Company: OXBRW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023960
Chunk: 131

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 131
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 we are not permitted to establish loss reserves until the occurrence of an actual loss event. As a result, only loss reserves applicable
to losses incurred up to the reporting date may be recorded, with no allowance for the provision of a contingency reserve to account
for expected future losses. Losses arising from future events, which could be substantial, are estimated and recognized at the time the
loss is incurred.

During
the quarter and six months ended June 30, 2025, the attachment layer reinsured by the Company under one of its contract was
penetrated as a result of adverse loss development from Hurricane Milton. As a result, at June 30, 2025, the Company has recorded a
reserve for losses and LAE of $175,000 based on the contractual maximum loss ($2,293) the Company can suffer under of the contracts,
less advanced payments made during the quarter and six months ended June 30, 2025 relating to loss suffered by Hurricane
Milton. The net impact of the Hurricane Milton’s loss on the Company’s equity, after accounting for the portion of losses borne by
external tokenholders’, is $1.18 million.

Our
reserving methodology does not lend itself well to a statistical calculation of a range of estimates surrounding the best point estimate
of our reserve for loss and loss adjustment expense. Due to the low frequency and high severity nature of claims within much of our business,
our reserving methodology principally involves arriving at a specific point estimate for the ultimate expected loss on a contract-by-contract
basis, and our aggregate loss reserves are the sum of the individual loss reserves established.

Deferred
Acquisition Costs. We defer certain expenses that are directly related to and vary with producing reinsurance business, including
brokerage fees on gross premiums assumed, premium taxes and certain other costs related to the acquisition of reinsurance contracts.
These costs are capitalized and the resulting asset, deferred acquisition costs, is amortized and charged to expense in future periods
as premiums assumed are earned. The method followed in computing deferred acquisition costs limits the amount of such deferral to its
estimated realizable value. The ultimate recoverability of deferred acquisition costs is dependent on the continued profitability of
our reinsurance underwriting. If our underwriting ceases to be profitable, we may have to write off a portion of our deferred acquisition
costs, resulting in a further charge to income in the period in which the underwriting losses are recognized.

Item
3. Quantitative and Qualitative Disclosures