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OXRE(OXBR) - 2024 Q4 - Earnings Call Transcript
OXBROXRE(OXBR)2025-03-27 02:17
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Financial Data and Key Metrics Changes - For the three months ended December 31, 2024, net premiums increased to 595,000from595,000 from 523,000 in the prior year period, representing a growth of approximately 13.8% [14] - For the year ended December 31, 2024, net premiums rose by 2.3millionto2.3 million to 1.25 million, reflecting a 2.3% increase [14] - Total revenues for the fiscal year ended December 31, 2024, were 546,000comparedtoanegative546,000 compared to a negative 7 million in the prior year, indicating a significant turnaround [16] - The company reported a net loss of 460,000or460,000 or 0.05 per share for Q4 2024, an improvement from a net loss of 2.67millionor2.67 million or 0.46 per share in Q4 2023 [17] - For the year ended December 31, 2024, the net loss was 2.7millionor2.7 million or 0.45 per share, down from a net loss of 9.9millionor9.9 million or 1.69 per share in the prior year [17] Business Line Data and Key Metrics Changes - The loss ratio remained consistent at 0% for both the year ended December 31, 2024, and 2023, indicating stable underwriting performance [19] - The acquisition cost ratio decreased marginally to 11.1% for Q4 2024 from 11.7% in Q4 2023, reflecting improved operational efficiency [20] - The expense ratio decreased significantly from 102.3% in Q4 2023 to 83% in Q4 2024, and from 185.2% for the year ended December 31, 2023, to 94.3% for fiscal 2024, due to higher premiums earned and lower general admin expenses [21] Market Data and Key Metrics Changes - The company is focusing on the RWA and Web3 sectors, aiming to position itself as a prominent player in these markets [12] - The anticipated growth in the RWA tokenization ecosystem is projected to exceed 10trillionoverthenextdecade,drivenbyincreasingadoptionoftokenizedassets[34]CompanyStrategyandDevelopmentDirection−Thecompanyaimsforlong−termgrowthandbookvaluepersharebyselectivelywritingbusinessthatgeneratesattractiveunderwritingprofits[10]−TheestablishmentofSurancePlusInc.reflectsthecompany′sstrategytodiversifyintoRWAWeb3technology,democratizingaccesstoreinsurancethroughtokenizedsecurities[11]−AstrategicreviewprocesshasbeeninitiatedtoexplorevariousstrategicalternativesforthecompanyanditsWeb3subsidiary,includingpotentialmergersordivestitures[28]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedoptimismregardingthelong−termoutlookofthecorereinsurancebusinessandtheintegrationofSurancePlus[13]−Thecompanyiscommittedtoinnovationanddiversification,particularlyinblockchain−basedassets,whicharegainingglobaladoption[29]−ManagementhighlightedthepotentialforsubstantialgrowthintheRWAspace,withafocusonenhancinginvestoraccesstodigitalsecurities[31]OtherImportantInformation−Theinvestmentportfoliodecreasedto10 trillion over the next decade, driven by increasing adoption of tokenized assets [34] Company Strategy and Development Direction - The company aims for long-term growth and book value per share by selectively writing business that generates attractive underwriting profits [10] - The establishment of SurancePlus Inc. reflects the company's strategy to diversify into RWA Web3 technology, democratizing access to reinsurance through tokenized securities [11] - A strategic review process has been initiated to explore various strategic alternatives for the company and its Web3 subsidiary, including potential mergers or divestitures [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the long-term outlook of the core reinsurance business and the integration of SurancePlus [13] - The company is committed to innovation and diversification, particularly in blockchain-based assets, which are gaining global adoption [29] - Management highlighted the potential for substantial growth in the RWA space, with a focus on enhancing investor access to digital securities [31] Other Important Information - The investment portfolio decreased to 113,000 at December 31, 2024, from 680,000attheprioryearend,primarilyduetothesaleofequitysecurities[21]−Cashandcashequivalentsincreasedto680,000 at the prior year end, primarily due to the sale of equity securities [21] - Cash and cash equivalents increased to 5.9 million at December 31, 2024, from 3.8millioninthepriorperiod,attributedtonewcollateraldeposits[22]−Thecompanycompletedareversedirectoffering,raisinggrossproceedsof3.8 million in the prior period, attributed to new collateral deposits [22] - The company completed a reverse direct offering, raising gross proceeds of 3 million subsequent to year-end [23] Q&A Session Summary Question: What are the underwriting risk management efforts that have resulted in no losses incurred in the last couple of quarters? - Management explained that they review contracts internally and also consider follow-on reinsurers to ensure contracts are adequately priced, which has led to successful underwriting [42][44] Question: What is the timeframe for the 2025/2026 tokenization offerings? - Management indicated that they are actively looking to grow the opportunity and expect to have funds live on June 1 for reinsurance contracts [46][48] Question: How does raising third-party money through tokenizations affect the company's risk profile? - Management confirmed that including third-party funds lowers the risk profile while still allowing the company to earn management fees [50][52] Question: Can you comment on the Florida P&C insurance market? - Management noted that a significant portion of insurance premiums goes to reinsurance, and while the market may improve slightly, the company is well-positioned to capitalize on opportunities in this space [55][59] Question: How have presentations to various groups been received? - Management reported that presentations have been well received, particularly at family office conferences, indicating strong interest in their offerings [82][84]