REINSURER HIGHLIGHT

By Jay Madhu

Captive Insight catches up with Jay Madhu of Oxbridge Re to talk about one of Cayman’s newest reinsurance companies.

What brought Oxbridge Re to the Cayman Islands and when?

Impressed with the ease of starting and conducting a business in the Cayman Islands after establishing an earlier business as a segregated portfolio company (“SPC”) in 2012, Oxbridge Re was formed in April 2013. We continue to enjoy a very positive relationship with the Cayman Islands Monetary Authority (“CIMA”).

Please give a brief overview of the company.

Oxbridge Re is a Cayman Islands reinsurance holding company that provides reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. Through our wholly owned Cayman Islands reinsurance subsidiary, Oxbridge Reinsurance Limited, we write fully collateralised policies to cover property losses from specified catastrophes. We specialise in underwriting medium frequency, high severity risks, where we believe sufficient data exists to analyse effectively the risk/return profile of reinsurance contracts.

I note the parent company Oxbridge Re Holdings Ltd. is listed on the NASDAQ under symbol OXBR. Please give an overview of the role of the Holding Company and how does the NASDAQ listing benefit the Cayman entity?

The parent company, Oxbridge Re Holdings Limited, is the public entity, serving as the organisational umbrella under which the Cayman reinsurance entity Oxbridge Reinsurance Limited and other possible future entities exist and/or will exist. At present, Oxbridge Reinsurance Limited is the sole subsidiary, licensed by CIMA and able to write collateralised reinsurance business. To support the company’s anticipated future growth in a capital-intensive industry, our public company structure facilitates access to capital markets to conduct the capital raises needed to obtain the desired level of funding.
At present, we anticipate that there may be other subsidiaries added going forward and remain open to any opportunities that may arise.

What experiences of other captive domiciles or insurance underwriters have you had with other business ventures?

In addition to Oxbridge Re, I have been actively involved in the formation of Moksha Re, an SPC formed in the Cayman Islands in 2012; and with the formation and operation of Claddaugh Casualty Insurance Company, a subsidiary of HCI that was formed in Bermuda in 2008. I am one of the founders and sit on the board of HCI, a company that was formed in 2007 with a small private raise of $13 million. We later took that company public in 2008. Today that company has a market cap in excess of $500 million. Homeowners Choice, a subsidiary of HCI, is a Florida property and casualty underwriter, and the fourth largest P&C carrier in Florida. We look to leverage our past experience and knowledge not only in the insurance / reinsurance space but also in the capital markets.

Please describe the process of dealing with the Cayman regulator and assembling your staff and service provider team, also how long it took.

It has been our pleasure to enjoy a positive relationship with CIMA, and have found that the organisation effectively executes its mission of fostering a thriving and growing, competitive and internationally recognised financial services industry.

In terms of assembling our staff, we considered the role of financial controller to be one of critical importance and wanted someone well versed both in Cayman regulations and in reinsurance as well as U.S. GAAP financial reporting. We were pleased that Wrendon Timothy, our Financial Controller and Company Secretary, was willing to leave the relative security of work with the internationally recognised accounting firm of PwC to join our startup, which we attribute in part to our successful track record in the past with HCI. Wrendon’s diligence and past experience makes him an integral part of the enterprise.

As for our service provider team, we were referred to many excellent firms and are pleased to be working with PKF, Cayman Islands, as our statutory auditor and Hacker, Johnson & Smith of Florida as our PCAOB audit firm. Our legal team consists of highly regarded Cayman-based and U.S.-based legal counsel, Maples and Calder and Foley & Lardner, respectively.

We believe Cayman has created a business and regulatory environment that supports our vision and certainly enjoy the side benefits of its wonderful lifestyle.

What part of the domestic insurance market is Oxbridge Re seeking to reach and what plans if any are there for outreach to Cayman captives?

Our primary targets are the Florida and Texas property and casualty markets in the U.S. because of the higher premium value due to their high levels of risk when compared to the rest of the country. Some Cayman companies are also potential targets for the future should we would choose to move into other lines of business.

You mention perception of Cayman as a place to dobusiness. What appeals about Cayman in this regard?

Certainly, the quality of life in the Cayman Islands is nearly unmatched, including an exceptionally good business climate with great business opportunities. This is a great place to live, work and play. In addition, the quality of people we have met and dealt with, in terms of education levels and business acumen is extremely high.

Lastly what is your vision for Oxbridge Re in Cayman for thenext five years, and how can the Cayman business and regulatory infrastructure assist this?

Our goal is to attain the size, scale and mass to achieve the operational and financial potential Oxbridge Re is capable of. We believe the company is poised for substantial growth, due to the supportive business environment offered by Cayman’s business and regulatory infrastructure, combined with the networks and experience we possess through our extensive business dealings in Florida and other states in the U.S. However, we are firm believers in sustainable growth, as anything short of that is detrimental to the enterprise value and not conducive to creating shareholder value. We believe Cayman has created a business and regulatory environment that supports our vision and certainly enjoy the side benefits of its wonderful lifestyle.