Property and casualty reinsurer Oxbridge Re Holdings Limited has posted a net loss of $15,000 for the third quarter of 2019, driven by a more conservative capital deployment strategy that resulted in much lower net premiums earned.
The company’s performance was far below the $652,000 recorded in Q3 2018, despite taking no losses from the series of major catastrophe events that impacted other reinsurers last quarter.
Net premiums earned in Q3 2019 amounted to $279,000, compared with $700,000 for the same period last year, which Oxbridge Re said was “wholly due” to its strategic deployment of lower capital.
Total expenses, including losses and loss adjustment expenses, policy acquisition costs and general and administrative expenses, were $295,000 compared with $368,000 in the third quarter of 2018.
The decrease in expenses was due to a decrease in policy acquisition costs and underwriting expenses, as well as a decrease in general and administrative expenses resulting from cost savings initiatives implemented by the Oxbridge Re.
Oxbridge Re’s combined ratio was 105.7% for Q3 2019, compared with 33.5% last year, due to lower new premiums earned and lower net income from derivative instruments.
These figures are comprised entirely of the expense ratio, given that Oxbridge Re’s Q3 loss ratio was 0.0% in both 2018 and 2019.
Looking at the first nine months of the year, Oxbridge Re recorded a net loss of $366,000, compared with $706,000 for the same period last year.
This performance was again attributed to a lower deployment of capital, with net premiums earned amounting to $372,000 for the nine-month period, compared with $1.25 million last year.
The combined ratio deteriorated to 228.2% compared with 53.8% for the same period last year, due to lower net premiums earned and lower investment income. The loss ratio was again 0.0% for the nine-month period in both 2018 and 2019.
“Our conservative risk management underwriting focus allowed us to remain unaffected by the devastation caused by Hurricane Dorian on the Atlantic Coast, Typhoon Hagibis in Japan, the recent California wildfires and various other devastating events worldwide,” said Oxbridge Re Holdings President and Chief Executive Officer Jay Madhu.
“This also marks the second year of deploying our side car and we are pleased with the results thus far. With a strong cash and restricted cash position, our equity currently translates to a book value of $1.39 per common share,” Madhu explained.
“Looking ahead, we remain optimistic about the long-term prospects for our business as we continue to evaluate additional opportunities for growth as well further diversification of risk.”
