Good afternoon. Welcome to Oxbridge Re's second quarter 2021 earnings call. My name is Rashaan, and I will be your conference operator this afternoon. At this time, all participants will be in a 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 September 16th, 2021, on the investor information section of the Oxbridge Re webcast at www.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 anticipate, estimate, expect, intend, plan, project, 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. Some of these risks and uncertainties are identified in the company's filings with the SEC. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business financial conditions and results of operations. 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 made on this call or in any company presentation, even if the company's expectations or any related events, conditions, or circumstances may change. In addition, on March 11th, 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 the significant declines and 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 may include, but are not limited to, uncertainties with respect to current and future losses, reduction in interest rates and equity market volatility, and ongoing business and financial market impact of an economic downturn.
The insurance industry is likely to experience material losses resulting from COVID-19 and will reduce available capital, and we expect will help to sustain the upward pricing trend for insurers that we have seen across many lines of businesses before COVID-19. 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. Welcome everyone. Thank you for joining us today. Our industry continues to adapt to the COVID-19 pandemic, and it has for the last year and a half. While vaccines are being deployed aggressively in most markets, we are not completely out of the woods yet. We continue to remain vigilant and cautious. Fortunately, the pandemic has little negative impact on our business. However, we continue to monitor our markets and the insurance industry in general to ensure we continue to deliver value to our shareholders. 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 over eight years ago 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 special catastrophes. As some of you already know, because we write fully collateralized contracts, we can compete effectively with large carriers. We specialize in underwriting low frequency, high severity risk, 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 capital and surplus of our licensed reinsurance subsidiaries over time.
Today, we completed and closed on the initial public offering of Oxbridge Acquisition Corp, a special purpose acquisition company or SPAC, to focus on acquiring entities and disruptive technologies. We believe innovators and entrepreneurs in such businesses such as insurtech, blockchain, and artificial intelligence offer a real and significant opportunity to build value for our investors over the long term. Turning to our results for the second quarter and first six months of 2021, we are pleased to report continued growth and progress. Revenues rose, net income increased, and our financial and operating ratios strengthened compared to last year. We have also incurred no losses to date this year or through last year. We look for this improved performance to continue throughout the balance of the year. In addition, we continue to make progress on our wholly owned subsidiary, Oxbridge Re NS, our reinsurance sidecar.
For the contract year ended May 31st, 2021, our sidecar investors earn an attractive return of approximately 19%. We will continue to grow this aspect of the business for the balance of 2021 and the next contract year. I'll now turn over to Wrendon to take us through our financial results. Wrendon?
Thank you, Jay. I would like to remind you that our typical contract period is from June 1 to May 31st of the following year. With respect to net premiums earned, net premiums earned for the quarter ended June 30th, 2021, increased to $205,000, up from $136,000 last year. The increase is due to higher rates on reinsurance contracts during the quarter. For the full six months of 2021, net premiums then declined slightly to $386,000 from $400,000 last year, due to the recording of certain premium adjustments during the six-month period. Net investment income and other income in the second quarter totaled $23,000 compared to $25,000 last year. Net realized investment gains in the quarter rose significantly to $755,000, up from $320,000 last year. For the full six months of 2021, net investment and other income decreased marginally to $38,000 from $57,000 the prior year.
With the strong realized gains in the second quarter, net realized investment gains for the full six months of 2021 were $755,000, up from $326,000 last year. Total expenses, including policy acquisition costs and general admin expenses, were $334,000 in the quarter, compared to $297,000 last year. Policy acquisition costs increased in the first quarter due to the higher premiums and rates on reinsurance contracts compared to last year. For the full six months of 2021, total expenses were $607,000 compared to $572,000 last year. Policy acquisition costs decreased due to premium adjustments recorded and related adjustments to policy acquisition costs. General admin expenses have increased marginally in 2021 due to expense fluctuations. As you mentioned, we are pleased to see another quarter of increased net income rising to $448,000, or $0.08 per common share.
For the full six months of 2021, net income also rose up to $476,000 or $0.08 per share, compared to a net loss of $199,000 or $0.03 per share for the full six months of 2020. The increase in net income is largely due to the significant net realized gains on investments earned so far this year. We have experienced no losses incurred to date in 2021 and through the full 2020 year. We turn to the financial ratios. As discussed before, we use various financial 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 ratio, and combined ratio. Our loss ratio, which measures underwriting profitability, is the ratio of losses and loss adjustment expenses incurred in net premiums earned.
For the six months ended June 30th, 2021 and 2020, the loss ratio was 0% due to no loss and all loss adjustment expenses being incurred. Our acquisition cost ratio, which measures operational efficiency compared to policy acquisition costs and net premiums earned, the ratio decreased to 10.7% for the three months ended June 30th, 2021 from 11.1% last year, and to 10.9% for the full six months of 2021 from 11% last year. The decreased ratios this year are due to the marginally lower weighted average acquisition cost on reinsurance contracts in force to date in 2021 when compared with last year. Our expense ratio, which measures operating performance compared policy acquisition costs and general and admin expenses with net premiums earned.
Our expense ratio decreased to 162.9% for the three-month period ended June 30th, 2021 from 220% last year due to the higher denominator in net premiums earned as a result of higher premiums and rates on reinsurance contracts in force in the quarter. For the six months ended June 30th, 2021, the expense ratio increased to 157.3% from 143% in the prior year, due primarily to higher general and admin expenses incurred to date in 2021. Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. This ratio decreased to 162.9% for the three-month period ended June 30th, 2021 from 220% in the prior year due to the higher denominator net premiums earned as a result of higher premiums and rates on reinsurance contracts in force.
For the six months ended June 30th, 2021, the combined ratio increased to 157.3% from 143% in 2020, due largely to higher general and admin expenses incurred this year. Turning to the balance sheet. Total investments, which includes investments in equity securities, total $790,000, consistent with the 2020 year-end. At June 30th, 2021, cash and cash equivalents, unrestricted cash and cash equivalents total $8 million, up from $7.5 million at the end of 2020. Restricted cash and cash equivalents decreased at June 30th, 2021, due to the withdrawal of the majority of collateral deposits on the expiry of contracts in 2021. Total shareholder equity at June 30th, 2021, was $8.5 million, up from $8 million at the end of 2020. I would like to turn the call back over to Jay to wrap up before we take your questions. Jay?
Thank you, Wrendon. While the 2020 Atlantic hurricane season was the fifth most active hurricane season on record, through our reinsurance sidecar, we were able 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 31st, 2021, where our sidecar investors earned an attractive return of 19%, following a solid return of 36% for the prior year. We look for another year of strong investor returns in the calendar year. In the current year, pardon me. As previously mentioned, in any given year through our reinsurance subsidiary, we look to invest approximately 50% of our equity. This year was no different. Between our reinsurance contracts and investment in OAC Sponsor Ltd., the sponsor of Oxbridge Acquisition Corp, we have stuck to that resolve.
While Oxbridge Re is a lead investor, 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 contributed approximately 34.7% of the risk capital, Oxbridge's economics was significantly maximized in that it owns approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the sponsor. Thus, our investment future diversifies our business and positions us to capitalize on growth in emerging and disruptive technology. We are excited about the potential for Oxbridge Acquisition Corp to add shareholder value over the long term. Looking ahead, we remain opportunistic about the long-term prospects for all our businesses. We continue to evaluate additional opportunities for growth as well as further diversification of our risk profile. In closing, our business and our results show growth and increased net income in 2021.
Our sidecar investors continue to earn an attractive return. Our investment in Oxbridge Acquisition offers an entry into new technology businesses with a focus on insurtech, blockchain, and artificial intelligence. We are debt-free, and we have a strong balance sheet with a solid cash position. Most importantly, we have real opportunity for growth. With that, we are ready to open the call for questions. Operator, please provide the appropriate instructions.
Thank you, sir. Ladies and gentlemen, at this time, to ask a question, please press star one on your telephone keypad. Again, for questions, please press star one at this time. Okay, our first question comes from Kent in Jesslyn. Kent, please state your question.
Sure. Actually, Jay, Wrendon, I just want to make sure I have this finally correct in regards to what Oxbridge Re has. The sponsor has a 20% stake in the SPAC itself, and Oxbridge, OXBR, has about a 50% economic interest in the sponsor. Did I finally get that correct?
Yes, Kent, this is Wrendon. You are almost correct. They have a 50% interest in the ordinary shares of the sponsor, which tracks the Class B shares of the SPAC, but it also owns about a 63% interest in the preference shares of the sponsor, which tracks the private placement warrants in the SPAC.
Got it. I was 60% correct.
Yes.
I much rather underestimate than overestimate. Next question is, I don't know if you would answer this or not. Obviously, I would think that you've already targeted companies that you may want to purchase and like. Any potential timeline? Do you need a shareholder vote on it?
We do have some thoughts. We haven't started any conversations with anybody prior to going public, but we do have some thoughts on where we would look. This is a little bit of a long-haul situation because there's a significant amount of due diligence that would go on in anybody that we would have conversations with. It will take a little bit of time, but we're confident that we will get it done within the allotted time, if not sooner.
Okay, cool. Thank you.
Thank you.
Again, ladies and gentlemen, Eric Greenberg, please state your question.
My questions were answered. Thank you, Kent. He asked the same questions I was going to ask. Thank you.
Thanks, Eric.
Thanks, Eric.
Okay, there are no further questions at this time.
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 continue 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 feel free to give us a call anytime. Thank you again for your time and attention today and for your interest in Oxbridge. Operator?
Before we conclude today's call, I would like to remind everyone that a recording of today's call will be available for replay via a link available in the investor section of the company's website. Thank you for joining us today for our presentation. You may now disconnect.