March 4, 2024


Oxbridge Re Ltd., a Cayman Islands-based reinsurer focused on Gulf Coast risks, has successfully raised $2.4 million through the sale of a digital or tokenized reinsurance security called DeltaCat Re, which will be used to support Mortgage reinsurance contract underwritten through its sidecar structure, Oxbridge Re NS.

oxbridge-re-token-suranceplusWe first reported in early February that Oxbridge Re planned to use its registered subsidiary, SurancePlus Inc., to issue tokenized reinsurance securities issued using the Avalanche blockchain.

The securities represent interests in fractional reinsurance contracts entered into by its reinsurance subsidiary, Oxfbridge Re NS, and investors will be rewarded for executing the underlying reinsurance contracts in the affiliated reinsurance contracts.

The offering began at the end of March, and Oxbridge Re also revealed at the time that the tokenized reinsurance securities were expected to be traded through secondary markets.

SurancePlus has now completed the offering, raising $2.4 million in private capital through the sale of 244,776 tokenized reinsurance securities, DeltaCat Re.

The equity capital will now be used by Oxbridge Re NS, Oxbridge Re’s reinsurance sidecar subsidiary, to enter into contracts for the 2023-2024 treaty year.

Jay Madhu, President and CEO of Oxbridge Re, commented: “SurancePlus innovates on Oxbridge Re’s existing special purpose vehicle for raising reinsurance capital, Oxbridge Re NS Limited, by applying digital innovations and insights from the Web3 The democratization of reinsurance as an alternative investment route.

“By doing so, we believe we are the first public company to successfully raise catastrophe reinsurance venture capital through the sale of tokenized reinsurance securities.”

DeltaCat Re Tokens are sold to accredited investors in the United States pursuant to Section 506(c) of Regulation D and to non-U.S. investors pursuant to Regulation S of the United States Securities Act of 1933, as amended.

The tokenized securities are issued under a series called Cat Re, of which DeltaCat Re is the first offering, and Oxbridge Re hopes to issue more tokens in the coming years.

Oxbridge Re has previously stated that it sees a significant opportunity for investors to earn reinsurance-related returns through its digital securities, which it said could return 42% in the first year, presumably on a no-loss basis.

The idea is to bring in capital through differentiated sources, while tokenized preferred shares are expected to facilitate liquidity for investors.

While this is a relatively small financing, for Oxbridge Re in terms of reinsurance sidecars, this is actually the largest financing in its Oxbridge Re NS vehicle, the previous largest being in 2018 with a financing amount of for $2 million.

Oxbridge Re then launched a second, smaller reinsurance sidecar deal in June 2019, when it sponsored the $600,000 Oxbridge Re NS offering.

Then, in 2020, Oxbridge Re renewed its fully collateralized reinsurance sidecar vehicle, Oxbridge Re NS Ltd., with an amount reduced to $216,000.

As such, this new method of raising money for sidecars has proven to be the most successful so far, and it will be interesting to see how much money future products under SurancePlus can raise.

View details of many reinsurance sidecar deals in our directory.

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