Good afternoon, and welcome to Oxbridge Re's fourth quarter 2021 earnings call. My name is Matthew, and I will be your conference operator this afternoon. At this time, all participants will be in listen-only mode . Joining us for today's presentation is Oxbridge Re's Chairman, President, and Chief Executive Officer, Jay Madhu, and Chief Financial Officer and Corporate Secretary, Wrendon Timothy. Following their remarks, we will open up the call for your questions. I would like to remind everyone that this call is also being broadcast live via webcast and available via webcast replay until April 30, 2022 on the investor information section of the Oxbridge Re's website at oxbridgere.com.
Now I would like to turn the call over to Wrendon Timothy, Chief Financial Officer of Oxbridge Re, who will provide the necessary cautions regarding the forward-looking statements that will be made by management during this call. Sir, please proceed.
Thank you, operator. During today's call, there will be forward-looking statements made regarding future events, including Oxbridge Re's future financial performance. These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipates, estimates, expects, intends, plans, projects, and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. A detailed discussion of these risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled Risk Factors, which is contained in our Form 10-K filed with the Securities and Exchange Commission.
The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business or financial condition and/or volatility of our earnings, which in turn can cause significant market price and trading volume fluctuation for our securities. Any forward-looking statements made on this conference call speak only as of the date of this conference call. Except as required by law, the company undertakes no obligation to update any forward-looking statements contained on this call or in any company presentation, even if the company's expectations or any related events, conditions, or circumstances change. In addition, on March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic.
The disruption of global commercial activities across all market sectors and a significant decline in volatility in financial markets as a result of the COVID-19 pandemic could have a material adverse impact on our financial position, results of operations, and cash flows . Possible effects include but are not limited to uncertainties with respect to current and future losses, interest rates and equity market volatility, and ongoing business and financial market impacts of the economy. The insurance industry is likely to experience material losses, which could reduce available capital, and we expect may help to sustain the upward pricing trend for reinsurers that we tend to see across many lines of business. However, the ultimate impact on current business in force as well as risks and potential opportunities on future business remains highly uncertain.
Now, I would like to turn the call over to our Chairman, President, and Chief Executive Officer, Jay Madhu. Jay?
Thank you, Wrendon, and welcome everyone. Thank you for joining us today. While it appears we're finally emerging to some degree from the global COVID-19 pandemic, we continue to monitor the situation and will adapt to any future outbreaks as we have over the last two years. Fortunately, the pandemic has little impact on our business. As we do each quarter, before we get into our results, I would like to take a moment to provide a brief overview of our company. Oxbridge Re Holdings Limited was founded [uncertain] with a mission to provide reinsurance solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. Through our licensed reinsurance subsidiary, Oxbridge Reinsurance Limited and our licensed reinsurance sidecar, Oxbridge Re NS, we write fully collateralized policies to cover property losses from specific catastrophes.
Because we write fully collateralized contracts, we believe we can compete effectively with large carriers. We specialize in underwriting low frequency, high severity risks, where we believe sufficient data exists to effectively analyze the risk-return profile of reinsurance contracts. Our objective is to achieve long-term growth in book value per share by writing business on a selective and opportunistic basis that will generate attractive underwriting profits relative to risk. Regarding our investment portfolio, we remain opportunistic and deploy our capital when favorable return opportunities arise that can contribute to the growth of capital and surplus in our licensed reinsurance subsidiaries over time. We are also very pleased to have completed our investment in Oxbridge Acquisition Corp in early August last year, a special purpose acquisition company or SPAC focused on disruptive technology.
We believe innovators and entrepreneurs in such business as blockchain, insurance technology, InsurTech, and artificial intelligence offer a real and significant opportunity to build value for our investors over the long term. We look forward to keeping you updated on its progress in the quarters ahead. Turning to our results in 2021, we are pleased to report continued growth and progress. Revenues were up and net income increased significantly with a $9.2 million unrealized gain in our investment in Oxbridge Acquisition Corp.
Overall, underwriting was profitable in spite of a small underwriting loss of $158,000 incurred in the third quarter on one of our reinsurance contracts due to the impact of Hurricane Ida on our book of business. Looking ahead, we are confident our core reinsurance business will continue to grow and are excited about the potential in the investment in Oxbridge Acquisition Corp, and the continuing value that it is anticipated to bring to our shareholders in the future. In addition, we continue to make progress on our wholly owned subsidiary, Oxbridge Re NS, our reinsurance sidecar. For the contract year end of May 31, 2021, our sidecar investors earned a healthy return of approximately 17%. I'll now turn things over to Wrendon to take us through our financial results. Wrendon?
Thank you, Jay. As a reminder to all investors, our typical contract period is from June 1 to May 31 of the following year. With respect to net premiums earned, net premiums earned increased in 2021 due primarily to the triggering of a limited loss on one of our reinsurance contracts due to the impact of Hurricane Ida on our book of business, which resulted in the acceleration of premiums earned, as well as higher rates on reinsurance contracts throughout the year. Our net investment income and unrealized gains on other investments grew significantly in 2021, primarily due to the $7.1 million unrealized gain recorded in the value of the SPAC since its IPO in August 2021. Net realized investment gains was $755,000 in 2021, compared with $374,000 in the prior year.
We also recognized a $767,000 negative change in the fair value of our equity securities compared to $155,000 in the prior year. Including all these factors, total revenues rose to $10.2 million in 2021 from $1.2 million in the prior year. Total expenses, which includes loss and loss adjustment expenses, policy acquisition costs, and general and administrative expenses , were up in 2021 due primarily to losses suffered during the year as a result of Hurricane Ida, as well as an increase in corporate expenses. Now turning to our ratios. As we have discussed before in our investor calls, we use various measures to analyze the growth and profitability of our business operations.
For our reinsurance business, we measure underwriting profitability by examining our loss ratio, acquisition expense ratio, our underwriting expense ratio, and our combined ratio. Our loss ratio, which measures underwriting profitability, is a ratio of loss and loss adjustment expenses incurred to net premiums earned. For the year ended December 31, 2021, our loss ratio increased to 16.4% compared to 0% in the prior year. The increase was due to the limited loss suffered on one of our reinsurance contracts from Hurricane Ida, partially offset by a higher denominator in net premiums earned compared with the prior year. Our acquisition expense ratio, which measures operational efficiency compared to policy acquisition costs and net premiums earned, remained consistent and stable at 11% in both years.
Our expense ratio, which measures operating performance, compares policy acquisition costs and general admin expenses with net premiums earned. Our expense ratio increased in 2021 due to the recording of an allowance for uncollectible premiums as one of our ceding insurers was ordered into receivership subsequent to year-end. Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. This ratio increased to 162.6% in 2021 due to the increase in our loss ratio this year resulting from the limit loss suffered under one of our reinsurance contracts, as well as the allowance for the uncollectible premiums.
Turning to our balance sheet, our investment portfolio decreased marginally to $577,000 at year-end from $787,000 at the end of 2020 due to the net sales of equity securities during the year as well as changes in their prices through 2021. The $11 million on the balance sheet as other investments reflect the fair value of our investment in the SPAC as determined by an independent valuation expert at year-end. Cash and cash equivalents and restricted cash and cash equivalents total $1.9 million at year-end, consistent with the prior year. The slight decrease was due to the withdrawal of the majority of collateral on the expiry of contracts in 2021, offset by the deposits under the 2021/2022 treaty year contract.
Total shareholders' equity was $16.7 million, up from $8 million at the end of 2020, due primarily to the unrealized gain on our investment in Oxbridge Acquisition Corp, which is measured by an independent valuation expert at year-end. I'll now like to turn the call back to Jay to wrap up before we take your questions. Jay?
Thank you, Wrendon. Through our reinsurance sidecar, we were able to continue to add a degree of diversity to our revenue stream and risk while still having the ability to achieve attractive returns. We were very pleased with the returns generated for the contract year ending May 31, 2021, where our sidecar investors earned an attractive 17%, despite a record-breaking 2020 hurricane season, following a solid return of 36% the prior year. We look for another year of strong investor returns in the current contract year. As previously mentioned, in any given year through our reinsurance subsidiary, we look to invest close to 50% of our equity. This year was no different.
Between insurance, pardon me, between reinsurance contracts and the investment at OAC Sponsor Ltd., the sponsor of the SPAC, we have stuck to that resolve. While Oxbridge Re is a lead investor in the SPAC, some of the risk capital was laid off to additional investors in the sponsor at a higher share price. The result being that despite the fact that Oxbridge Re contributes approximately 34.7% of the risk capital, Oxbridge's economics are significantly maximized in that it owns approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the sponsor, which tracks the Class B shares and private placement warrants in the SPAC. Thus, our investment further diversifies our business and positions us to capitalize on growth in the emerging disruptive technologies being developed.
We are very excited about the future unlocking of the full mark-to-market value of our investment and the potential that Oxbridge Acquisition Corp intends to bring to our shareholders over the long term. Looking ahead, we remain optimistic about the long-term prospects for our business. As always, we continue to evaluate additional opportunities for growth as well as future diversification of our risk profile. In closing, our business and our results are solid. Our sidecar investors continue to earn an attractive return. Our investment in Oxbridge Acquisition offers an entry into a new technology business with a focus on blockchain, InsurTech, and artificial intelligence. We remain debt-free. We have a strong balance sheet with solid cash position, and most importantly, we have a real opportunity for growth based on a viable business model. With that, we are ready to open the call for questions.
Operator, please provide the appropriate instructions.
Thank you, sir. Ladies and gentlemen, if you have any questions or comments, please press star one on your phone at this time. Thank you. At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Madhu for his closing remarks.
Thank you for joining us on today's call. Before we wrap up, I want to thank our employees, business partners, and investors for their continued support. I especially want to express our gratitude to our Oxbridge team, who continues to leverage their significant experience to manage and build our business during these challenging times. It is their dedication and expertise that will get us through these days, and we look forward to updating you on our next call. If you have any further questions, please give us a call anytime, and I sincerely mean that. Thank you again for your time and attention today, and your interest in Oxbridge. Operator?
Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.