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8-K - CURRENT REPORT - OXBRIDGE RE HOLDINGS Ltd | oxbr_8k.htm |
Exhibit 99.1
Company
Contact:
Oxbridge
Re Holdings Limited
Jay
Madhu, CEO
345-749-7570
jmadhu@oxbridgere.com
Media
contact:
Suzie
Boland
RFB
Communications Group
813-786-1019
sboland@rfbcommunications.com
Oxbridge
Re Holdings Reports Third Quarter 2017 Results
GRAND CAYMAN, Cayman Islands (November 14, 2017) --
Oxbridge
Re Holdings Limited (OXBR),
a provider of reinsurance solutions primarily to property and
casualty insurers in the Gulf Coast region of the United States,
has reported financial results for the third quarter ended
September 30, 2017.
Third Quarter 2017 Results
Net
loss totaled $23.0 million or $(3.97) per basic and diluted common
share, compared with net income of $3.0 million or $0.50 per basic
and diluted common share in the third quarter of 2016. The
significant decrease in net income was wholly due to the
triggering, during the third quarter of 2017, of limit losses on
all the company’s reinsurance contracts, due to the
individual and collective impact of Hurricane Harvey, Hurricane
Irma and Hurricane Maria, compared with no catastrophic losses
during the same quarter of the prior fiscal year.
Net
premiums earned increased to $19.3 million from $1.9 million in the
third quarter of 2016. The increase in
net premiums was wholly due to the acceleration of premium
recognition due to full limit losses being incurred on all of the
company’s reinsurance contracts during the third
quarter.
Net
investment income totaled $128,000 coupled with $(104,000) of net
realized investment losses. This compares with $126,000 of net
investment income coupled with $122,000 of net realized investment
gains for the third quarter of 2016.
Total
expenses, including losses and loss adjustment expenses, policy
acquisition costs and underwriting expenses, and general and
administrative expenses, were $42.3 million compared with
$(819,000) in the third quarter of 2016. The increase in total expenses
was due to the triggering of limit losses on all the
company’s reinsurance contracts, due to the individual and
collective impact of Hurricane Harvey, Hurricane Irma and Hurricane
Maria, as well as adverse development on prior year claims,
compared with no catastrophic losses during the same quarter of the
prior fiscal year. The increase in total expenses was also due to
acceleration of premium recognition and the resulting acceleration
of policy acquisition costs.
During
the third quarter of 2017, the company repurchased 72,747 common
shares under its $2.0 million Share Repurchase Program approved by
the board of directors in May 2016. These shares were repurchased
at an average price of $5.33 per share. The stock repurchase
program has been discontinued effective September 30, 2017. Through
September 28, 2017, the company had repurchased an aggregate of
326,413 common shares for an aggregate cost of $1,803,568 under the
Share Repurchase Program.
1
Dividends
paid per share were $0.12 for the third quarter of 2017, unchanged
from the third quarter of 2016.
At
September 30, 2017, cash and cash equivalents, and restricted cash
and cash equivalents, totaled $24.2 million compared with $35.7
million at December 31, 2016.
Third Quarter 2017 Financial Ratios
Loss
ratio, which measures underwriting profitability, is the ratio of
losses and loss adjustment expenses incurred to net premiums
earned. The loss ratio was 214.4% for the third quarter of 2017
compared with (65.1)% for the third quarter of 2016. The increase
in loss ratio was primarily due to the multiple limit losses
suffered during the third quarter of 2017, partially offset by a
higher denominator in net premiums earned, compared with the
previous quarter.
Acquisition
cost ratio, which measures operational efficiency, compares policy
acquisition costs and other underwriting expenses with net premiums
earned. The acquisition cost ratio was 2.7% for the third quarter
of 2017 compared with 4.3% for the same year-ago period. The
decrease in acquisition cost ratio was due wholly to the
acceleration of acquisition costs recognition, more than offset by
a larger denominator in net premiums earned, when compared with the
same period a year ago.
Expense
ratio, which measures operating performance, compares policy
acquisition costs, other underwriting expenses and general and
administrative expenses with net premiums earned. The expense ratio
totaled 4.6% during the third quarter of 2017 compared with 22.4%
for the third quarter of 2016. The decrease in expense ratio was
due wholly to a significant increase in net premiums earned
partially offset by increased policy acquisition costs as recorded
during the third quarter of 2017, when compared with the same
period a year ago.
Combined
ratio, which is used to measure underwriting performance, is the
sum of the loss ratio and the expense ratio. If the combined ratio
is at or above 100%, underwriting is not profitable. The combined
ratio totaled 219.0% for the third quarter of 2017 and (42.7)% for
the third quarter of 2016. The increase in combined ratio was due
to a significantly higher loss ratio during the third quarter of
2017, when compared with the prior year quarter.
Nine Months Ended September 30, 2017 Financial Results
Net
loss totaled $20.6 million or $(3.53) per basic and diluted common
share compared with net income of $4.9 million or $0.81 per basic
and diluted common share for the first nine months of 2016. The
significant decrease in net income was wholly due to the
triggering, during the third quarter of 2017, of limit losses on
all the company’s reinsurance contracts, due to the
individual and collective impact of Hurricane Harvey, Hurricane
Irma and Hurricane Maria, compared with nominal loss and loss
adjustment expenses during the nine-month period of the prior
fiscal year.
Net
premium earned totaled $23.3 million compared with $6.6 million for
the first nine months of 2016. The
increase in net premiums earned was wholly due to the acceleration
of premium recognition due to full limit losses being incurred on
all of the company’s reinsurance contracts during the first
nine months of 2017.
Net
investment income totaled $341,000 coupled with net realized
investment losses of $(56,000). This compares with $327,000 of net
investment income coupled with $256,000 of net realized investment
gains for the first nine months of 2016.
2
Total
expenses, including losses and loss adjustment expenses, policy
acquisition costs and underwriting expenses, and general and
administrative expenses, were $44.2 million compared with $2.3
million in the first nine months of 2016. The increase in total
expenses was due to the triggering of limit losses on all the
company’s reinsurance contracts, due to the individual and
collective impact of Hurricane Harvey, Hurricane Irma and Hurricane
Maria, as well as adverse development on prior year claims,
compared with nominal loss and loss adjustment expenses during the
same period of the prior fiscal year. The increase in total
expenses was also due to acceleration of premium recognition and
the resulting acceleration of policy acquisition
costs.
Dividends
paid per share were $0.36 for the nine months ended September 30,
2017, unchanged from the same year-ago period.
Nine Months Ended September 30, 2017 Financial Ratios
The
loss ratio was 181.8% compared to a loss ratio of 15.5% during the
first nine months of 2016. The increase in loss ratio was primarily
due to the multiple limit losses suffered during the first nine
months of 2017, partially offset by a higher denominator in net
premiums earned, compared with the previous period.
The
acquisition cost ratio was 2.9% compared with 3.2% for the same
year-ago period. The decrease in acquisition cost ratio was due
wholly to the acceleration of acquisition costs recognition, more
than offset by a larger denominator in net premiums earned, when
compared with the prior year period.
The
expense ratio was 7.6% compared with 19.5% for the first nine
months of 2016. The decrease in expense ratio was due wholly to a
significant increase in net premiums earned partially offset by
increased policy acquisition costs as recorded during the first
nine months of 2017, when compared with the same period a year
ago.
The
combined ratio was 189.3% compared with 35.0% for the year-ago
period. The increase in combined ratio was due to a significantly
higher loss ratio during the first nine months period of 2017, when
compared with the prior year period.
Subsequent Events
On November 12, 2017, the Company’s board of directors
decided to suspend the Company’s regular $0.12 quarterly cash
dividend, with the suspension to commence with the dividend that
would have otherwise been payable for the third quarter of 2017.
The board of directors intends to reconsider in the future
the payment of a quarterly cash dividend, but the timing of such
reconsideration has not been determined, and there is no intention
to resume dividend payments in the foreseeable future, if at
all. Any decision to resume dividend payments will be
dependent upon a variety of factors, including the state of the
Company’s business as well as general market conditions at
the time of reconsideration, and there is no assurance that
dividend payments will recommence. Additionally, and
in recognition of its dividend suspension, the Company has also
decided to suspend the payment of non-employee director fees,
effective October 1, 2017, which had been $30,000 per director per
annum.
Management Commentary
“The
third quarter was unfortunately the worst-case scenario for our
company, with all our contracts suffering limit losses,” said
Oxbridge Re President and CEO Jay Madhu. “To be clear, the
events that have transpired during this period, which included
three Category 4+ hurricanes, are not only highly anomalous but are
also by-no-means an indication of any future conditions we may have
to endure. Moving forward, we are continuing to evaluate
opportunities for recovery and growth as we remain focused on the
most integral element of our business, which is to provide
long-term value to our shareholders.”
Conference Call
Management
will host a conference call later today (November 14, 2017) to
discuss these financial results, followed by a question and answer
session. President and CEO Jay Madhu and CFO Wrendon Timothy will
host the call starting at 4:30 p.m. Eastern time.
3
The
live presentation can be accessed by dialing the number below or by
clicking the webcast link available on the Investor Information
section of the company's website at www.oxbridgere.com.
Date:
Tuesday, November 14, 2017
Time:
4:30 PM Eastern Time
Listen-only
toll-free number: 877-407-0782
Listen-only
international number: 201-689-8567
Please
call the conference telephone number 10 minutes before the start
time. An operator will register your name and organization. If you
have any difficulty connecting with the conference call, please
contact Issuer Direct at 919-481-4000 or operations@issuerdirect.com.
A
replay of the call will be available by telephone after 8 p.m.
Eastern time via the Investor Information section of Oxbridge's
website at www.oxbridgere.com
until December 14, 2017.
Toll-free
replay number: 877-481-4010
International
replay number: 919-882-2331
Conference
ID: 22277
About Oxbridge Re Holdings Limited
Oxbridge
Re (www.oxbridgere.com)
is a Cayman Islands exempted company that was organized in April
2013 to provide reinsurance business solutions primarily to
property and casualty insurers in the Gulf Coast region of the
United States. Through Oxbridge Re's licensed reinsurance
subsidiary, Oxbridge Reinsurance Limited, it writes fully
collateralized policies to cover property losses from specified
catastrophes. Oxbridge Re specializes in underwriting medium
frequency, high severity risks, where it believes sufficient data
exists to analyze effectively the risk/return profile of
reinsurance contracts. The company's ordinary shares and warrants
trade on the NASDAQ Capital Market under the symbols "OXBR" and
"OXBRW,"
respectively. The company's ordinary shares are included in the
Russell Microcap Index.
Forward-Looking Statements
This
press release may contain forward-looking statements made pursuant
to the Private Securities Litigation Reform Act of 1995. Words such
as "anticipate," "estimate," "expect," "intend," "plan," "project"
and other similar words and expressions are intended to signify
forward-looking statements. Forward-looking statements are not
guarantees of future results and conditions but rather are subject
to various risks and uncertainties. Some of these risks and
uncertainties are identified in the Company's filings with the SEC.
The occurrence of any of these risks and uncertainties could have a
material adverse effect on the Company's business, financial
condition and results of operations. Any forward-looking statements
made in this press release speak only as of the date of this press
release and, except as required by law, the Company undertakes no
obligation to update any forward-looking statement contained in
this press release, even if the Company's expectations or any
related events, conditions or circumstances change.
-Tables to follow-
4
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Balance Sheets
(expressed in thousands of U.S. Dollars, except per share and share
amounts)
|
At September 30, 2017
|
At December 31, 2016
|
|
(Unaudited)
|
|
Assets
|
|
|
Investments:
|
|
|
Fixed-maturity
securities, available for sale, at fair value (amortized cost:
$7,015 and $6,060, respectively)
|
$6,997
|
6,051
|
Equity securities,
available for sale, at fair value (cost: $1,860 and $5,343,
respectively)
|
1,848
|
4,941
|
Total
investments
|
8,845
|
10,992
|
Cash
and cash equivalents
|
5,748
|
12,242
|
Restricted
cash and cash equivalents
|
18,496
|
23,440
|
Accrued
interest and dividend receivable
|
43
|
48
|
Premiums
receivable
|
3,887
|
4,038
|
Reinsurance
recoverable
|
4,000
|
-
|
Deferred
policy acquisition costs
|
57
|
88
|
Prepayment
and other receivables
|
97
|
98
|
Property
and equipment, net
|
42
|
54
|
Total
assets
|
$41,215
|
51,000
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
Liabilities:
|
|
|
Reserve
for losses and loss adjustment expenses
|
$24,758
|
8,702
|
Loss
experience refund payable
|
-
|
1,470
|
Unearned
premiums reserve
|
2,367
|
3,461
|
Accounts
payable and other liabilities
|
171
|
204
|
Total
liabilities
|
27,296
|
13,837
|
|
|
|
Shareholders’
equity:
|
|
|
Ordinary
share capital, (par value $0.001, 50,000,000 shares authorized;
5,733,587 and 5,916,149 shares issued and outstanding)
|
6
|
6
|
Additional
paid-in capital
|
32,068
|
33,034
|
(Accumulated
Deficit) Retained earnings
|
(18,125)
|
4,534
|
Accumulated
other comprehensive loss
|
(30)
|
(411)
|
Total
shareholders’ equity
|
13,919
|
37,163
|
Total
liabilities and shareholders’ equity
|
$41,215
|
51,000
|
5
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Consolidated Statements of Income
(expressed in thousands of U.S. Dollars, except per share and
share amounts)
|
Three Months Ended
|
Nine Months Ended
|
||
|
September 30,
|
September 30,
|
||
|
2017
|
2016
|
2017
|
2016
|
|
(Unaudited)
|
(Unaudited)
|
||
|
|
|
|
|
Revenue
|
|
|
|
|
Assumed
premiums
|
$-
|
$-
|
$18,256
|
15,065
|
Premiums
ceded
|
(733)
|
-
|
(880)
|
-
|
Change
in loss experience refund payable
|
2,730
|
(2,089)
|
1,470
|
(4,465)
|
Change
in unearned premiums reserve
|
17,309
|
4,007
|
4,494
|
(3,955)
|
|
|
|
|
|
Net
premiums earned
|
19,306
|
1,918
|
23,340
|
6,645
|
Net
realized investment (losses) gains
|
(104)
|
122
|
(56)
|
256
|
Net
investment income
|
128
|
126
|
341
|
327
|
|
|
|
|
|
Total
revenue
|
19,330
|
2,166
|
23,625
|
7,228
|
|
|
|
|
|
Expenses
|
|
|
|
|
Losses
and loss adjustment expenses
|
41,400
|
(1,248)
|
42,427
|
1,030
|
Policy
acquisition costs and underwriting expenses
|
514
|
83
|
672
|
211
|
General
and administrative expenses
|
370
|
346
|
1,094
|
1,087
|
|
|
|
|
|
Total
expenses
|
42,284
|
(819)
|
44,193
|
2,328
|
|
|
|
|
|
Net
(loss) income
|
$(22,954)
|
2,985
|
$(20,568)
|
4,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share
|
$(3.97)
|
0.50
|
$(3.53)
|
0.81
|
|
|
|
|
|
Diluted (loss) earnings per share
|
$(3.97)
|
0.50
|
$(3.53)
|
0.81
|
|
|
|
|
|
Dividends paid per share
|
$0.12
|
0.12
|
$0.36
|
0.36
|
6