 260.9% |
- Main driver of the larger net loss: an $8.945 million unrealized loss on other investments, principally the company’s Jet.AI investment. The investment’s carrying value fell to $2.478 million from $11.423 million. The reported loss is non-cash in the period, but changes in Jet.AI’s market value can materially affect earnings and equity.
- Underwriting: FY2023 loss and loss-adjustment expense was zero, compared with $1.073 million in FY2022, when Hurricane Ian triggered limit losses on two contracts. Net premiums earned rose by $260,000, attributed to higher reinsurance rates. The combined ratio remained above 100%, reflecting operating expenses exceeding earned premiums.
- Expenses: General and administrative expenses rose about $770,000 to $2.183 million, including costs related to the SurancePlus launch and the Maxim equity distribution agreement.
- Cash flows: Net cash used in operating activities was $1.260 million; investing activities used $105,000; financing activities provided $1.182 million, mainly from DeltaCat token proceeds, partly offset by noteholder redemptions. Cash and restricted cash together were $3.745 million at year-end, compared with $3.928 million in 2022; $3.250 million was restricted and held in trust.
- Balance sheet and obligations: Total assets were $8.253 million, total liabilities $2.921 million, and shareholders’ equity $5.332 million, down from $14.989 million in 2022. Notes payable to noteholders were $118,000; DeltaCat tokenholder liabilities were $1.523 million. No off-balance-sheet arrangements were reported.
Material changes and business developments
- In June 2023, SurancePlus completed its DeltaCat Re private placement, issuing 244,776 securities at $10 each and raising $2.448 million in total. Approximately $1.280 million came from third-party investors and $1.167 million from Oxbridge Re Holdings. The securities represent indirect interests in reinsurance contracts for the 2023–2024 treaty year.
- Oxbridge Reinsurance holds interests in Jet.AI, including common stock, warrants and preferred stock. The Jet.AI business combination closed in August 2023, moving the traded investment from Level 3 valuation to Level 1 based on market prices.
- The company invested $100,000 in a Jet.AI bridge note. The filing reports that it matured and was redeemed on March 11, 2024, with Oxbridge receiving $140,000.
- At year-end, the unearned premium reserve was $915,000, compared with zero in 2022. The reserve for losses and loss-adjustment expenses was zero, compared with $1.073 million in 2022 after payment of the prior-year reserve.
Liquidity, outlook and principal risks
Management stated that it believed cash flows and available liquidity were sufficient for operating needs, with funding expected from cash, investment income and underwriting activity. It reported no current plan to issue debt, while noting that future equity offerings could be used to fund growth. The filing gives no quantified earnings or revenue guidance. Management plans to pursue selective, fully collateralized underwriting and develop additional tokenized reinsurance and other real-world-asset products; these initiatives remain early-stage.
- Catastrophe exposure is concentrated in property risks and a relatively small number of cedants, with particular sensitivity to Florida hurricanes. Catastrophe losses are unpredictable and reserves are not established for future events before they occur.
- Loss reserves depend on cedant reporting, actuarial estimates and management judgment; actual claims could differ materially. The company reported no year-end loss reserve for FY2023.
- The Jet.AI investment creates material fair-value and earnings volatility. The company also identifies counterparty, broker, investment liquidity and market risks.
- The tokenization business has limited operating history and faces execution, regulatory, technology, cybersecurity, smart-contract, blockchain and liquidity risks. The filing says it had generated only limited management-fee income from DeltaCat and had not announced revenue-producing third-party RWA tokenization activities.
- The reinsurance subsidiaries are Cayman Islands-licensed, non-rated and require collateral for contracts; maintaining collateral can constrain capital available for growth. Regulatory capital or licensing issues could restrict operations or distributions to the parent.
- Oxbridge paid no dividends in 2023 or 2022 and stated it did not expect to resume cash dividends in the foreseeable future. The filing also notes that the publicly traded warrants may not be exercisable for cash without an effective registration statement covering underlying shares.
Investor facts to verify
- Review the valuation, composition and subsequent performance of Jet.AI holdings, including the $8.945 million FY2023 unrealized loss and the remaining preferred-stock investment.
- Reconcile the reported year-end cash figures: total cash and restricted cash were $3.745 million, of which $3.250 million was restricted in trust; assess cash available at the holding-company level.
- Examine DeltaCat’s contractual economics, tokenholder claims and the distinction between third-party proceeds and Oxbridge’s own investment in the offering.
- Assess cedant concentration, catastrophe exposure, collateral requirements, and the adequacy of reserves as new claims information emerges.
- Confirm subsidiary regulatory capital compliance and dividend capacity. The filing states the subsidiaries exceeded applicable minimums; their ability to upstream funds is subject to regulatory constraints.
- Note that management concluded disclosure controls and internal control over financial reporting were effective; the auditor issued an unqualified opinion on the financial statements but did not attest to internal control effectiveness.