RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

6 Months Ended

Jun. 30, 2025

Reserve For Losses And Loss Adjustment Expenses

RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

7. RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

SCHEDULE OF LOSS ADJUSTMENT EXPENSES

	At June 30,		At June 30,
	2025		2024
	(in thousands)

Balance, beginning of period	$	-	$	-
Incurred related to:
Current period		-		-
Prior period		2,293		-
Total incurred		2,293		-
Paid related to:
Current period		-		-
Prior period		2,118		-
Total paid		2,118		-
Balance, end of period	$	175	$	-

When losses occur, the reserves for losses and LAE are typically 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 typically suffers limit losses in the event of a Category 3 or above hurricane making landfall in a populated area where the Company has catastrophe risk exposure. During the three 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, 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 losses 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.

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 income 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.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

June 30, 2025

OXBRIDGE RE HOLDINGS Ltd 10-Q