Company: OXBRW
Filing Date: 2025-05-12
Form Type: S-3
Source: 0001641172-25-009665
Chunk: 11

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-05-12
Form: S-3
Chunk 11
---
 from its liabilities to policyholders. It is standard industry practice for primary insurers to reinsure portions of their insurance risks with other insurance companies under reinsurance agreements or contracts. This permits primary insurers to underwrite policies in amounts larger than the risks they are willing to retain. Reinsurance is generally designed to:

| ● | reduce                                                                                                                       
 the ceding company’s net liability on individual risks, thereby assisting it in managing its risk profile and increasing its 
 capacity to underwrite business as well as increasing the limit to which it can underwrite on a single risk;                 |
| ● | assist                                                                                                                       
 the ceding company in meeting applicable regulatory and rating agency capital requirements;                                  |
| ● | assist                                                                                                                       
 the ceding company in reducing the short-term financial impact of sales and other acquisition costs; and                     |
| ● | enhance                                                                                                                      
 the ceding company’s financial strength and statutory capital.                                                               |

| 7 |

When reinsurance companies purchase reinsurance to cover their own risks assumed from ceding companies, this is known as retrocessional reinsurance. Reinsurance or retrocessional reinsurance can benefit a ceding company or reinsuring company, referred to herein as a “retrocedant,” as applicable, in various ways, such as by reducing exposure to individual risks and by providing catastrophe protection from larger or multiple losses. Like ceding companies, retrocedants can use retrocessional reinsurance to manage their overall risk profile or to create additional underwriting capacity, allowing them to accept larger risks or to write more business than would otherwise be possible, absent an increase in their capital or surplus.

Reinsurance contracts do not discharge ceding companies from their obligations to policyholders. Ceding companies therefore generally require their reinsurers to have, and to maintain, either a strong financial strength rating or security, in the form of collateral, as assurance that their claims will be paid.

Insurers generally purchase multiple tranches of reinsurance protection above an initial retention elected by the insurer. The amount of reinsurance protection purchased by an insurer is typically determined by the insurer through both quantitative and qualitative methods. In the event of losses, the amount of loss that exceeds the amount of reinsurance protection purchased is retained by the insurer.

As a program is constructed from the ground up, each tranche added generally has a lower probability of loss than the prior tranche and therefore is generally subject to a lower reinsurance premium charged for the reinsurance protection purchased. Insurer catastrophe programs are typically supported by multiple reinsurers per program.