Oxbridge Re Holdings Ltd. Q2 FY2024 earnings call

Management Statement and Operational Highlights

• Reinsurance Foundation: Core reinsurance business involves writing fully collateralized policies for low frequency, high severity risks, aiming for long-term growth and book value per share through selective underwriting.
• Diversification:
  • In 2021, began diversifying via SPAC with Oxbridge’s Acquisition Corp., which merged with Jet.AI in Aug 2023, with Jet.AI operating in software and aviation segments trading on Nasdaq.
  • Established SurancePlus in 2022 for Web3 technology, specializing in tokenized real-world assets and reinsurance securities using blockchain for transparency.
  • Completed business combination with Jet.AI in Aug 2023, and rebranding to position as RWA Web3 focused company.
• Operational Milestones: Successful token offerings with DeltaCat Re and EpsilonCat Re, and strategic partnership with Zoniqx to expand RWA tokenization capabilities.

Segment Performance

• Reinsurance: Net premiums earned for Q2 2024 were $564,000 (up from $183,000 in Q2 2023); for the first six months of 2024, net premiums earned were $1.1 million (up from $183,000 in the same period last year). Loss ratio was 0% in both 2024 and 2023 as there were no loss or loss adjustment expenses. Acquisition ratio for the six-month period ended June 30, 2024, was 11% (marginally up from 10.9% in the same period last year). Expense ratio and combined ratio decreased due to higher premium levels.
• Software and Aviation (from Jet.AI): Jet.AI operates in software (CharterGPT app, Jet.AI operator platform) and aviation (jet aircraft fractionalization, etc.). Interest in Jet.AI is recognized at fair value in other investments on the balance sheet.
• SurancePlus: Focused on Web3 technology, with tokenized reinsurance securities. Initial offering of DeltaCat Re in 2023 had returns exceeding 49%, recent private placement of EpsilonCat Re raised ~$2.9 million, and strategic partnership with Zoniqx for RWA tokenization.

Guidance

• Optimism about long-term outlook of core reinsurance business and diversification efforts, particularly in the RWA Web3 sector. Anticipates capturing opportunities in the large and growing tokenized RWA market, with forecasts suggesting the market could exceed $10 trillion by the decade's end.

Risks

• Forward-Looking Statements: Forward-looking statements are subject to various risks and uncertainties detailed in Form 10-K and 10-Q, including risks related to market adoption of Web3 technologies, regulatory changes, and volatility in fair value of investments (e.g., changes in fair value of Jet.AI investment).

Question and Answer

Q: How much of a market penetration do you all think that you can get on this $10 trillion market?

A: Jay Madhu states the market is vast, and while exact market penetration percentages aren't specified, the company is positioned to capture opportunities in the immense market, noting the market is so large that a few percentage points are significant.

Q: How you are marketing and stuff like that?

A: Jay Madhu mentions rebranding plans, upcoming events, and talks with investment banks and shareholders, but notes it's a challenging effort to market and capture opportunities in the large RWA market.