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Fully collateralized reinsurance company Oxbridge Re has reported a good first year’s results thanks to zero losses and a surprisingly good investment return that perhaps hints at the non-traditional, or even hedge fund reinsurer like, nature of its investment strategy.
Oxbridge Re, which IPO’d in 2014 and underwrites Gulf Coast property catastrophe risks, reported a combined ratio of just 32% for 2014, which is just expenses as the reinsurer suffered no losses at all during the underwriting year. This is likely helped by the fact it only writes coastal business that is largely exposed to named storms and hurricanes.
The reinsurer reported net income of $4m, on gross premiums written of $14.3m and premiums earned of $4.8m. All the numbers are up significantly on the 2013 period, helped by Oxbridge Re increasing its access to and the size of the reinsurance contracts it underwrites.
What’s perhaps most interesting is the investment income, which Oxbridge reports as $740,000 for 2014, consisting of $641,000 of investment gains and $99,000 of investment income. The firm began investing in fixed-maturity and equity securities in August 2014, which isn’t that long ago.