Based on the provided financial report articles, I generated the title for the article: "OXBR: Oxbridge Reinsurance Limited's 2024 Annual Report: Financial Highlights and Updates" Please note that the title may not be exact, as the provided text does not contain a clear title. However, based on the content, I inferred the title to be related to Oxbridge Reinsurance Limited's annual report for 2024.

Oxbridge Re Holdings Limited: Navigating Challenges and Exploring New Opportunities

Oxbridge Re Holdings Limited, a Cayman Islands specialty property and casualty reinsurer, has weathered a challenging year marked by volatility and uncertainty. The company’s financial results for the year ended December 31, 2024 reflect both the resilience of its core reinsurance business and the promising potential of its emerging Web3-focused initiatives.

Overview and Trends

Oxbridge Re’s primary focus is on underwriting fully collateralized reinsurance contracts, primarily for property and casualty insurance companies in the Gulf Coast region of the United States, with an emphasis on Florida. The company’s reinsurance subsidiary, Oxbridge Re NS, functions as a reinsurance sidecar, increasing the underwriting capacity of Oxbridge Reinsurance Limited.

In 2023, Oxbridge Re’s newest subsidiary, SurancePlus, began developing and offering tokenized reinsurance securities, representing fractionalized interests in reinsurance contracts. This effort culminated in the launch of the DeltaCat Re Token, which the company believes is the first “on-chain” reinsurance security of its kind to be developed by a subsidiary of a public company. Since then, SurancePlus has launched additional tokenized reinsurance securities, including EpsilonCat Re and, more recently, ZetaCat Re and EtaCat Re.

Oxbridge Re’s historical reinsurance business operations focus on achieving favorable long-term returns on equity by selectively and opportunistically underwriting reinsurance contracts. The company’s profitability is primarily determined by the adequacy of its premiums and investment income in covering its costs and expenses, which include acquisition costs, underwriting expenses, claim payments, and general and administrative expenses.

Recent Developments

The formation of SurancePlus, Oxbridge Re’s Web3-focused subsidiary, has been a significant development for the company. In 2023, SurancePlus launched the DeltaCat Re Token, a tokenized reinsurance security representing fractionalized interests in reinsurance contracts underwritten by Oxbridge Re NS. This was followed by the launch of the EpsilonCat Re Token in 2024 and the ZetaCat Re and EtaCat Re Tokens in 2025.

Oxbridge Re’s other notable developments include its involvement in the business combination between Oxbridge Acquisition Corp. and Jet Token Inc., which resulted in the formation of Jet.AI Inc. Oxbridge Reinsurance, Oxbridge Re’s wholly-owned licensed reinsurance subsidiary, was the lead investor in Oxbridge Acquisition’s sponsor and previously held a significant stake in Jet.AI.

Additionally, Oxbridge Re has been actively utilizing its at-the-market (ATM) equity distribution facility, having sold 372,341 ordinary shares for gross proceeds of $1,166,044 during the year ended December 31, 2024. The company has also entered into a securities purchase agreement with an institutional investor, raising approximately $3 million through a registered direct offering and a private placement of warrants.

Principal Revenue and Expense Items

Oxbridge Re’s primary sources of revenue include premiums assumed from reinsurance on property and casualty business, income from investments and unrealized gains (or losses) on other investments, and income from SurancePlus management fees.

Premiums assumed are directly related to the number, type, and pricing of reinsurance contracts the company writes. Investment income is primarily comprised of net realized and unrealized gains (losses), interest income, and dividends on investment securities. SurancePlus also generates revenue from incentive, technology, origination, and management fees associated with its tokenized reinsurance offerings.

The company’s expenses consist primarily of losses and loss adjustment expenses, policy acquisition costs and underwriting expenses, and general and administrative expenses. Losses and loss adjustment expenses are a function of the amount and type of reinsurance contracts written and the loss experience of the underlying coverage. Policy acquisition costs and underwriting expenses include brokerage fees, ceding commissions, premium taxes, and other direct expenses related to writing reinsurance contracts. General and administrative expenses encompass salaries, benefits, professional fees, and other operating expenses.

Results of Operations

For the year ended December 31, 2024, Oxbridge Re reported a net loss of $2.7 million, or $0.45 basic and diluted loss per share, compared to a net loss of $9.9 million, or $1.69 basic and diluted loss per share, for the year ended December 31, 2023. The improvement in net loss was primarily due to a decrease in the negative change in the fair value of other investments, particularly the company’s investment in Jet.AI.

Net premiums earned increased to $2.3 million in 2024, up from $1.26 million in 2023, primarily due to higher rates on contracts and the recognition of a full 12 months of premiums in 2024, compared to only 7 months in 2023 due to the acceleration of premiums on contracts in force.

There were no losses incurred for the years ended December 31, 2024 and 2023, reflecting the absence of significant events and reported claims on the company’s in-force contracts.

Policy acquisition costs and underwriting expenses increased to $254,000 in 2024 from $141,000 in 2023, primarily due to the recognition of a full 12 months of policy acquisition costs in 2024, compared to only 7 months in 2023 due to the acceleration of premiums and acquisition costs on the reinsurance contracts in force at the end of 2022.

General and administrative expenses decreased to $1.9 million in 2024 from $2.2 million in 2023, due to expense fluctuations and efficiencies associated with SurancePlus offerings, as well as the previous recognition of costs related to the Maxim equity distribution agreement in 2023.

Measurement of Results

Oxbridge Re uses various metrics to analyze the growth and profitability of its business operations. For the reinsurance business, the company measures growth in terms of premiums assumed and underwriting profitability by examining its loss, underwriting expense, and combined ratios.

The loss ratio, which is the ratio of losses and loss adjustment expenses incurred to premiums earned, remained at 0% for both 2024 and 2023, reflecting the absence of losses. The acquisition cost ratio, which is the ratio of policy acquisition costs and other underwriting expenses to net premiums earned, decreased marginally to 11.0% in 2024 from 11.2% in 2023.

The expense ratio, which is the ratio of policy acquisition costs, other underwriting expenses, and general and administrative expenses to net premiums earned, decreased significantly from 185.2% in 2023 to 94.3% in 2024. This improvement was due to the higher levels of premium earned and lower general administrative expenses incurred during the year ended December 31, 2024.

The combined ratio, which is the sum of the loss ratio and the expense ratio, also decreased from 185.2% in 2023 to 94.3% in 2024, reflecting the improved operational efficiency of the company’s reinsurance business.

Financial Condition

As of December 31, 2024, Oxbridge Re’s cash and restricted cash increased by $2.2 million to $5.9 million, primarily due to new collateral deposits for the treaty year ending May 31, 2025, which more than offset funds being released from the underlying trusts for the treaty year ending May 31, 2024.

The company’s equity securities decreased by $567,000 to $113,000, mainly due to the sale of two equity securities and the decrease in the value of the remaining equity securities during the year ended December 31, 2024. Other investments, which include the company’s investment in Jet.AI, decreased significantly from $2.48 million at the end of 2023 to $48,000 at the end of 2024, primarily due to fair value changes and proceeds from the redemption of Jet.AI’s Series A-1 Preferred Stock.

Oxbridge Re’s notes payable remained stable at $118,000 as of December 31, 2024. However, the amounts due to CatRe tokenholders increased from $1.52 million at the end of 2023 to $1.73 million at the end of 2024, reflecting the proceeds from third-party investors purchasing the EpsilonCat Re participation shares, net of management fees and returns paid to DeltaCat Re investors.

The company’s unearned premiums reserve increased by $76,000 to $991,000, due to reinsurance contracts placed for the 2024-2025 treaty year.

Liquidity and Capital Resources

Oxbridge Re’s primary sources of funds are premium receipts (net of brokerage fees and federal excise taxes), investment income, and proceeds from equity offerings, including its ATM facility and registered direct offerings. The company uses these funds to pay losses and loss adjustment expenses, other underwriting expenses, dividends (if any), and general and administrative expenses.

As of December 31, 2024, Oxbridge Re believes it had sufficient cash flows from operations to meet its liquidity requirements. The company expects to fund its operations for the foreseeable future from operating cash flows, as well as from potential future equity offerings.

While Oxbridge Re Holdings Limited is not subject to significant legal prohibitions on the payment of dividends, its subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS, are subject to Cayman Islands regulatory constraints that affect their ability to pay dividends to the parent company.

Exposure to Catastrophes

As a reinsurer, Oxbridge Re’s operating results and financial condition could be adversely affected by volatile and unpredictable natural and man-made disasters, such as hurricanes, windstorms, earthquakes, floods, fires, riots, and explosions, particularly in the State of Florida. The company attempts to limit its exposure to acceptable levels, but it is possible that a catastrophic event or multiple catastrophic events could have a material adverse effect on its financial condition, results of operations, and cash flows.

Conclusion

Oxbridge Re Holdings Limited has navigated a challenging year, with its core reinsurance business demonstrating resilience and its emerging Web3-focused initiatives showing promising potential. The company’s net loss improved significantly in 2024 compared to 2023, driven by a decrease in the negative change in the fair value of its other investments.

While the reinsurance business continues to be the primary driver of Oxbridge Re’s operations, the development and launch of tokenized reinsurance securities through its SurancePlus subsidiary represent an exciting new avenue for growth and diversification. As the company continues to explore and expand its Web3 offerings, it will be crucial to maintain a balance between capitalizing on these emerging opportunities and ensuring the ongoing stability and profitability of its core reinsurance business.

Overall, Oxbridge Re’s financial performance and strategic initiatives suggest a company that is adapting to the evolving market landscape and positioning itself for long-term success. As the company navigates the challenges and opportunities ahead, investors and stakeholders will be closely watching to see how Oxbridge Re leverages its strengths to drive sustainable growth and value creation.