Oxbridge Re reports Q3 2019 net loss despite risk focus that minimised cost impacts of Dorian, Hagibis and wildfires

Oxbridge Re has reported a net loss in its third quarter 2019 results, although Jay Madhu, president and chief executive officer, praised the reinsurer’s “conservative risk management underwriting focus” for helping the company “remain unaffected by the devastation” caused by Hurricane Dorian, Typhoon Hagibis and the recent California wildfires.

The results showed that net premiums earned for Q3 2019 fell to $279,000 compared with $700,000 in the third quarter of 2018. The reinsurer said the decrease was “wholly due to strategic deployment of lower capital in the current period, when compared to the same quarter a year ago”.

Oxbridge Re reported a net loss of $15,000 compared with net income of $652,000 in the same period for the year before. “The increase in net loss was due primarily to lower net premiums earned resulting from the strategic deployment of lower capital during the third quarter of 2019 compared to the same prior year period,” the reinsurer said.

Third quarter results also showed a deterioration in the combined ratio, which rose dramatically to 105.7 percent compared with 33.5 percent in the same three month period last year. “The increase in combined ratio was due to lower net premiums earned and lower net income from derivative instruments during the third quarter of 2019 when compared with the same period last year,” the reinsurer said

President and chief executive officer Jay Madhu said: “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.

"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. 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."

Results for the nine months ended September 30, 2019, showed that the reinsurer's net loss totaled $366,000 compared with net income of $706,000 for the first nine months of the previous year. Again, the compnay said that the increase in net loss was “due primarily to lower net premiums earned resulting from decreased capital deployed during the nine months ended September 30, 2019 compared to the same prior-year period”.

Net premiums earned totaled $372,000 compared with $1,254,000 for the first nine months of 2018.Oxbridge Re said this decrease was primarily due to lower capital being deployed during the first nine months of 2019 compared to the same period in 2018. The combined ratio for the first nine months of the year deteriorated to 228.2% compared with 53.8% for the same period last year. “The increase was due to lower net premiums earned and lower net income from derivative instruments,” the report said.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

Swiss Re appoints CFO Global Reinsurance

NMU includes cover for reputational harm loss in cyber product

Cat modeller launches Multiple Peril Crop Insurance model for India

Lloyd’s announces raft of appointments for charities

AXA XL boosts UK life, accident & health with hires and promotions

BMS appoints Jeff Irvan as chief property officer for US reinsurance

Atradius appoints secures new CEO

Feature:  10 ways insurers are using insurtech to drive new business