Oxbridge Re Ltd., the Cayman Islands based reinsurance company, has said that two tranches of tokenized reinsurance securities that fund its collateralized reinsurance sidecar vehicle for 2025 remain on-track to deliver attractive returns.But the prior year vintage of the tokens appears to have been impacted by losses due to hurricane Milton.Recall that, Oxbridge Re launched a Web3-focused venture named SurancePlus in 2022, using digital ledger technology to create tokenized reinsurance securities on the Avalanche blockchain.These tokenized reinsurance securities provide a digitised funding mechanism that support’s the firm’s collateralized reinsurance sidecar vehicle Oxbridge Re NS.

Investors that buy into the tokenized reinsurance securities gain access to returns generated through the sidecar and its quota share arrangements with Oxbridge Re.The reinsurer through its first sale of digital or tokenized reinsurance securities, the DeltaCat Re tokens issued in 2023.That $2.4 million of capital supported collateralized reinsurance contracts, underwritten via its sidecar structure, Oxbridge Re NS and investors in the ,  which surpassed initial and updated expectations.

In early 2024, through an EpsilonCat Re tokenized reinsurance securities issuance, which had a target return of 42%.We now understand that a full limit loss on a reinsurance contract due to the impacts of hurricane Milton in 2024 has meaningfully dented the return potential of those EpsilonCat Re tokens.Oxbridge Re recently reported that the full limit loss it recognised for the reinsurance contract that experienced adverse loss development related to hurricane Milton was $2.3 million, but noted that after accounting for the portion of losses borne by external tokenholders it would be reduced to $1.18 million net.

That suggests a meaningful impact for those investors that allocated to the EpsilonCat Re reinsurance tokens that provided some of the capital to cover the 2024 hurricane season for Oxbridge Re’s sidecar vehicle.In a similar vein to effects that were experienced by investors in certain other collateralized reinsurance structures due to that significant storm.For the current underwriting year, Oxbridge Re, through SurancePlus, arranged two tranches of tokenized reinsurance securities.

These were, , both of which supported its provision of reinsurance coverage to property and casualty insurers in the Gulf Coast region of the United States through the 2025 to 2026 wind season.Now, with the Atlantic hurricane season peak underway, Oxbridge Re has said that its its ZetaCat Re and EtaCat Re tokenized reinsurance securities remain on-track to achieve their targeted returns of 20% and 42%, respectively.Of course, that’s due to the fact there has not been any US Gulf Coast landfalling hurricane activity to-date, with hurricanes the main peril that would threaten the returns of these reinsurance securities.

“With the 2025 Atlantic hurricane season scheduled to conclude in less than 40 days, both EtaCat Re and ZetaCat Re tokens have performed as expected and are projected to deliver their targeted returns, assuming no major hurricane activity occurs before the end of the season,” the company said today.It’s worth noting that the hurricane season is typically said to end on November 30th, which is a good deal longer than the 40 days Oxbridge Re states are left to run.Jay Madhu, Chairman and CEO of Oxbridge and SurancePlus, stated, “We are encouraged by the progress of our 2025/2026 tokenized reinsurance securities, which remain on track to achieve their targeted returns of 20% and 42%.

Our vision continues to be centered on expanding access to this high-yield asset class, which remains uncorrelated to the broader capital markets and available for investors who previously did not have access.” Oxbridge Re said that the EtaCat Re and ZetaCat Re reinsurance token issuance raised gross proceeds of just over $3.6 million.So these remain relatively small in the world of reinsurance-linked investments, but Oxbridge Re continues to press ahead with the use of digital asset technology and architecture, to facilitate fractionalised investments into reinsurance-linked securities, which remains a novel and interesting approach..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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