Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | OXBRIDGE RE HOLDINGS Ltd | |
Entity Central Index Key | 0001584831 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex-Transition Period | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,733,587 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed-maturity securities, available for sale, at fair value (amortized cost of $991 in 2018) | $ 0 | $ 993 |
Equity securities, at fair value (cost of $612 and $210 respectively) | 584 | 162 |
Total investments | 584 | 1,155 |
Cash and cash equivalents | 6,137 | 8,074 |
Restricted cash and cash equivalents | 1,915 | 3,225 |
Accrued interest and dividend receivable | 11 | 15 |
Premiums receivable | 837 | 0 |
Deferred policy acquisition costs | 82 | 0 |
Operating lease right-of-use assets | 140 | 0 |
Prepayment and other assets | 73 | 74 |
Property and equipment, net | 11 | 18 |
Total assets | 9,790 | 12,561 |
Liabilities: | ||
Reserve for losses and loss adjustment expenses | 107 | 4,108 |
Notes payable to Series 2019-1 noteholders | 600 | 0 |
Unearned premiums reserve | 744 | 0 |
Operating lease liabilities | 140 | 0 |
Accounts payable and other liabilities | 226 | 139 |
Total liabilities | 1,817 | 4,247 |
Shareholders' equity: | ||
Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 5,733,587 shares issued and outstanding) | 6 | 6 |
Additional paid-in capital | 32,253 | 32,226 |
Accumulated deficit | (24,286) | (23,920) |
Accumulated other comprehensive loss | 0 | 2 |
Total shareholders' equity | 7,973 | 8,314 |
Total liabilities and shareholders' equity | $ 9,790 | $ 12,561 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Fixed-maturity securities, available for sale, at fair value amortized cost | $ 0 | $ 991 |
Equity securities, at fair value cost | $ 612 | $ 210 |
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Ordinary shares, authorized | 50,000,000 | 50,000,000 |
Ordinary shares, issued | 5,733,587 | 5,733,587 |
Ordinary shares, outstanding | 5,733,587 | 5,733,587 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Assumed premiums | $ 0 | $ 47 | $ 1,116 | $ 2,627 |
Change in loss experience refund payable | 0 | 0 | 0 | (225) |
Change in unearned premiums reserve | 279 | 653 | (744) | (1,148) |
Net premiums earned | 279 | 700 | 372 | 1,254 |
Net income from derivative instruments | 0 | 397 | 0 | 773 |
Net investment and other income | 54 | 100 | 182 | 280 |
Net realized investment losses | 0 | (61) | 3 | (237) |
Change in fair value of equity securities | 17 | 118 | 20 | 22 |
Total revenue | 350 | 1,254 | 577 | 2,092 |
Expenses | ||||
Net loss on commutation | 0 | 0 | 0 | 8 |
Policy acquisition costs and underwriting expenses | 31 | 63 | 41 | 101 |
General and administrative expenses | 264 | 305 | 808 | 981 |
Total expenses | 295 | 368 | 849 | 1,090 |
Income (loss) before (income) attributable to Series 2019-1 noteholders | 55 | 886 | (272) | 1,002 |
(Income) attributable to Series 2019-1 noteholders | (70) | (234) | (94) | (296) |
Net (loss) income | $ (15) | $ 652 | $ (366) | $ 706 |
(Loss) earnings per share: basic and diluted | $ 0 | $ 0.11 | $ (0.06) | $ 0.12 |
Dividends paid per share | $ .00 | $ .00 | $ .00 | $ .00 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (15) | $ 652 | $ (366) | $ 706 |
Change in unrealized loss on investments: | ||||
Unrealized (loss) gain arising during the period | 0 | 1 | 1 | (3) |
Reclassification adjustment for net realized losses (gains) included in net (loss) income | 0 | 0 | (3) | 0 |
Net change in unrealized loss | 0 | 1 | (2) | (3) |
Total other comprehensive income (loss) | 0 | 1 | (2) | (3) |
Comprehensive (loss) income | $ (15) | $ 653 | $ (368) | $ 703 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net (loss) income | $ (366) | $ 706 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Stock-based compensation | 27 | 94 |
Net amortization of premiums on investments in fixed-maturity securities | 0 | 7 |
Depreciation and amortization | 7 | 14 |
Net realized investment (gains) losses | (3) | 237 |
Change in fair value of equity securities | (20) | (22) |
Change in operating assets and liabilities: | ||
Accrued interest and dividend receivable | 4 | 3 |
Premiums receivable | (837) | 1,718 |
Deferred policy acquisition costs | (82) | (143) |
Prepayment and other receivables | 1 | 45 |
Reserve for losses and loss adjustment expenses | (4,001) | (4,669) |
Loss experience refund payable | 0 | (135) |
Losses payable | 0 | (386) |
Unearned premiums reserve | 744 | (272) |
Accounts payable and other liabilities | 87 | 589 |
Net cash used in operating activities | (4,439) | (2,214) |
Investing activities | ||
Purchase of fixed-maturity securities | 0 | (4,902) |
Purchase of equity securities | (402) | (5,804) |
Proceeds from sale of fixed-maturity and equity securities | 994 | 12,181 |
Net cash provided by investing activities | 592 | 1,475 |
Financing activities | ||
Proceeds on issuance of notes payable to Series 2019-1 noteholders | 600 | 2,000 |
Net cash provided by financing activities | 600 | 2,000 |
Net change during the period | (3,247) | 1,261 |
Cash and cash equivalents, and restricted cash and cash equivalents at beginning of period | 11,299 | 10,887 |
Cash and cash equivalents, and restricted cash and cash equivalents at end of period | 8,052 | 12,148 |
Supplemental disclosure of cash flow information | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
Non-cash transactions | ||
Net change in unrealized loss on securities available for sale | (2) | (3) |
Operating lease right-of-use assets | 140 | 0 |
Operating lease liability | $ 140 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Ordinary Share Capital | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance, shares at Dec. 31, 2017 | 5,733,587 | ||||
Beginning balance at Dec. 31, 2017 | $ 6 | $ 32,100 | $ (18,149) | $ (39) | $ 13,918 |
Cumulative effect of change in accounting for equity securities as of January 1, 2018 | (22) | 22 | 0 | ||
Net (loss) income for the period | (211) | (211) | |||
Stock-based compensation | 31 | 31 | |||
Total other comprehensive loss (income) | (3) | (3) | |||
Ending balance, shares at Mar. 31, 2018 | 5,733,587 | ||||
Ending balance at Mar. 31, 2018 | $ 6 | 32,131 | (18,382) | (20) | 13,735 |
Beginning balance, shares at Dec. 31, 2017 | 5,733,587 | ||||
Beginning balance at Dec. 31, 2017 | $ 6 | 32,100 | (18,149) | (39) | 13,918 |
Net (loss) income for the period | 706 | ||||
Total other comprehensive loss (income) | (3) | ||||
Ending balance, shares at Sep. 30, 2018 | 5,733,587 | ||||
Ending balance at Sep. 30, 2018 | $ 6 | 32,194 | (17,465) | (20) | 14,715 |
Beginning balance, shares at Mar. 31, 2018 | 5,733,587 | ||||
Beginning balance at Mar. 31, 2018 | $ 6 | 32,131 | (18,382) | (20) | 13,735 |
Net (loss) income for the period | 265 | 265 | |||
Stock-based compensation | 32 | 32 | |||
Total other comprehensive loss (income) | (1) | (1) | |||
Ending balance, shares at Jun. 30, 2018 | 5,733,587 | ||||
Ending balance at Jun. 30, 2018 | $ 6 | 32,163 | (18,117) | (21) | 14,031 |
Net (loss) income for the period | 652 | 652 | |||
Stock-based compensation | 31 | 31 | |||
Total other comprehensive loss (income) | 1 | 1 | |||
Ending balance, shares at Sep. 30, 2018 | 5,733,587 | ||||
Ending balance at Sep. 30, 2018 | $ 6 | 32,194 | (17,465) | (20) | 14,715 |
Beginning balance, shares at Dec. 31, 2018 | 5,733,587 | ||||
Beginning balance at Dec. 31, 2018 | $ 6 | 32,226 | (23,920) | 2 | 8,314 |
Net (loss) income for the period | (146) | (146) | |||
Stock-based compensation | 9 | 9 | |||
Total other comprehensive loss (income) | (2) | (2) | |||
Ending balance, shares at Mar. 31, 2019 | 5,733,587 | ||||
Ending balance at Mar. 31, 2019 | $ 6 | 32,235 | (24,066) | 0 | 8,175 |
Beginning balance, shares at Dec. 31, 2018 | 5,733,587 | ||||
Beginning balance at Dec. 31, 2018 | $ 6 | 32,226 | (23,920) | 2 | 8,314 |
Net (loss) income for the period | (366) | ||||
Total other comprehensive loss (income) | (2) | ||||
Ending balance, shares at Sep. 30, 2019 | 5,733,587 | ||||
Ending balance at Sep. 30, 2019 | $ 6 | 32,253 | (24,286) | 0 | 7,973 |
Beginning balance, shares at Mar. 31, 2019 | 5,733,587 | ||||
Beginning balance at Mar. 31, 2019 | $ 6 | 32,235 | (24,066) | 0 | 8,175 |
Net (loss) income for the period | (205) | (205) | |||
Stock-based compensation | 9 | 9 | |||
Total other comprehensive loss (income) | 0 | ||||
Ending balance, shares at Jun. 30, 2019 | 5,733,587 | ||||
Ending balance at Jun. 30, 2019 | $ 6 | 32,244 | (24,271) | 0 | 7,979 |
Net (loss) income for the period | (15) | (15) | |||
Stock-based compensation | 9 | 9 | |||
Total other comprehensive loss (income) | 0 | ||||
Ending balance, shares at Sep. 30, 2019 | 5,733,587 | ||||
Ending balance at Sep. 30, 2019 | $ 6 | $ 32,253 | $ (24,286) | $ 0 | $ 7,973 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | (a) Organization Oxbridge Re Holdings Limited (the “Company”) was incorporated as an exempted company on April 4, 2013 under the laws of the Cayman Islands. Oxbridge Re Holdings Limited owns 100% of the equity interest in Oxbridge Reinsurance Limited, an exempted entity incorporated on April 23, 2013 under the laws of the Cayman Islands and for which a Class “C” Insurer’s license was granted on April 29, 2013 under the provisions of the Cayman Islands Insurance Law. Oxbridge Re Holdings Limited also owns 100% of the equity interest in Oxbridge Re NS, an entity incorporated as an exempted company on December 22, 2017 under the laws of the Cayman Islands to function as a reinsurance sidecar facility and to increase the underwriting capacity of Oxbridge Reinsurance Limited. The Company, through its subsidiaries (collectively “Oxbridge Re”) provides collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities. The Company operates as a single business segment through its wholly-owned subsidiaries. The Company’s headquarters and principal executive offices are located at Suite 201, 42 Edward Street, Georgetown, Grand Cayman, Cayman Islands, and have their registered offices at P.O. Box 309, Ugland House, Grand Cayman, Cayman Islands. The Company’s ordinary shares and warrants are listed on The NASDAQ Capital Market under the symbols “OXBR” and “OXBRW,” respectively. (b) Basis of Presentation and Consolidation The accompanying unaudited, consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and the Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations for any subsequent interim period or for thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Form 10-K, which was filed with the SEC on March 19, 2019 In preparing the interim unaudited consolidated financial statements, management was required to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective and complex and consequently actual results may differ from these estimates, which would be reflected in future periods. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the reserve for losses and loss adjustment expenses, which include amounts estimated for claims incurred but not yet reported. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make these estimates. In addition, accounting policies specific to valuation of investments and assessment of other-than-temporary impairment (“OTTI”) may involve significant judgments and estimates material to the Company’s consolidated financial statements. The Company consolidates in these consolidated financial statements the results of operations and financial position of all voting interest entities (“VOE”) in which the Company has a controlling financial interest and all variable interest entities (“VIE”) in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity. All significant intercompany balances and transactions have been eliminated. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Cash and cash equivalents: Restricted cash and cash equivalents: Investments : Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the consolidated statements of operations. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security. The Company reviews all fixed-maturity securities for other-than-temporary impairment on a quarterly basis and more frequently when economic or market conditions warrant such review. When the fair value of any investment is lower than its cost, an assessment is made to see whether the decline is temporary or other-than-temporary. If the decline is determined to be other-than-temporary the investment is written down to fair value and an impairment charge is recognized in operations in the period in which the Company makes such determination. For a fixed-maturity security that the Company does not intend to sell nor is it more likely than not that the Company will be required to sell before recovery of its amortized cost, only the credit loss component is recognized in operations, while impairment related to all other factors is recognized in other comprehensive income. The Company considers various factors in determining whether an individual security is other-than-temporarily impaired. Fair value measurement Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Inputs that are unobservable. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For fixed maturity securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in stocks and exchange-traded funds is based on the last traded price. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company’s investment custodians. The investment custodians consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument. Derivative Financial Instruments: Deferred policy acquisition costs (“DAC”): Property and equipment: Allowance for uncollectible receivables: Reserves for losses and loss adjustment expenses: Loss experience refund payable: Premiums assumed: Subsequent adjustments of premiums assumed, based on reports of actual premium by the ceding companies, or revisions in estimates of ultimate premium, are recorded in the period in which they are determined. Such adjustments are generally determined after the associated risk periods have expired, in which case the premium adjustments are fully earned when assumed. Certain contracts may allow for reinstatement premiums in the event of a full limit loss prior to the expiration of the contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with GAAP, the Company records a reinstatement premium as written only in the event that the reinsured incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums are earned over the remaining coverage period. Unearned Premiums Ceded: Ceded premiums are written during the period in which the risk incept and are expensed over the contract period in proportion to the period of protection. Unearned premiums ceded consist of the unexpired portion of the reinsurance obtained. Uncertain income tax positions: For income tax positions meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements, if any, is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The application of this authoritative guidance has had no effect on the Company’s consolidated financial statements because the Company had no uncertain tax positions at September 30, 2019. (Loss) Earnings Per Share: Basic (loss) earnings per share has been computed on the basis of the weighted-average number of ordinary shares outstanding during the periods presented. Diluted (loss) earnings per share is computed based on the weighted-average number of ordinary shares outstanding and reflects the assumed exercise or conversion of diluted securities, such as stock options and warrants, computed using the treasury stock method. Stock-Based Compensation The Company uses the straight-line attribution method for all grants that include only a service condition. Compensation expense related to all awards is included in general and administrative expenses. Recent Adopted Accounting Pronouncements Accounting Standards Update No. 2016-02. For operating leases, the asset and liability are expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability is recognized separately from the amortization of the right-of-use asset in the consolidated statement of comprehensive operations and the repayment of the principal portion of the lease liability is classified as a financing activity while the interest component is included in the operating section of the consolidated statement of cash flows. We adopted ASU 2016-02, ASU 2018-10 Codification Improvements to Topic 842: Leases Leases (Topic 842): Targeted Improvements Pending Accounting Updates: Accounting Standards Update No. 2016-13. . Accounting Standards Update No. 2018-13. Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) Segment Information Reclassifications: |
Cash and Cash Equivalents and R
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | At September 30, At December 31, 2019 2018 (in thousands) Cash on deposit $ 3,468 $ 3,965 Cash held with custodians 2,669 4,109 Restricted cash held in trust 1,915 3,225 Total $ 8,052 $ 11,299 Cash and cash equivalents are held by large and reputable counterparties in the United States of America and in the Cayman Islands. Restricted cash held in trust is custodied with SunTrust Bank and is held in accordance with the Company’s trust agreements with the ceding insurers and trustees, which require that the Company provide collateral having a market value greater than or equal to the limit of liability, less unpaid premium. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | The Company from time to time invests in fixed-maturity securities and equity securities, with its fixed-maturity securities classified as available-for-sale. At September 30, 2019, the Company did not hold any available-for-sale securities. At December 31, 2018, the cost or amortized cost, gross unrealized gains and losses, and estimated fair value of the Company’s available-for-sale securities by security type were as follows: Cost or Gross Gross Estimated ($ in thousands) As of December 31, 2018 Fixed-maturity securities U.S. Treasury and agency securities $ 991 $ 2 $ - $ 993 At December 31, 2018, available-for-sale securities with fair value of $993,000, was held in trust accounts as collateral under reinsurance contacts with the Company’s ceding insurers. All of the Company's available for sale securities had scheduled contractual maturities after one year and through five years at December 31, 2018. There were no sales of available-for-sale fixed maturity or equity securities during the three-month period ended September 30, 2019. Proceeds received, and the gross realized gains and losses from sales of available-for-sale fixed-maturity securities, and equity securities, for the nine months ended September 30, 2019 and the three-months and nine-months ended September 30, 2018 were as follows: Gross proceeds from sales Gross Gross ($ in thousands) Nine Months Ended September 30, 2019 Available-for-sale fixed-maturity securities $ 994 $ 3 $ - Three Months Ended September 30, 2018 Available-for-sale fixed-maturity securities $ 1,565 $ 3 $ - Equity securities $ 1,583 $ 57 $ (121 ) Nine Months Ended September 30, 2018 Available-for-sale fixed-maturity securities $ 4,565 $ 3 $ - Equity securities $ 7,616 $ 475 $ (715 ) The Company regularly reviews its individual investment securities for OTTI. The Company from time to time may hold debt securities or may consider various factors in determining whether each individual debt security is other-than-temporarily impaired, including: ● the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or income; ● the length of time and the extent to which the market value of the security has been below its cost or amortized cost; ● general market conditions and industry or sector specific factors; ● nonpayment by the issuer of its contractually obligated interest and principal payments; and ● the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs. At December 31, 2018, there were no available-for-sale securities in an unrealized loss position. Assets Measured at Estimated Fair Value on a Recurring Basis The following table presents information about the Company’s financial assets measured at estimated fair value on a recurring basis that is reflected in the consolidated balance sheets at carrying value. The table indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of September 30, 2019 and December 31, 2018: Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total As of September 30, 2019 ($ in thousands) Financial Assets: Cash and cash equivalents $ 6,137 $ - $ - $ 6,137 Restricted cash and cash equivalents $ 1,915 $ - $ - $ 1,915 Total equity securities 584 - - 584 Total $ 8,636 $ - $ - $ 8,636 Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total As of December 31, 2018 ($ in thousands) Financial Assets: Cash and cash equivalents $ 8,074 $ - $ - $ 8,074 Restricted cash and cash equivalents $ 3,225 $ - $ - $ 3,225 U.S. Treasury and agency securities - 993 - 993 Total fixed-maturity securities - 993 - 993 Total equity securities 162 - - 162 Total available for sale securities 162 993 - 1,155 Total $ 11,461 $ 993 $ - $ 12,454 There were no transfers between Levels 1, 2 and 3 during the three and nine months ended September 30, 2019 and 2018. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instrument Detail [Abstract] | |
Derivative Instruments | Inward Industry Loss Warranty ("ILW") Swap In January 2018, the Company entered into an inward ILW swap (the "2018 Inward ILW Swap") with a third-party under which qualifying loss payments are triggered by reference to the level of losses incurred by the insurance industry as a whole, rather than by losses incurred by the insured. In return for a fixed payment received of $1 million, the Company was required to make a floating payment in the event of certain losses incurred from specified natural catastrophes in North America, Caribbean, Europe, Japan, Australia, New Zealand and Latin America from January 2018 to December 2018. The Company’s maximum payment obligation under the 2018 Inward ILW Swap was $4 million. The ILW Swap expired on December 31, 2018 and the Company did not renew the ILW Swap during the nine-month period ending September 30, 2019. During the nine months ending September 30, 2019, the Company settled its payment obligation of $4 million under the 2018 Inward ILW Swap. |
Taxation
Taxation | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxation | Under current Cayman Islands law, no corporate entity, including the Company and the subsidiaries, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company and its subsidiaries have an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to the Company and its subsidiaries or their operations, or to the ordinary shares or related obligations, until April 23, 2033 and May 17, 2033, respectively. The Company and its subsidiaries intend to conduct substantially all of their operations in the Cayman Islands in a manner such that they will not be engaged in a trade or business in the U.S. However, because there is no definitive authority regarding activities that constitute being engaged in a trade or business in the U.S. for federal income tax purposes, the Company cannot assure that the U.S. Internal Revenue Service will not contend, perhaps successfully, that the Company or its subsidiary is engaged in a trade or business in the U.S. A foreign corporation deemed to be so engaged would be subject to U.S. federal income tax, as well as branch profits tax, on its income that is treated as effectively connected with the conduct of that trade or business unless the corporation is entitled to relief under an applicable tax treaty. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Variable Interest Entities | Oxbridge Re NS. The Company has determined that Oxbridge Re NS meets the definition of a VIE as it does not have sufficient equity capital to finance its activities. The Company concluded that it is the primary beneficiary and has consolidated the subsidiary upon its formation, as it owns 100% of the voting shares, 100% of the issued share capital and has a significant financial interest and the power to control the activities of Oxbridge Re NS that most significantly impacts its economic performance. The Company has no other obligation to provide financial support to Oxbridge Re NS. Neither the creditors nor beneficial interest holders of Oxbridge Re NS have recourse to the Company’s general credit. Upon issuance of a series of participating notes by Oxbridge Re NS, all of the proceeds from the issuance are deposited into collateral accounts, to fund any potential obligation under the reinsurance agreements entered into with Oxbridge Reinsurance Limited underlying such series of notes. The outstanding principal amount of each series of notes generally is expected to be returned to holders of such notes upon the expiration of the risk period underlying such notes, unless an event occurs which causes a loss under the applicable series of notes, in which case the amount returned is expected to be reduced by such noteholder's pro rata share of such loss, as specified in the applicable governing documents of such notes. In addition, holders of such notes are generally entitled to interest payments, payable annually, as determined by the applicable governing documents of each series of notes. Oxbridge Re Holdings Limited receives an origination and structuring fee in connection with the formation, operation and management of Oxbridge Re NS. Notes Payable to Series 2019-1 noteholders Oxbridge Re NS entered into a retrocession agreement with Oxbridge Reinsurance Ltd on June 1, 2019 and issued $600 thousand of participating notes which provides quota share support for Oxbridge Re’s global property catastrophe excess of loss reinsurance business. The participating notes have been assigned Series 2019-1 and are due to mature on June 1, 2022. None of the participating notes were redeemed during the period ending September 30, 2019. The income from Oxbridge Re NS operations that are attributable to the participating notes noteholders for the three and nine month ended September 30, 2019 was $70,000 and $94,000 respectively and are included within accounts payable and other liabilities as at September 30, 2019. Notes Payable to Series 2018-1 noteholders Oxbridge Re NS issued $2 million of participating notes on June 1, 2018, all of which were issued to third parties and which provides quota share support for Oxbridge Re’s global property catastrophe excess of loss reinsurance business. The operations of Oxbridge Re NS commenced on June 1, 2018. The participating notes were due to mature on June 1, 2021. However, during the quarter ending December 31, 2018, the participating notes were triggered, and suffered full loss, and as a result, these notes were subsequently redeemed and cancelled. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Insurance [Abstract] | |
Resserve for Losses and Loss Adjustment Expenses | The following table summarizes the Company’s loss and loss adjustment expenses (“LAE”) and the reserve for loss and LAE reserve movements for the three and nine-month periods ending September 30, 2019 and 2018: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) Balance, beginning of period $ 107 167 $ 4,108 4,836 Incurred related to: Current period - - - - Prior period 1 - - - (1,012 ) Total incurred - - - (1,012 ) Paid related to: Current period - - - - Prior period - - (4,001 ) (3,657 ) Total paid - - (4,001 ) (3,657 ) Net balance, end of period $ 107 167 $ 107 167 Add: reinsurance recoverable - - - - Gross balance, end of period $ 107 167 $ 107 167 The reserves for losses and LAE are comprised of case reserves (which are based on claims that have been reported) and IBNR reserves (which are based on losses that are believed to have occurred but for which claims have not yet been reported and include a provision for expected future development on existing case reserves). The Company uses the assistance of an independent actuary in the determination of IBNR and expected future development of existing case reserves. The uncertainties inherent in the reserving process and potential delays by cedants and brokers in the reporting of loss information, together with the potential for unforeseen adverse developments, may result in the reserve for losses and LAE ultimately being significantly greater or less than the reserve provided at the end of any given reporting period. The degree of uncertainty is further increased when a significant loss event takes place near the end of a reporting period. Reserve for losses and LAE estimates are reviewed periodically on a contract by contract basis and updated as new information becomes known. Any resulting adjustments are reflected in operations in the period in which they become known. The Company’s reserving process is highly dependent on the timing of loss information received from its cedants and related brokers. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | A summary of the numerator and denominator of the basic and diluted (loss) earnings per share is presented below (dollars in thousands except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net (loss) earnings $ (15 ) 652 $ (366 ) 706 Denominator: Weighted average shares - basic 5,733,587 5,733,587 5,733,587 5,733,587 Effect of dilutive securities - Stock options - - - - Shares issuable upon conversion of warrants - - - - Weighted average shares - diluted 5,733,587 5,733,587 5,733,587 5,733,587 (Loss)/earnings per shares - basic $ (0.00 ) 0.11 $ (0.06 ) 0.12 (Loss)/earnings per shares - diluted $ (0.00 ) 0.11 $ (0.06 ) 0.12 For the three and nine-month periods ended September 30, 2019, options to purchase 540,000 ordinary shares, were anti-dilutive due to net loss during the periods presented. F For the three and nine-month periods ended September 30, 2019, 8,230,700 warrants to purchase an aggregate of 8,230,700 ordinary shares were anti-dilutive due to net loss during the periods presented. GAAP requires the Company to use the two-class method in computing basic (loss) earnings per share since holders of the Company’s restricted stock have the right to share in dividends, if declared, equally with common stockholders. These participating securities effect the computation of both basic and diluted (loss) earnings per share during periods of net (loss) earnings. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | On February 28, 2014, the Company’s Registration Statement on Form S-1, as amended, relating to the initial public offering of the Company’s units was declared effective by the SEC. The Registration Statement covered the offer and sale by the Company of 4,884,650 units, each consisting of one ordinary share and one warrant (“Unit”), which were sold to the public on March 26, 2014 at a price of $6.00 per Unit. The ordinary shares and warrants comprising the Units began separate trading on May 9, 2014. The ordinary shares and warrants are traded on the Nasdaq Capital Market under the symbols “OXBR” and “OXBRW,” respectively. One warrant may be exercised to acquire one ordinary share at an exercise price equal to $7.50 per share on or before March 26, 2024, as amended. At any time after September 26, 2014 and before the expiration of the warrants, the Company at its option may cancel the warrants in whole or in part, provided that the closing price per ordinary share has exceeded $9.38 for at least ten trading days within any period of twenty consecutive trading days, including the last trading day of the period. The initial public offering resulted in aggregate gross proceeds to the Company of approximately $29.3 million (of which approximately $5 million related to the fair value proceeds on the warrants issued) and net proceeds of approximately $26.9 million after deducting underwriting commissions and offering expenses. There were 8,230,700 warrants outstanding at September 30, 2019 and 2018. No warrants were exercised during the three and nine-month periods ended September 30, 2019 and 2018. As of September 30, 2019, none of the Company’s retained earnings were restricted from payment of dividends to the company’s shareholders. However, since most of the Company’s capital and retained earnings may be invested in its subsidiaries, a dividend from the subsidiaries would likely be required in order to fund a dividend to the Company’s shareholders and would require notification to the Cayman Islands Monetary Authority (“CIMA”). Under Cayman Islands law, the use of additional paid-in capital is restricted, and the Company will not be allowed to pay dividends out of additional paid-in capital if such payments result in breaches of the prescribed and minimum capital requirement. See also Note 12. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | The Company currently has outstanding stock-based awards granted under the 2014 Omnibus Incentive Plan (the “Plan”). At September 30, 2019, there were 400,000 shares available for grant under the Plan. Stock options The Company accounts for share-based compensation under the fair value recognition provisions of ASC Topic 718 – “Compensation – Stock Compensation.” Stock options granted and outstanding under the Plan vests quarterly over four years and are exercisable over the contractual term of ten years. A summary of the stock option activity for the three and nine-month periods ended September 30, 2019 and 2018 is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2019 250,000 Granted 290,000 $ 2.00 Outstanding at March 31, 2019 540,000 $ 3.86 8.1 years $ - Outstanding at June 30, 2019 540,000 $ 3.86 7.9 years $ - Outstanding at September 30, 2019 540,000 $ 3.86 7.6 years $ - Exercisable at September 30, 2019 291,250 $ 5.26 6.3 years $ - Outstanding at January 1, 2018 250,000 $ 6.01 Outstanding at March 31, 2018 250,000 $ 6.01 7.2 years $ - Outstanding at June 30, 2018 250,000 $ 6.01 6.9 years $ - Outstanding at September 30, 2018 250,000 $ 6.01 6.7 years $ - Exercisable at September 30, 2018 208,125 $ 6.01 6.7 years $ - Compensation expense recognized for the three-month periods ended September 30, 2019 and 2018 totaled $9,000 and for the nine-month periods ended September 30, 2019 and 2018, totaled $27,000 and $29,000 respectively. Compensation expense is included in general and administrative expenses. At September 30, 2019 and 2018, there was approximately $95,000 and $25,000, respectively, of total unrecognized compensation expense related to non-vested stock options granted under the Plan. T There were no options granted during the three and nine-month period ended September 30, 2018 and during the three months ended September 30, 2019. During the nine-month period ended September 30, 2019 the Company granted 290,000 options with fair value estimated on the date of grant using the following assumptions and the Black-Scholes option pricing model: 2019 Expected dividend yield 0 % Expected volatility 31 % Risk-free interest rate 3 % Expected life (in years) 10 Per share grant date fair value of options issued $ 0.36 At the time of the grant, the dividend yield was based on the Company’s history and expectation of dividend payouts at the time of the grant; expected volatility was based on volatility of similar companies’ common stock as described in Note 1; the risk-free rate was based on the U.S. Treasury yield curve in effect and the expected life was based on the contractual life of the options. Restricted Stock Awards The Company has granted and may grant restricted stock awards to eligible individuals in connection with their service to the Company. The terms of the Company’s outstanding restricted stock grants may include service, performance and market-based conditions. The fair value of any awards with market-based conditions is determined using a Monte Carlo simulation method, which calculates many potential outcomes for an award and then establishes fair value based on the most likely outcome. The determination of fair value with respect to the awards with only performance or service-based conditions is based on the value of the Company’s stock on the grant date. During the three and nine-month periods ended September 30, 2019 and 2018, the Company did not grant any restricted stock. At September 30, 2019, there were no unvested restricted stock. Compensation expense recognized for the three-month periods ended September 30, 2019 and 2018 totaled $0 and $22,000 respectively, and for the nine-month periods ended September 30, 2019 and 2018 totaled $0 and $65,000 respectively. Compensation expense is included in general and administrative expenses. At September 30, 2019 and 2018, there was approximately $0 and $22,000, respectively, of total unrecognized compensation expense related to non-vested restricted stock granted under the Plan. |
Net Worth for Regulatory Purpos
Net Worth for Regulatory Purposes | 9 Months Ended |
Sep. 30, 2019 | |
Net Worth For Regulatory Purposes | |
Net Worth for Regulatory Purposes | The subsidiaries are subject to a minimum and prescribed capital requirement as established by CIMA. Under the terms of their respective licenses, Oxbridge Reinsurance Limited and Oxbridge Re NS are required to maintain a minimum and prescribed capital requirement of $500 in accordance with the relevant subsidiary’s approved business plan filed with CIMA. At September 30, 2019, the Oxbridge Reinsurance Limited’s net worth of $1.5 million exceeded the minimum and prescribed capital requirement. For the three and nine-month periods ended September 30, 2019, the Subsidiary’s net loss was approximately $159 thousand and $754 thousand respectively. At September 30, 2019, the Oxbridge Re NS’ net worth of $79 thousand exceeded the minimum and prescribed capital requirement. For the three and nine-month periods ended September 30, 2019, the Subsidiary’s net income was approximately $30 thousand and $61 thousand respectively. The Subsidiaries are not required to prepare separate statutory financial statements for filing with CIMA, and there were no material differences between the Subsidiaries' GAAP capital, surplus and net income, and its statutory capital, surplus and net income as of September 30, 2019 or for the period then ended. |
Fair Value and Certain Risks an
Fair Value and Certain Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value and Certain Risks and Uncertainties | Fair values With the exception of balances in respect of insurance contracts (which are specifically excluded from fair value disclosures under GAAP) and investment securities and derivative instruments as disclosed in Note 4 and 5 of these consolidated financial statements, the carrying amounts of all other financial instruments, which consist of cash and cash equivalents, restricted cash and cash equivalents, accrued interest and dividends receivable, premiums receivable and other assets and accounts payable and other liabilities, approximate their fair values due to their short-term nature. Concentration of underwriting risk As the Company’s current reinsurance business ultimately relates to the risks of a limited number of entities, the Company’s underwriting risks are not significantly diversified. Concentrations of Credit and Counterparty Risk The Company’s derivative instruments are subject to counterparty risk. The Company routinely monitor this risk. The Company may market retrocessional and reinsurance policies worldwide through its brokers. Credit risk exists to the extent that any of these brokers may be unable to fulfill their contractual obligations to the Company. For example, the Company is required to pay amounts owed on claims under policies to brokers, and these brokers, in the Company. In some jurisdictions, if a broker fails to make such a payment, the Company might remain liable to the ceding company for the deficiency. In addition, in certain jurisdictions, when the ceding company pays premiums for these policies to brokers, these premiums are considered to have been paid and the ceding insurer is no longer liable to the Company for those amounts, whether or not the premiums have actually been received. The Company remains liable for losses it incurs to the extent that any third-party reinsurer is unable or unwilling to make timely payments under reinsurance agreements. The Company would also be liable in the event that its ceding companies were unable to collect amounts due from underlying third-party reinsurers. The Company mitigates its concentrations of credit and counterparty risk by using reputable and several counterparties which decreases the likelihood of any significant concentration of credit risk with any one counterparty. Additionally, the Company invests in fixed maturity securities that are investment grade or higher. Market risk Market risk exists to the extent that the values of the Company’s monetary assets fluctuate as a result of changes in market prices. Changes in market prices can arise from factors specific to individual securities or their respective issuers, or factors affecting all securities traded in a particular market. Relevant factors for the Company are both volatility and liquidity of specific securities and markets in which the Company holds investments. The Company has established investment guidelines that seek to mitigate significant exposure to market risk. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | We adopted ASU 2016-02, Leases on January 1, 2019, which resulted in the recognition of operating leases on the consolidated balance sheet in 2019 and forward. See Note 2 – Significant Accounting Policies for more information on the adoption of the ASU. Right-of-use assets and lease liabilities are disclosed as line in the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements that have lease and non-lease components, are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term. The Company’s operating lease obligations are for the Company’s office facilities. Our lease have remaining lease terms of approximately 53 months, and include an option to extend the lease. Under the terms of the lease, the Company also has the right to terminate the lease after thirty-six (36) months upon giving appropriate notice in writing to the Lessor. The components of lease expense and other lease information as of and during the three and nine-month period ended September 30, 2019 are as follows: For the For the (in thousands) Ended Ended Operating Lease Cost (1) $ 22 $ 63 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 22 $ 71 (1) (in thousands) At September 30, 2019 Operating lease right-of-use assets $ 140 Operating lease liabilities $ 140 Weighted-average remaining lease term - operating leases 4.42 years Weighted-average discount rate - operating leases 6.5 % Future minimum lease payments under non-cancellable leases as of September 30, 2019, reconciled to our discounted operating lease liability presented on the consolidated balance sheet are as follows: (in thousands) At At Remainder of 2019 $ 9 $ - 2020 36 - 2021 36 - 2022 37 - 2023 37 - Thereafter 6 - Total future minimum lease payments $ 161 $ - Less imputed interest (21 ) N/A Total operating lease liability $ 140 N/A |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The Company had entered into reinsurance agreements with Claddaugh, which is a related entity through common directorships. At September 30, 2019 and December 31, 2018, there were no related-party amounts included within loss experience refund payable and unearned premium reserve on the consolidated balance sheets. During the three and nine-month periods ended September 30, 2019 and 2018, included within change in loss experience refund payable and change in unearned premiums reserve on the consolidated statements of operations are the following related-party amounts: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Revenue Assumed premiums - - - - Change in loss experience refund payable - - - (225 ) Change in unearned premiums reserve - - - 592 During the nine-month period ending September 30, 2019, Mr. Jay Madhu, a director and officer of the Company and its subsidiaries invested $50 thousand in Series 2019-1 participating notes. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | We evaluate all subsequent events and transactions for potential recognition or disclosure in our consolidated financial statements. There were no other events subsequent to September 30, 2019 for which disclosure was required. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Cash and cash equivalents | Cash and cash equivalents: |
Restricted cash and cash equivalents | Restricted cash and cash equivalents: |
Investments | Investments : Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the consolidated statements of operations. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security. The Company reviews all fixed-maturity securities for other-than-temporary impairment on a quarterly basis and more frequently when economic or market conditions warrant such review. When the fair value of any investment is lower than its cost, an assessment is made to see whether the decline is temporary or other-than-temporary. If the decline is determined to be other-than-temporary the investment is written down to fair value and an impairment charge is recognized in operations in the period in which the Company makes such determination. For a fixed-maturity security that the Company does not intend to sell nor is it more likely than not that the Company will be required to sell before recovery of its amortized cost, only the credit loss component is recognized in operations, while impairment related to all other factors is recognized in other comprehensive income. The Company considers various factors in determining whether an individual security is other-than-temporarily impaired. |
Fair value measurement | Fair value measurement Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Inputs that are unobservable. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For fixed maturity securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in stocks and exchange-traded funds is based on the last traded price. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company’s investment custodians. The investment custodians consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument. |
Derivative financial instruments | Derivative Financial Instruments: |
Deferred policy acquisition costs ("DAC") | Deferred policy acquisition costs (“DAC”): |
Property and equipment | Property and equipment: |
Allowance for uncollectible receivables | Allowance for uncollectible receivables: |
Reserves for losses and loss adjustment expenses | Reserves for losses and loss adjustment expenses: |
Loss experience refund payable | Loss experience refund payable: |
Premiums assumed | Premiums assumed: Subsequent adjustments of premiums assumed, based on reports of actual premium by the ceding companies, or revisions in estimates of ultimate premium, are recorded in the period in which they are determined. Such adjustments are generally determined after the associated risk periods have expired, in which case the premium adjustments are fully earned when assumed. Certain contracts may allow for reinstatement premiums in the event of a full limit loss prior to the expiration of the contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with GAAP, the Company records a reinstatement premium as written only in the event that the reinsured incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums are earned over the remaining coverage period. |
Unearned premiums ceded | Unearned Premiums Ceded: Ceded premiums are written during the period in which the risk incept and are expensed over the contract period in proportion to the period of protection. Unearned premiums ceded consist of the unexpired portion of the reinsurance obtained. |
Uncertain income tax positions | Uncertain income tax positions: For income tax positions meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements, if any, is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The application of this authoritative guidance has had no effect on the Company’s consolidated financial statements because the Company had no uncertain tax positions at September 30, 2019. |
(Loss) earnings per share | (Loss) Earnings Per Share: Basic (loss) earnings per share has been computed on the basis of the weighted-average number of ordinary shares outstanding during the periods presented. Diluted (loss) earnings per share is computed based on the weighted-average number of ordinary shares outstanding and reflects the assumed exercise or conversion of diluted securities, such as stock options and warrants, computed using the treasury stock method. |
Stock-based compensation | Stock-Based Compensation The Company uses the straight-line attribution method for all grants that include only a service condition. Compensation expense related to all awards is included in general and administrative expenses. |
Recent accounting pronouncements | Recent Adopted Accounting Pronouncements Accounting Standards Update No. 2016-02. For operating leases, the asset and liability are expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability is recognized separately from the amortization of the right-of-use asset in the consolidated statement of comprehensive operations and the repayment of the principal portion of the lease liability is classified as a financing activity while the interest component is included in the operating section of the consolidated statement of cash flows. We adopted ASU 2016-02, ASU 2018-10 Codification Improvements to Topic 842: Leases Leases (Topic 842): Targeted Improvements Pending Accounting Updates: Accounting Standards Update No. 2016-13. . Accounting Standards Update No. 2018-13. Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) |
Segment information | Segment Information |
Reclassifications | Reclassifications: |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash and cash equivalents and restricted cash and cash equivalents | At September 30, At December 31, 2019 2018 (in thousands) Cash on deposit $ 3,468 $ 3,965 Cash held with custodians 2,669 4,109 Restricted cash held in trust 1,915 3,225 Total $ 8,052 $ 11,299 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of available-for-sale securities | Cost or Gross Gross Estimated ($ in thousands) As of December 31, 2018 Fixed-maturity securities U.S. Treasury and agency securities $ 991 $ 2 $ - $ 993 |
Summary of proceeds received, and gross realized gains and losses from sales of available-for-sale securities | Gross proceeds from sales Gross Gross ($ in thousands) Nine Months Ended September 30, 2019 Available-for-sale fixed-maturity securities $ 994 $ 3 $ - Three Months Ended September 30, 2018 Available-for-sale fixed-maturity securities $ 1,565 $ 3 $ - Equity securities $ 1,583 $ 57 $ (121 ) Nine Months Ended September 30, 2018 Available-for-sale fixed-maturity securities $ 4,565 $ 3 $ - Equity securities $ 7,616 $ 475 $ (715 ) |
Fair value of assets measured on recurring basis | Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total As of September 30, 2019 ($ in thousands) Financial Assets: Cash and cash equivalents $ 6,137 $ - $ - $ 6,137 Restricted cash and cash equivalents $ 1,915 $ - $ - $ 1,915 Total equity securities 584 - - 584 Total $ 8,636 $ - $ - $ 8,636 Fair Value Measurements Using (Level 1) (Level 2) (Level 3) Total As of December 31, 2018 ($ in thousands) Financial Assets: Cash and cash equivalents $ 8,074 $ - $ - $ 8,074 Restricted cash and cash equivalents $ 3,225 $ - $ - $ 3,225 U.S. Treasury and agency securities - 993 - 993 Total fixed-maturity securities - 993 - 993 Total equity securities 162 - - 162 Total available for sale securities 162 993 - 1,155 Total $ 11,461 $ 993 $ - $ 12,454 |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Insurance [Abstract] | |
Summary of loss and loss adjustment expenses | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) Balance, beginning of period $ 107 167 $ 4,108 4,836 Incurred related to: Current period - - - - Prior period 1 - - - (1,012 ) Total incurred - - - (1,012 ) Paid related to: Current period - - - - Prior period - - (4,001 ) (3,657 ) Total paid - - (4,001 ) (3,657 ) Net balance, end of period $ 107 167 $ 107 167 Add: reinsurance recoverable - - - - Gross balance, end of period $ 107 167 $ 107 167 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted (loss) earnings per share | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net (loss) earnings $ (15 ) 652 $ (366 ) 706 Denominator: Weighted average shares - basic 5,733,587 5,733,587 5,733,587 5,733,587 Effect of dilutive securities - Stock options - - - - Shares issuable upon conversion of warrants - - - - Weighted average shares - diluted 5,733,587 5,733,587 5,733,587 5,733,587 (Loss)/earnings per shares - basic $ (0.00 ) 0.11 $ (0.06 ) 0.12 (Loss)/earnings per shares - diluted $ (0.00 ) 0.11 $ (0.06 ) 0.12 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2019 250,000 Granted 290,000 $ 2.00 Outstanding at March 31, 2019 540,000 $ 3.86 8.1 years $ - Outstanding at June 30, 2019 540,000 $ 3.86 7.9 years $ - Outstanding at September 30, 2019 540,000 $ 3.86 7.6 years $ - Exercisable at September 30, 2019 291,250 $ 5.26 6.3 years $ - Outstanding at January 1, 2018 250,000 $ 6.01 Outstanding at March 31, 2018 250,000 $ 6.01 7.2 years $ - Outstanding at June 30, 2018 250,000 $ 6.01 6.9 years $ - Outstanding at September 30, 2018 250,000 $ 6.01 6.7 years $ - Exercisable at September 30, 2018 208,125 $ 6.01 6.7 years $ - |
Estimated fair value of options granted using black-scholes option-pricing model with weighted-average assumptions | 2019 Expected dividend yield 0 % Expected volatility 31 % Risk-free interest rate 3 % Expected life (in years) 10 Per share grant date fair value of options issued $ 0.36 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating lease obligations | For the For the (in thousands) Ended 2019 Ended 2019 Operating Lease Cost (1) $ 22 $ 63 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 22 $ 71 (1) (in thousands) At 2019 Operating lease right-of-use assets $ 140 Operating lease liabilities $ 140 Weighted-average remaining lease term - operating leases 4.42 years Weighted-average discount rate - operating leases 6.5 % |
Future minimum lease payments | (in thousands) At At Remainder of 2019 $ 9 $ - 2020 36 - 2021 36 - 2022 37 - 2023 37 - Thereafter 6 - Total future minimum lease payments $ 161 $ - Less imputed interest (21 ) N/A Total operating lease liability $ 140 N/A |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Summary of related party transactions | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Revenue Assumed premiums - - - - Change in loss experience refund payable - - - (225 ) Change in unearned premiums reserve - - - 592 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) | 9 Months Ended |
Sep. 30, 2019Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Equity method investment, ownership percentage | 100.00% |
Number of business operating segments | 1 |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Sep. 30, 2019 | |
Furniture and Fixtures | |
Fixed asset, estimated useful life | 5 years |
Computer Equipment | |
Fixed asset, estimated useful life | 5 years |
Motor Vehicles | |
Fixed asset, estimated useful life | 4 years |
Cash and Cash Equivalents and_3
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Abstract] | ||
Cash on deposit | $ 3,468 | $ 3,965 |
Cash held with custodians | 2,669 | 4,109 |
Restricted cash held in trust | 1,915 | 3,225 |
Total | $ 8,052 | $ 11,299 |
Investments (Details)
Investments (Details) - US Treasury and Government $ in Thousands | Dec. 31, 2018USD ($) |
Cost or amortized cost, total available-for-sale securities | $ 991 |
Gross unrealized gain, total available-for-sale securities | 2 |
Gross unrealized loss, total available-for-sale securities | 0 |
Estimated fair value, total available-for-sale securities | $ 993 |
Investments (Details 1)
Investments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fixed Maturities | |||
Gross proceeds from sales | $ 1,565 | $ 4,565 | |
Gross realized gains | 3 | 3 | |
Gross realized losses | 0 | 0 | |
Equity Securities | |||
Gross proceeds from sales | 1,583 | $ 994 | 7,616 |
Gross realized gains | 57 | 3 | 475 |
Gross realized losses | $ (121) | $ 0 | $ (715) |
Investments (Details 2)
Investments (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Restricted cash and cash equivalents | $ 1,915 | $ 3,225 |
Total securities | 1,155 | |
Total | 8,636 | 12,454 |
Fair Value, Measurements, Recurring | ||
Cash and cash equivalents | 6,137 | 8,074 |
Restricted cash and cash equivalents | 1,915 | 3,225 |
Fair Value, Measurements, Recurring | Fixed Maturities | ||
Total available-for-sale securities | 993 | |
Fair Value, Measurements, Recurring | Fixed Maturities | US Treasury and Government | ||
Total available-for-sale securities | 993 | |
Fair Value, Measurements, Recurring | Equity Securities | ||
Total equity securities | 584 | 162 |
Fair Value, Inputs, Level 1 | ||
Total securities | 162 | |
Total | 8,636 | 12,454 |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | ||
Cash and cash equivalents | 6,137 | 8,074 |
Restricted cash and cash equivalents | 1,915 | 3,225 |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Fixed Maturities | ||
Total available-for-sale securities | 0 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Fixed Maturities | US Treasury and Government | ||
Total available-for-sale securities | 0 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Equity Securities | ||
Total equity securities | 584 | 162 |
Fair Value, Inputs, Level 2 | ||
Total securities | 993 | |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Fixed Maturities | ||
Total available-for-sale securities | 993 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Fixed Maturities | US Treasury and Government | ||
Total available-for-sale securities | 993 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Equity Securities | ||
Total equity securities | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Total securities | 0 | |
Total | 0 | 0 |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Fixed Maturities | ||
Total available-for-sale securities | 0 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Fixed Maturities | US Treasury and Government | ||
Total available-for-sale securities | 0 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Equity Securities | ||
Total equity securities | $ 0 | $ 0 |
Investments (Details Narrative)
Investments (Details Narrative) $ in Thousands | Dec. 31, 2018USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Fair value of securities held in trust accounts | $ 993 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Insurance [Abstract] | ||||
Balance, beginning of period | $ 107 | $ 167 | $ 4,108 | $ 4,836 |
Incurred related to: current period | 0 | 0 | 0 | 0 |
Incurred related to: prior period | 0 | 0 | 0 | (1,012) |
Total incurred | 0 | 0 | 0 | (1,012) |
Paid related to: current period | 0 | 0 | 0 | 0 |
Paid related to: prior period | 0 | 0 | (4,001) | (3,657) |
Total paid | 0 | 0 | (4,001) | (3,657) |
Balance, end of period | 107 | 167 | 107 | 167 |
Add: reinsurance recoverable | 0 | 0 | 0 | 0 |
Gross balance, end of period | $ 107 | $ 167 | $ 107 | $ 167 |
(Loss) Earnings Per Share (Deta
(Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net (loss) earnings | $ (15) | $ (205) | $ (146) | $ 652 | $ 265 | $ (211) | $ (366) | $ 706 |
Denominator: | ||||||||
Weighted average shares - basic | 5,733,587 | 5,733,587 | 5,733,587 | 5,733,587 | ||||
Effect of dilutive securities - stock options | 0 | 0 | 0 | 0 | ||||
Shares issuable upon conversion of warrants | 0 | 0 | 0 | 0 | ||||
Weighted average shares - diluted | 5,733,587 | 5,733,587 | 5,733,587 | 5,733,587 | ||||
(Loss)/earnings per shares - basic | $ (.00) | $ .11 | $ (.06) | $ .12 | ||||
(Loss)/earnings per shares - diluted | $ (.00) | $ .11 | $ (.06) | $ .12 |
(Loss) Earnings Per Share (De_2
(Loss) Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Stock Option | ||||
Antidilutive securities excluded from computation of earnings per share | 540,000 | 250,000 | 540,000 | 250,000 |
Warrants | ||||
Antidilutive securities excluded from computation of earnings per share | 8,230,700 | 8,230,700 | 8,230,700 | 8,230,700 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||||
Number of options outstanding, beginning balance | 540,000 | 540,000 | 250,000 | 250,000 | 250,000 | 250,000 |
Number of options, granted | 290,000 | |||||
Number of options outstanding, ending balance | 540,000 | 540,000 | 540,000 | 250,000 | 250,000 | 250,000 |
Number of options exercisable, ending balance | 291,250 | 208,125 | ||||
Weighted-average exercise price outstanding, beginning balance | $ 3.86 | $ 3.86 | $ 0 | $ 6.01 | $ 6.01 | $ 6.01 |
Weighted-average exercise price, granted | 2 | |||||
Weighted-average exercise price outstanding, ending balance | 3.86 | $ 3.86 | $ 3.86 | 6.01 | $ 6.01 | $ 6.01 |
Weighted-average exercise price exercisable, ending balance | $ 5.26 | $ 6.01 | ||||
Weighted-average remaining contractual term, outstanding ending balance | 7 years 7 months 6 days | 7 years 10 months 24 days | 8 years 1 month 6 days | 6 years 8 months 12 days | 6 years 10 months 24 days | 7 years 2 months 12 days |
Weighted-average remaining contractual term, exercisable ending balance | 6 years 3 months 18 days | 6 years 8 months 12 days | ||||
Aggregate intrinsic value, outstanding ending balance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Aggregate intrinsic value, exercisable ending balance | $ 0 | $ 0 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details 1) - Employee Stock Option | 9 Months Ended |
Sep. 30, 2019$ / shares | |
Expected dividend yield | 0.00% |
Expected volatility | 31.00% |
Risk-free interest rate | 3.00% |
Expected life (in years) | 10 years |
Per share grant date fair value of options issued | $ .36 |
Share-Based Compensation (Det_3
Share-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
General and Administrative Expense | ||||
Stock compensation expense recognized | $ 9 | $ 9 | $ 27 | $ 29 |
General and Administrative Expense | Restricted Stock | ||||
Stock compensation expense recognized | $ 0 | 22 | $ 0 | 65 |
Incentive Stock Option Plan | ||||
Shares available for grant | 400,000 | 400,000 | ||
Share based compensation arrangement, vesting period | 4 years | |||
Unrecognized compensation expense, non-vested stock options | $ 95 | 25 | $ 95 | 25 |
Unrecognized compensation cost, weighted average recognition period | 33 months | |||
Unrecognized compensation expense, non-vested restricted stock | $ 0 | $ 22 | $ 0 | $ 22 |
Net Worth for Regulatory Purp_2
Net Worth for Regulatory Purposes (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Minimum prescribed capital requirement | $ 500 | $ 500 |
Oxbridge Reinsurance Limited | ||
Subsidiary net worth | 1,500 | 1,500 |
Subsidiary's net income (loss) | (159) | (754) |
Oxbridge Re NS | ||
Subsidiary net worth | 79 | 79 |
Subsidiary's net income (loss) | $ 30 | $ 61 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | ||
Leases [Abstract] | |||||
Operating lease cost | [1] | $ 22 | $ 63 | ||
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows from operating leases | 22 | 71 | |||
Operating lease right-of-use assets | 140 | 140 | $ 0 | $ 0 | |
Operating lease liabilities | $ 140 | $ 140 | $ 0 | $ 0 | |
Weighted-average remaining lease term - operating leases | 4 years 5 months 1 day | 4 years 5 months 1 day | |||
Weighted-average discount rate - operating leases | 6.50% | 6.50% | |||
[1] | Includes short-term leases. |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Leases [Abstract] | |||
Remainder 2019 | $ 9 | $ 0 | |
2020 | 36 | 0 | |
2021 | 36 | 0 | |
2022 | 37 | 0 | |
2023 | 37 | 0 | |
Thereafter | 6 | 0 | |
Total future minimum lease payments | 161 | 0 | |
Less imputed interest | (21) | 0 | |
Total operating lease liability | $ 140 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Assumed premiums | $ 0 | $ 47 | $ 1,116 | $ 2,627 |
Change in loss experience refund payable | 0 | 0 | 0 | (225) |
Change in unearned premiums reserve | 279 | 653 | (744) | (1,148) |
Claddaugh And Hcpci | ||||
Revenue | ||||
Assumed premiums | 0 | 0 | 0 | 0 |
Change in loss experience refund payable | 0 | 0 | 0 | (225) |
Change in unearned premiums reserve | $ 0 | $ 0 | $ 0 | $ 592 |