Oxbridge Re (OXBR) 8 Aug 24 2024 Q2 Earnings call transcript
In Oxbridge Re's latest earnings call, Chairman, President, and CEO Jay Madhu and Chief Financial Officer Wrendon Timothy discussed the company's performance and future plans, highlighting significant strides in fortifying and diversifying its business.
Strategic Diversification
Oxbridge Re's core business remains in reinsurance, where the company specializes in underwriting low-frequency, high-severity risks. To diversify its portfolio, the company made strategic investments in 2021, becoming the lead sponsor of Oxbridge Acquisition Corp., a special purpose acquisition company (SPAC), and successfully completing the business combination with Jet.AI Inc. in 2023. This move expanded the company's operations into software and aviation segments, including the B2B CharterGPT app and the Jet.AI operator platform, as well as jet aircraft fractionalization and charter management.
Investments in Web3 Technology
In late 2022, Oxbridge Re established SurancePlus, a wholly-owned subsidiary focused on tokenizing real-world assets (RWAs) and offering tokenized reinsurance securities as alternative investment opportunities. This innovative approach leverages blockchain technology to ensure transparency and compliance with SEC guidelines, broadening investor participation and democratizing access to reinsurance.
Financial Performance
The financial results for the quarter ended June 30, 2024, show a significant increase in net premiums earned, primarily due to the recognition of full premiums for the entire contract period. However, a decrease in investment income and a loss on other investments impacted the overall revenue. The net loss for the quarter was $821,000, reflecting the negative change in the fair value of equity securities and investments.
Looking Ahead
Oxbridge Re is positioning itself as a prominent player in the RWA Web3 sector, aiming to expand its presence in this rapidly growing market. The company anticipates an extraordinary expansion of the tokenized RWA market over the next decade, with estimates exceeding $10 trillion. This optimistic outlook is fueled by the increasing adoption of blockchain technology in traditional financial sectors and the endorsement from institutions like BlackRock and Bank of America.
Market Penetration and Marketing Efforts
When asked about market penetration and marketing efforts, CEO Jay Madhu acknowledged the vast size of the market and the company's potential to capture a few percentage points, which could result in substantial returns for shareholders. He also mentioned plans for rebranding and various events to engage investors and investment banks.
Conclusion
Oxbridge Re's strategic diversification into disruptive technologies and tokenized real-world assets is a promising move, positioning the company at the forefront of the evolving RWA market. With a strong focus on underwriting low-frequency, high-severity risks and expanding into the software and aviation sectors, Oxbridge Re is poised for growth and value creation for its shareholders. As the company navigates this dynamic landscape, it remains committed to leveraging the power of blockchain technology and innovation to capitalize on the opportunities presented by the market shift.