Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) announces
2024 fiscal year net earnings of $3,874.9 million ($160.56 net
earnings per diluted share after payment of preferred share
dividends) compared to fiscal year 2023 net earnings of $4,381.8
million ($173.24 net earnings per diluted share after payment of
preferred share dividends). Book value per basic share at
December 31, 2024 was $1,059.60 compared to $939.65 at
December 31, 2023 (an increase of 14.5% adjusted for the $15
per common share dividend paid in the first quarter of 2024).
"2024 produced record underwriting profit of
$1.8 billion and a consolidated combined ratio of 92.7%. Our
property and casualty insurance and reinsurance operations achieved
record adjusted operating income of $4.8 billion and operating
income of $6.5 billion including the benefit of discounting, net of
a risk adjustment on claims, reflecting strong underwriting
performance and interest and dividends, and continued favourable
results from share of profit of associates. Gross premiums written
grew by 12.6% or $3.6 billion to $32.5 billion and net premiums
written grew by 11.6%, primarily reflecting the acquisition of Gulf
Insurance in 2023, which added $2.7 billion in gross premiums
written and $1.6 billion in net premiums written. Excluding Gulf
Insurance gross premiums written were up 3.1% and net premiums
written were up 4.5%.
"Our net gains on investments of $1.1 billion
were principally comprised of net gains on common stocks of $1.9
billion, partially offset by mark to market net losses on bonds of
$0.7 billion, and our annual interest and dividend income increased
to $2.5 billion.
"Our book value per basic share included a net
loss of $477 million, or $22 per share, in comprehensive income
related to unrealized foreign currency losses net of hedges due to
the significant strengthening of the U.S. dollar against many
currencies around the world, primarily in the fourth quarter of
2024. We view these unrealized foreign currency movements as market
fluctuations similar to unrealized gains or losses on our equity
holdings.
"During the year we purchased 1,346,953
subordinate voting shares for cancellation for cash consideration
of approximately $1.6 billion, or $1,179 per share.
"We remain focused on being soundly financed and
ended 2024 in a strong financial position with $2.5 billion in
cash, marketable securities and investments in the holding company,
and an additional $2.0 billion, at fair value, of investments in
associates and consolidated non-insurance companies owned by the
holding company," said Prem Watsa, Chairman and Chief Executive
Officer.
The table below presents the sources of the
company's net earnings in a segment reporting format which the
company has consistently used as it believes it assists in
understanding Fairfax:
| |
Fourth quarter |
|
Year ended December 31, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
($ millions) |
| Gross premiums written |
7,548.7 |
|
|
6,639.3 |
|
|
32,825.4 |
|
|
29,092.5 |
|
| Net premiums written |
5,923.0 |
|
|
5,161.5 |
|
|
25,607.4 |
|
|
22,903.6 |
|
| Net insurance revenue |
6,329.3 |
|
|
5,680.9 |
|
|
24,866.4 |
|
|
21,957.4 |
|
| |
|
|
|
|
|
|
|
| Sources of net
earnings |
|
|
|
|
|
|
|
| Operating income - Property
and Casualty Insurance and Reinsurance: |
|
|
|
|
|
|
|
|
Insurance service result: |
|
|
|
|
|
|
|
|
North American Insurers |
301.2 |
|
|
265.7 |
|
|
1,101.1 |
|
|
977.1 |
|
|
Global Insurers and Reinsurers |
1,026.1 |
|
|
714.7 |
|
|
3,037.4 |
|
|
2,828.0 |
|
|
International Insurers and Reinsurers |
144.1 |
|
|
100.9 |
|
|
463.6 |
|
|
330.8 |
|
|
Insurance service result |
1,471.4 |
|
|
1,081.3 |
|
|
4,602.1 |
|
|
4,135.9 |
|
|
Other insurance operating expenses |
(292.1 |
) |
|
(246.8 |
) |
|
(1,038.1 |
) |
|
(822.1 |
) |
| |
1,179.3 |
|
|
834.5 |
|
|
3,564.0 |
|
|
3,313.8 |
|
|
Interest and dividends |
632.8 |
|
|
482.1 |
|
|
2,224.6 |
|
|
1,654.7 |
|
|
Share of profit of associates |
236.7 |
|
|
153.4 |
|
|
745.1 |
|
|
761.6 |
|
| Operating income - Property
and Casualty Insurance and Reinsurance |
2,048.8 |
|
|
1,470.0 |
|
|
6,533.7 |
|
|
5,730.1 |
|
| Operating loss - Life
insurance and Run-off |
(108.8 |
) |
|
(187.3 |
) |
|
(92.1 |
) |
|
(144.6 |
) |
| Operating income (loss) -
Non-insurance companies |
150.1 |
|
|
(40.3 |
) |
|
241.4 |
|
|
121.9 |
|
| Net finance income (expense)
from insurance contracts and reinsurance contract assets held |
203.4 |
|
|
(1,010.3 |
) |
|
(1,279.9 |
) |
|
(1,605.6 |
) |
| Net gains (losses) on
investments |
(403.2 |
) |
|
1,464.4 |
|
|
1,067.2 |
|
|
1,949.5 |
|
| Gain on sale and consolidation of
insurance subsidiaries |
— |
|
|
290.7 |
|
|
— |
|
|
549.8 |
|
| Interest expense |
(172.7 |
) |
|
(130.5 |
) |
|
(649.0 |
) |
|
(510.0 |
) |
| Corporate overhead and
other |
(40.4 |
) |
|
(153.4 |
) |
|
(182.8 |
) |
|
(182.8 |
) |
| Earnings before income
taxes |
1,677.2 |
|
|
1,703.3 |
|
|
5,638.5 |
|
|
5,908.3 |
|
| Provision for income
taxes |
(359.3 |
) |
|
(28.5 |
) |
|
(1,375.6 |
) |
|
(813.4 |
) |
| Net
earnings |
1,317.9 |
|
|
1,674.8 |
|
|
4,262.9 |
|
|
5,094.9 |
|
| |
|
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
|
|
|
|
Shareholders of Fairfax |
1,152.2 |
|
|
1,328.5 |
|
|
3,874.9 |
|
|
4,381.8 |
|
|
Non-controlling interests |
165.7 |
|
|
346.3 |
|
|
388.0 |
|
|
713.1 |
|
| |
1,317.9 |
|
|
1,674.8 |
|
|
4,262.9 |
|
|
5,094.9 |
|
The table below presents the insurance service
result for the property and casualty insurance and reinsurance
operations reconciled to underwriting profit, a key performance
measure used by the company and the property and casualty industry
in which it operates. The reconciling adjustments are (i) other
insurance operating expenses as presented in the consolidated
statement of earnings, (ii) the effects of discounting of losses
and ceded losses on claims recorded in the period, and (iii) the
effects of the risk adjustment and other.
| |
Fourth quarter |
|
Year ended December 31, |
|
Property and Casualty Insurance and
Reinsurance |
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
($ millions) |
| Insurance service
result |
1,471.4 |
|
|
1,081.3 |
|
|
4,602.1 |
|
|
4,135.9 |
|
|
Other insurance operating expenses |
(292.1 |
) |
|
(246.8 |
) |
|
(1,038.1 |
) |
|
(822.1 |
) |
|
Discounting of losses and ceded losses on claims recorded in the
period |
(399.6 |
) |
|
(393.7 |
) |
|
(1,667.5 |
) |
|
(1,813.6 |
) |
|
Changes in the risk adjustment and other |
(121.4 |
) |
|
138.5 |
|
|
(105.1 |
) |
|
22.0 |
|
| Underwriting
profit |
658.3 |
|
|
579.3 |
|
|
1,791.4 |
|
|
1,522.2 |
|
| Interest and dividends |
632.8 |
|
|
482.1 |
|
|
2,224.6 |
|
|
1,654.7 |
|
| Share of profit of
associates |
236.7 |
|
|
153.4 |
|
|
745.1 |
|
|
761.6 |
|
| Adjusted operating
income |
1,527.8 |
|
|
1,214.8 |
|
|
4,761.1 |
|
|
3,938.5 |
|
Highlights for fiscal year 2024 (with
comparisons to fiscal year 2023 except as otherwise noted, and
excluding the effects of IFRS 17 when discussing the combined ratio
and adjusted operating income) include the following:
- Net premiums written by the
property and casualty insurance and reinsurance operations
increased by 11.6% to a record $25.3 billion from $22.7 billion,
while gross premiums written increased by 12.6%, primarily
reflecting the consolidation of Gulf Insurance on December 26, 2023
which contributed $1.6 billion to net premiums written and $2.7
billion to gross premiums written in 2024, and continued growth
across most operating companies.
- The consolidated undiscounted
combined ratio of the property and casualty insurance and
reinsurance operations improved to 92.7%, producing a record
underwriting profit of $1,791.4 million, while absorbing higher
catastrophe losses of $1,099.3 million (representing 4.5
combined ratio points), compared to an undiscounted combined ratio
of 93.2% and an underwriting profit of $1,522.2 million in 2023.
The increase in underwriting profitability reflected growth in
business volumes and higher net favourable prior year reserve
development, with a benefit of $593.6 million or 2.4 combined ratio
points (2023 - $309.6 million or 1.4 combined ratio points).
- Adjusted operating income (which
excludes the benefit of discounting, net of a risk adjustment on
claims) of the property and casualty insurance and reinsurance
operations increased by 20.9% to a record $4,761.1 million from
$3,938.5 million, reflecting the best year in the company's history
for both underwriting profit and interest and dividends, and
continued strong results from share of profit of associates.
- The consolidated statement of
earnings included a net loss of $529.9 million (2023 – a net
benefit of $496.0 million) reflecting the effects of increases in
discount rates during the year, which was comprised of net losses
on bonds of $731.3 million, partially offset by a net benefit on
insurance contracts and reinsurance contracts held of $201.4
million. Of the $529.9 million net loss in 2024, $437.7 million was
incurred in the fourth quarter (2023 – a net benefit of $326.7
million).
- Float of the property and casualty
insurance and reinsurance operations increased by 5.9% to $35.4
billion at December 31, 2024 from $33.4 billion at
December 31, 2023.
- Operating loss of the Life
insurance and Run-off operations was $92.1 million compared to an
operating loss of $144.6 million in 2023, principally reflecting
lower net adverse prior year reserve development at Run-off of
$221.1 million in 2024 (2023 - $259.4 million) on an undiscounted
basis, primarily related to latent hazard claims, construction
defects and workers' compensation.
- Consolidated interest and dividends
increased significantly from $1,896.2 million to a record $2,511.9
million (comprised of interest and dividends of $2,224.6 million
(2023 - $1,654.7 million) earned by the investment portfolios of
the property and casualty insurance and reinsurance operations,
with the remainder earned by life insurance and run-off,
non-insurance companies and corporate and other). At
December 31, 2024 the company's insurance and reinsurance
companies held portfolio investments of $62.9 billion (excluding
Fairfax India's portfolio of $1.9 billion), of which $7.6 billion
was in cash and short term investments representing 12.1% of those
portfolio investments.
- Consolidated share of profit of
associates of $956.3 million (comprised of $745.1 million earned in
the property and casualty insurance and reinsurance operations
investment portfolio, with the remainder earned in life insurance
and run-off, non-insurance companies and corporate and other),
principally reflected share of profit of $515.0 million from
Eurobank, $212.6 million from Poseidon (formerly Atlas) and $57.0
million from Peak Achievement (principally reflecting its sale of
Rawlings Sporting Goods), partially offset by share of loss of
$72.7 million from Sanmar Chemicals Group.
- Net gains on investments of
$1,067.2 million (net losses on investments of $403.2 million in
the fourth quarter) consisted of the following:
| |
Fourth quarter of 2024 |
| |
($ millions) |
| |
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
| Net gains (losses) on: |
|
|
|
|
|
|
Equity exposures |
858.9 |
|
|
24.7 |
|
|
883.6 |
|
|
Bonds |
(142.3 |
) |
|
(908.0 |
) |
|
(1,050.3 |
) |
|
Other |
293.6 |
|
|
(530.1 |
) |
|
(236.5 |
) |
| |
1,010.2 |
|
|
(1,413.4 |
) |
|
(403.2 |
) |
| |
|
|
|
|
|
| |
Year ended December 31, 2024 |
| |
($ millions) |
| |
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
| Net gains (losses) on: |
|
|
|
|
|
|
Equity exposures |
1,508.8 |
|
|
350.2 |
|
|
1,859.0 |
|
|
Bonds |
(106.5 |
) |
|
(624.8 |
) |
|
(731.3 |
) |
|
Other |
148.7 |
|
|
(209.2 |
) |
|
(60.5 |
) |
| |
1,551.0 |
|
|
(483.8 |
) |
|
1,067.2 |
|
| |
|
|
|
|
|
|
|
|
- Net gains on
equity exposures of $1,859.0 million in 2024 was primarily
comprised of net gains on common stocks and equity derivatives, a
realized gain on the disposition of Stelco of $343.7 million and a
remeasurement gain on consolidation of Peak Achievement of $203.4
million.The company recorded net gains of $1,033.5 million (fourth
quarter of 2024 - $341.9 million) on equity total return swaps on
Fairfax subordinate voting shares. During the fourth quarter of
2024 the company closed out derivative contracts on 203,800 Fairfax
subordinate voting shares with an original notional amount of $68.5
million (Cdn$88.9 million). At December 31, 2024 the company
continued to hold equity total return swaps on 1,760,355 Fairfax
subordinate voting shares with an original notional amount of
$664.0 million (Cdn$846.1 million) or $377.19 (Cdn$480.62) per
share.Net losses on bonds of $731.3 million primarily reflected net
unrealized losses on U.S. treasuries and U.S. treasury bond forward
contracts, Brazilian government bonds and corporate and other
bonds, principally due to the increase in interest rates in the
fourth quarter of 2024.Net losses on other of $60.5 million
principally reflected unrealized losses of $154.3 million on the
company's holdings of Digit compulsory convertible preferred
shares, which was partially offset by dividends received in the
fourth quarter of 2024 of $112.3 million that were recorded within
interest and dividends in the consolidated statement of
earnings.
- The company's
fixed income portfolio is conservatively positioned with
effectively 71% of the fixed income portfolio invested in
government bonds, 19% in high quality corporate bonds, primarily
short-dated, and 10% in first mortgage loans.
- Interest expense
of $649.0 million (inclusive of $55.7 million on leases) was
primarily comprised (other than leases) of $456.6 million incurred
on borrowings by the holding company and the insurance and
reinsurance companies and $136.7 million incurred on borrowings by
the non-insurance companies (which are non-recourse to the holding
company).
- Provision for
income taxes of $1,375.6 million with an effective tax rate of
24.4% increased from $813.4 million with an effective tax rate of
13.8% in 2023, principally reflecting lower benefit from the tax
rate differential on income and losses outside Canada including the
effects of new Pillar Two global minimum taxes, lower non-taxable
investment income and changes to capital gains tax rates in India
that increased deferred income tax expense. The provision for
income taxes in 2023 also reflected a benefit for the change in tax
rate for deferred income taxes primarily related to deferred income
tax assets recognized as a result of new tax laws in Bermuda.
- On December 13,
2024 the company purchased the remaining shares of Brit from Brit's
minority shareholder, increasing the company's ownership interest
in Brit from 86.2% to 100.0%.
- During the
fourth quarter of 2024 the company completed two significant
acquisitions and commenced consolidating each entity in its
Non-insurance companies reporting segment at the respective
acquisition dates:
- On October 1,
2024 the company acquired all of the issued and outstanding common
shares of Sleep Country Canada Holdings Inc. ("Sleep Country") for
purchase consideration of $880.6 million (Cdn$1.2 billion).
Sleep Country is a specialty sleep retailer with a national retail
store network and multiple e-commerce platforms.
- On December 20,
2024 the company increased its equity interest in Peak Achievement
Athletics Inc. ("Peak Achievement") to 100.0% by acquiring the
42.6% equity interest owned by Sagard Holdings Inc. and the 14.8%
equity interest owned by other minority shareholders for purchase
consideration of $765.0 million. The company was required to
remeasure its existing equity accounted investment in Peak
Achievement to its fair value of $325.7 million upon consolidation
and recorded a pre-tax gain of $203.4 million in net gains on
investments in the consolidated statement of earnings, which
reflected Peak Achievement being now carried at approximately 8.5
times free cash flow. Peak Achievement is engaged in the design,
manufacture and distribution of performance sports equipment and
related apparel and accessories for ice hockey, roller hockey and
lacrosse, under brands such as Bauer Hockey, Cascade Lacrosse and
Maverik Lacrosse.
- These and other
smaller acquisitions resulted in an increase to goodwill and
intangible assets of $2.3 billion and to non-recourse debt of $1.2
billion during the year.
- The excess of
fair value over carrying value of investments in non-insurance
associates and market traded consolidated non-insurance
subsidiaries increased to $1,480.5 million at December 31,
2024 from $1,006.0 million at December 31, 2023, with $396.6
million of that increase related to publicly traded Eurobank. The
excess of fair value over carrying value at December 31, 2024
no longer includes an unrealized gain of $351.9 million on Stelco
as it was realized in the fourth quarter of 2024. Subsequent to
December 31, 2024, on January 23, 2025 the company sold 80.0
million shares or an approximate 2.2% equity interest in Eurobank
for gross proceeds of $190.8 million (€183.5 million, that was
received by the holding company), which decreased the company's
equity interest to 32.3% and will result in the recognition of a
realized gain of approximately $40 million in the consolidated
statement of earnings in the first quarter of 2025. The sale was a
mandatory technical adjustment to the company’s significant equity
interest in Eurobank and does not reflect in any way the company's
view on Eurobank’s valuation or long-term prospects.
- The company's
total debt to total capital ratio, excluding non-insurance
companies, increased to 24.8% at December 31, 2024 from 23.1%
at December 31, 2023, primarily reflecting increased total
debt (principally the issuance of $1.0 billion principal
amount of senior notes due 2054), partially offset by increased
common shareholders' equity.
- On November 22,
2024 the company completed an offering of aggregate Cdn$700.0
million principal amount of unsecured senior notes, comprising
Cdn$450 million of 4.73% unsecured senior notes due 2034 and
Cdn$250 million of 5.23% unsecured senior notes due 2054. A portion
of the aggregate net proceeds were used to redeem all of the
company's Series C and Series D preferred shares on December 31,
2024.
- During 2024 the
company purchased 207,974 of its subordinate voting shares for
treasury at a cost of $240.4 million and 1,346,953 subordinate
voting shares for cancellation at a cost $1,588.4 million, or
$1,179.24 per share.
- Subsequent to
December 31, 2024:
- On January 1,
2025 the company acquired a 50.0% equity interest in Blizzard
Vacatia Equity Partners LLC ("Blizzard Vacatia"). The company's
total cash investment of $835.0 million was principally comprised
of a senior secured loan, preferred shares and a mortgage-backed
loan. Blizzard Vacatia, through its subsidiaries, is engaged in the
development, sales, marketing and rental of timeshare resorts.
- During the
fourth quarter of 2024 the company entered into an agreement to
purchase an approximate 33% equity interest in Albingia SA
("Albingia") for purchase consideration of approximately $216
million (€209 million). Closing of the transaction is subject to
regulatory approvals and is expected to be in the second quarter of
2025. Albingia is a French insurance company that writes specialty
property and casualty insurance.
At December 31, 2024 there were 21,668,466
(December 31, 2023 - 23,003,248) common shares effectively
outstanding.
Consolidated balance sheet, earnings and
comprehensive income information, together with segmented premium
and combined ratio, prior year reserve development and catastrophe
loss information, follow and form part of this news release.
As previously announced, Fairfax will hold a
conference call to discuss its 2024 year-end results at 8:30 a.m.
Eastern time on Friday February 14, 2025. The call, consisting
of a presentation by the company followed by a question period, may
be accessed at 1 (800) 369-2143 (Canada or U.S.) or 1 (312)
470-0063 (International) with the passcode "FAIRFAX". A replay of
the call will be available from shortly after the termination of
the call until 5:00 p.m. Eastern time on Friday, February 28,
2025. The replay may be accessed at 1 (888) 325-4187 (Canada or
U.S.) or 1 (203) 369-3403 (International).
Fairfax Financial Holdings Limited is a holding
company which, through its subsidiaries, is primarily engaged in
property and casualty insurance and reinsurance and the associated
investment management.
| For further
information, contact: |
John
Varnell |
| |
Vice President, Corporate Development |
| |
(416) 367-4941 |
| Information
onCONSOLIDATED BALANCE SHEETSas at
December 31, 2024 and December 31, 2023(US$ millions
except per share amounts) |
|
|
|
|
| |
|
December 31, 2024 |
|
|
December 31, 2023 |
|
| Assets |
|
|
|
|
|
|
|
|
Holding company cash and investments (including assets pledged for
derivative obligations – $193.6; December 31, 2023 – $197.7) |
|
|
2,502.7 |
|
|
|
|
1,781.6 |
|
| Insurance contract
receivables |
|
|
780.4 |
|
|
|
|
926.1 |
|
| |
|
|
|
|
|
|
|
| Portfolio investments |
|
|
|
|
|
|
|
| Subsidiary cash and short term
investments (including restricted cash and cash equivalents –
$1,240.7; December 31, 2023 – $637.0) |
|
|
7,620.5 |
|
|
|
|
7,165.6 |
|
| Bonds (cost $37,852.9; December
31, 2023 – $36,511.9) |
|
|
37,390.3 |
|
|
|
|
36,850.8 |
|
| Preferred stocks (cost $944.6;
December 31, 2023 – $898.3) |
|
|
2,365.0 |
|
|
|
|
2,447.4 |
|
| Common stocks (cost $7,116.1;
December 31, 2023 – $6,577.2) |
|
|
7,464.2 |
|
|
|
|
6,903.4 |
|
| Investments in associates (fair
value $8,144.8; December 31, 2023 – $7,553.2) |
|
|
7,153.3 |
|
|
|
|
6,607.6 |
|
| Derivatives and other invested
assets (cost $903.9; December 31, 2023 – $952.0) |
|
|
1,159.7 |
|
|
|
|
1,025.3 |
|
| Assets pledged for derivative
obligations (cost $154.8; December 31, 2023 – $137.7) |
|
|
150.8 |
|
|
|
|
139.3 |
|
| Fairfax India cash, portfolio
investments and associates (fair value $3,163.3; December 31, 2023
– $3,507.6) |
|
|
1,916.6 |
|
|
|
|
2,282.7 |
|
| |
|
|
65,220.4 |
|
|
|
|
63,422.1 |
|
| |
|
|
|
|
|
|
|
| Reinsurance contract assets
held |
|
|
10,682.6 |
|
|
|
|
10,887.7 |
|
| Deferred income tax assets |
|
|
325.0 |
|
|
|
|
301.1 |
|
| Goodwill and intangible
assets |
|
|
8,278.2 |
|
|
|
|
6,376.3 |
|
| Other assets |
|
|
8,988.0 |
|
|
|
|
8,290.2 |
|
| Total assets |
|
|
96,777.3 |
|
|
|
|
91,985.1 |
|
| |
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
| Accounts payable and accrued
liabilities |
|
|
6,078.3 |
|
|
|
|
5,487.2 |
|
| Derivative obligations |
|
|
356.9 |
|
|
|
|
444.9 |
|
| Deferred income tax
liabilities |
|
|
1,714.0 |
|
|
|
|
1,250.3 |
|
| Insurance contract payables |
|
|
923.0 |
|
|
|
|
1,206.9 |
|
| Insurance contract
liabilities |
|
|
47,602.2 |
|
|
|
|
46,171.4 |
|
| Borrowings – holding company and
insurance and reinsurance companies |
|
|
8,858.2 |
|
|
|
|
7,824.5 |
|
| Borrowings – non-insurance
companies |
|
|
2,895.5 |
|
|
|
|
1,899.0 |
|
| Total liabilities |
|
|
68,428.1 |
|
|
|
|
64,284.2 |
|
| |
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
| Common shareholders’ equity |
|
|
22,959.8 |
|
|
|
|
21,615.0 |
|
| Preferred stock |
|
|
1,108.2 |
|
|
|
|
1,335.5 |
|
| Shareholders’ equity attributable
to shareholders of Fairfax |
|
|
24,068.0 |
|
|
|
|
22,950.5 |
|
| Non-controlling interests |
|
|
4,281.2 |
|
|
|
|
4,750.4 |
|
| Total equity |
|
|
28,349.2 |
|
|
|
|
27,700.9 |
|
| |
|
|
96,777.3 |
|
|
|
|
91,985.1 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Book value per basic
share |
|
$ |
1,059.60 |
|
|
|
$ |
939.65 |
|
| Information
onCONSOLIDATED STATEMENTS OF EARNINGSfor the
fourth quarters and years ended December 31, 2024 and 2023(US$
millions except per share amounts) |
| |
|
Fourth quarter |
|
Year ended December 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Insurance |
|
|
|
|
|
|
|
|
|
Insurance revenue |
|
|
7,744.2 |
|
|
|
6,901.8 |
|
|
|
31,064.1 |
|
|
|
26,934.8 |
|
|
Insurance service expenses |
|
|
(5,834.3 |
) |
|
|
(6,022.7 |
) |
|
|
(24,866.8 |
) |
|
|
(21,944.1 |
) |
|
Net insurance result |
|
|
1,909.9 |
|
|
|
879.1 |
|
|
|
6,197.3 |
|
|
|
4,990.7 |
|
|
Cost of reinsurance |
|
|
(1,414.9 |
) |
|
|
(1,220.9 |
) |
|
|
(6,197.7 |
) |
|
|
(4,977.4 |
) |
|
Recoveries of insurance service expenses |
|
|
848.0 |
|
|
|
1,258.0 |
|
|
|
4,453.2 |
|
|
|
3,943.7 |
|
|
Net reinsurance result |
|
|
(566.9 |
) |
|
|
37.1 |
|
|
|
(1,744.5 |
) |
|
|
(1,033.7 |
) |
|
Insurance service result |
|
|
1,343.0 |
|
|
|
916.2 |
|
|
|
4,452.8 |
|
|
|
3,957.0 |
|
|
Other insurance operating expenses |
|
|
(329.2 |
) |
|
|
(307.6 |
) |
|
|
(1,182.9 |
) |
|
|
(966.4 |
) |
|
Net finance income (expense) from insurance contracts |
|
|
261.0 |
|
|
|
(1,318.9 |
) |
|
|
(1,754.9 |
) |
|
|
(2,152.7 |
) |
|
Net finance income (expense) from reinsurance contract assets
held |
|
|
(57.6 |
) |
|
|
308.6 |
|
|
|
475.0 |
|
|
|
547.1 |
|
| |
|
|
1,217.2 |
|
|
|
(401.7 |
) |
|
|
1,990.0 |
|
|
|
1,385.0 |
|
| Investment
income |
|
|
|
|
|
|
|
|
|
Interest and dividends |
|
|
698.2 |
|
|
|
536.6 |
|
|
|
2,511.9 |
|
|
|
1,896.2 |
|
|
Share of profit of associates |
|
|
347.0 |
|
|
|
127.7 |
|
|
|
956.3 |
|
|
|
1,022.2 |
|
|
Net gains (losses) on investments |
|
|
(403.2 |
) |
|
|
1,464.4 |
|
|
|
1,067.2 |
|
|
|
1,949.5 |
|
| |
|
|
642.0 |
|
|
|
2,128.7 |
|
|
|
4,535.4 |
|
|
|
4,867.9 |
|
| Other revenue and
expenses |
|
|
|
|
|
|
|
|
|
Non-insurance revenue |
|
|
2,010.1 |
|
|
|
1,752.0 |
|
|
|
6,682.8 |
|
|
|
6,614.5 |
|
|
Non-insurance expenses |
|
|
(1,903.2 |
) |
|
|
(1,777.7 |
) |
|
|
(6,470.5 |
) |
|
|
(6,568.7 |
) |
|
Gain on sale and consolidation of insurance subsidiaries |
|
|
— |
|
|
|
290.7 |
|
|
|
— |
|
|
|
549.8 |
|
|
Interest expense |
|
|
(172.7 |
) |
|
|
(130.5 |
) |
|
|
(649.0 |
) |
|
|
(510.0 |
) |
|
Corporate and other expenses |
|
|
(116.2 |
) |
|
|
(158.2 |
) |
|
|
(450.2 |
) |
|
|
(430.2 |
) |
| |
|
|
(182.0 |
) |
|
|
(23.7 |
) |
|
|
(886.9 |
) |
|
|
(344.6 |
) |
| Earnings before income
taxes |
|
|
1,677.2 |
|
|
|
1,703.3 |
|
|
|
5,638.5 |
|
|
|
5,908.3 |
|
| Provision for income taxes |
|
|
(359.3 |
) |
|
|
(28.5 |
) |
|
|
(1,375.6 |
) |
|
|
(813.4 |
) |
| Net
earnings |
|
|
1,317.9 |
|
|
|
1,674.8 |
|
|
|
4,262.9 |
|
|
|
5,094.9 |
|
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
| Shareholders of Fairfax |
|
|
1,152.2 |
|
|
|
1,328.5 |
|
|
|
3,874.9 |
|
|
|
4,381.8 |
|
| Non-controlling interests |
|
|
165.7 |
|
|
|
346.3 |
|
|
|
388.0 |
|
|
|
713.1 |
|
| |
|
|
1,317.9 |
|
|
|
1,674.8 |
|
|
|
4,262.9 |
|
|
|
5,094.9 |
|
| |
|
|
|
|
|
|
|
|
| Net earnings per
share |
|
$ |
54.46 |
|
|
$ |
57.02 |
|
|
$ |
173.41 |
|
|
$ |
186.87 |
|
| Net earnings per diluted
share |
|
$ |
50.42 |
|
|
$ |
52.87 |
|
|
$ |
160.56 |
|
|
$ |
173.24 |
|
| Cash dividends paid per
share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15.00 |
|
|
$ |
10.00 |
|
| Shares outstanding
(000) (weighted average) |
|
|
21,928 |
|
|
|
23,076 |
|
|
|
22,373 |
|
|
|
23,183 |
|
| Information
onCONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOMEfor the fourth quarters and years ended
December 31, 2024 and 2023(US$ millions) |
| |
|
Fourth quarter |
|
Year ended December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
| Net
earnings |
|
1,317.9 |
|
|
1,674.8 |
|
|
4,262.9 |
|
|
5,094.9 |
|
| |
|
|
|
|
|
|
|
|
| Other comprehensive
income (loss),net of income taxes |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Items that may be subsequently reclassified to net
earnings |
|
|
|
|
|
|
|
|
|
Net unrealized foreign currency translation gains (losses) on
foreign subsidiaries |
|
(500.4 |
) |
|
123.0 |
|
|
(652.5 |
) |
|
(39.6 |
) |
|
Gains (losses) on hedge of net investment in Canadian
subsidiaries |
|
123.3 |
|
|
(52.1 |
) |
|
173.9 |
|
|
(56.6 |
) |
|
Gains (losses) on hedge of net investment in European
operations |
|
60.0 |
|
|
(34.2 |
) |
|
51.5 |
|
|
(27.8 |
) |
|
Share of other comprehensive income (loss) of associates, excluding
net losses on defined benefit plans |
|
(202.4 |
) |
|
97.3 |
|
|
(135.3 |
) |
|
30.5 |
|
|
Other |
|
(1.1 |
) |
|
(7.2 |
) |
|
(6.3 |
) |
|
0.3 |
|
| |
|
(520.6 |
) |
|
126.8 |
|
|
(568.7 |
) |
|
(93.2 |
) |
|
Net unrealized foreign currency translation losses on foreign
subsidiaries reclassified to net earnings |
|
— |
|
|
— |
|
|
— |
|
|
1.9 |
|
|
Net unrealized foreign currency translation losses on associates
reclassified to net earnings |
|
6.3 |
|
|
19.8 |
|
|
6.5 |
|
|
18.2 |
|
| |
|
(514.3 |
) |
|
146.6 |
|
|
(562.2 |
) |
|
(73.1 |
) |
|
Items that will not be subsequently reclassified to net
earnings |
|
|
|
|
|
|
|
|
|
Net gains (losses) on defined benefit plans |
|
17.0 |
|
|
(46.8 |
) |
|
44.3 |
|
|
(32.9 |
) |
|
Share of net losses on defined benefit plans of associates |
|
(0.5 |
) |
|
(1.1 |
) |
|
(1.6 |
) |
|
(5.1 |
) |
|
Other |
|
9.6 |
|
|
7.2 |
|
|
21.1 |
|
|
28.2 |
|
| |
|
26.1 |
|
|
(40.7 |
) |
|
63.8 |
|
|
(9.8 |
) |
| |
|
|
|
|
|
|
|
|
| Other comprehensive
income (loss),net of income taxes |
|
(488.2 |
) |
|
105.9 |
|
|
(498.4 |
) |
|
(82.9 |
) |
| Comprehensive
income |
|
829.7 |
|
|
1,780.7 |
|
|
3,764.5 |
|
|
5,012.0 |
|
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
| Shareholders of Fairfax |
|
724.4 |
|
|
1,436.3 |
|
|
3,455.3 |
|
|
4,353.4 |
|
| Non-controlling interests |
|
105.3 |
|
|
344.4 |
|
|
309.2 |
|
|
658.6 |
|
| |
|
829.7 |
|
|
1,780.7 |
|
|
3,764.5 |
|
|
5,012.0 |
|
SEGMENTED INFORMATION(US$ millions)
Third party gross premiums written, net premiums
written and combined ratios (on an undiscounted and discounted
basis) for the property and casualty insurance and reinsurance
operations (which excludes Life insurance and Run-off) in the
fourth quarters and full years ended December 31, 2024 and
2023 were as follows:
| Gross
Premiums Written |
|
Fourth quarter |
|
Year ended December 31, |
|
% change year-over-year |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Fourth quarter |
|
|
Full year |
|
|
Northbridge |
|
613.6 |
|
623.7 |
|
2,511.4 |
|
2,442.2 |
|
(1.6 |
)% |
|
2.8 |
% |
|
Crum & Forster |
|
1,282.6 |
|
1,296.1 |
|
5,625.9 |
|
5,217.5 |
|
(1.0 |
)% |
|
7.8 |
% |
|
Zenith National |
|
154.6 |
|
149.1 |
|
729.6 |
|
738.3 |
|
3.7 |
% |
|
(1.2 |
)% |
| North
American Insurers |
|
2,050.8 |
|
2,068.9 |
|
8,866.9 |
|
8,398.0 |
|
(0.9 |
)% |
|
5.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
1,452.4 |
|
1,461.5 |
|
7,149.8 |
|
6,840.5 |
|
(0.6 |
)% |
|
4.5 |
% |
|
Odyssey Group |
|
1,562.1 |
|
1,314.6 |
|
6,245.5 |
|
6,332.6 |
|
18.8 |
% |
|
(1.4 |
)% |
|
Brit(1) |
|
915.9 |
|
799.3 |
|
3,759.7 |
|
3,731.7 |
|
14.6 |
% |
|
0.8 |
% |
| Global
Insurers and Reinsurers |
|
3,930.4 |
|
3,575.4 |
|
17,155.0 |
|
16,904.8 |
|
9.9 |
% |
|
1.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
International Insurers and Reinsurers(2) |
|
1,458.7 |
|
934.8 |
|
6,505.5 |
|
3,587.3 |
|
56.0 |
% |
|
81.3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property
and casualty insurance and reinsurance(2) |
|
7,439.9 |
|
6,579.1 |
|
32,527.4 |
|
28,890.1 |
|
13.1 |
% |
|
12.6 |
% |
| Net Premiums
Written |
|
Fourth quarter |
|
Year ended December 31, |
|
% change year-over-year |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Fourth quarter |
|
|
Full year |
|
|
Northbridge |
|
552.5 |
|
557.0 |
|
2,226.3 |
|
2,145.4 |
|
(0.8 |
)% |
|
3.8 |
% |
|
Crum & Forster |
|
944.1 |
|
937.3 |
|
4,233.7 |
|
3,902.3 |
|
0.7 |
% |
|
8.5 |
% |
|
Zenith National |
|
158.7 |
|
153.5 |
|
741.6 |
|
755.1 |
|
3.4 |
% |
|
(1.8 |
)% |
| North American
Insurers |
|
1,655.3 |
|
1,647.8 |
|
7,201.6 |
|
6,802.8 |
|
0.5 |
% |
|
5.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
929.3 |
|
960.8 |
|
5,049.1 |
|
4,839.5 |
|
(3.3 |
)% |
|
4.3 |
% |
|
Odyssey Group |
|
1,460.2 |
|
1,162.5 |
|
5,895.0 |
|
5,740.6 |
|
25.6 |
% |
|
2.7 |
% |
|
Brit(1) |
|
787.7 |
|
686.7 |
|
3,156.8 |
|
2,982.7 |
|
14.7 |
% |
|
5.8 |
% |
| Global Insurers and
Reinsurers |
|
3,177.2 |
|
2,810.0 |
|
14,100.9 |
|
13,562.8 |
|
13.1 |
% |
|
4.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| International Insurers
and Reinsurers(2) |
|
991.8 |
|
645.9 |
|
4,033.1 |
|
2,329.8 |
|
53.6 |
% |
|
73.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property and casualty
insurance and reinsurance(2) |
|
5,824.3 |
|
5,103.7 |
|
25,335.6 |
|
22,695.4 |
|
14.1 |
% |
|
11.6 |
% |
| Combined
Ratios |
|
Undiscounted |
|
Discounted |
| |
|
Fourth quarter |
|
Year ended December 31, |
|
Fourth quarter |
|
Year ended December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Northbridge |
|
83.3 |
% |
|
91.5 |
% |
|
89.3 |
% |
|
91.1 |
% |
|
81.7 |
% |
|
82.2 |
% |
|
82.2 |
% |
|
80.8 |
% |
|
Crum & Forster |
|
92.6 |
% |
|
95.9 |
% |
|
95.0 |
% |
|
97.7 |
% |
|
82.6 |
% |
|
87.0 |
% |
|
85.9 |
% |
|
88.2 |
% |
|
Zenith National |
|
101.8 |
% |
|
87.0 |
% |
|
99.1 |
% |
|
93.8 |
% |
|
98.4 |
% |
|
82.9 |
% |
|
90.8 |
% |
|
85.6 |
% |
| North American
Insurers |
|
90.8 |
% |
|
93.6 |
% |
|
93.7 |
% |
|
95.2 |
% |
|
83.9 |
% |
|
85.2 |
% |
|
85.3 |
% |
|
85.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
83.4 |
% |
|
86.1 |
% |
|
89.1 |
% |
|
89.5 |
% |
|
72.7 |
% |
|
74.1 |
% |
|
77.5 |
% |
|
74.1 |
% |
|
Odyssey Group |
|
85.3 |
% |
|
88.1 |
% |
|
91.2 |
% |
|
93.4 |
% |
|
58.4 |
% |
|
79.8 |
% |
|
76.2 |
% |
|
81.7 |
% |
|
Brit(1) |
|
97.2 |
% |
|
88.3 |
% |
|
93.6 |
% |
|
91.9 |
% |
|
81.9 |
% |
|
80.0 |
% |
|
75.6 |
% |
|
76.6 |
% |
| Global Insurers and
Reinsurers |
|
87.3 |
% |
|
87.5 |
% |
|
91.0 |
% |
|
91.7 |
% |
|
69.7 |
% |
|
77.6 |
% |
|
76.6 |
% |
|
77.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| International Insurers
and Reinsurers |
|
95.5 |
% |
|
93.4 |
% |
|
97.3 |
% |
|
95.9 |
% |
|
85.9 |
% |
|
84.6 |
% |
|
89.1 |
% |
|
85.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and casualty
insurance and reinsurance |
|
89.5 |
% |
|
89.9 |
% |
|
92.7 |
% |
|
93.2 |
% |
|
76.6 |
% |
|
80.8 |
% |
|
81.4 |
% |
|
81.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excluding Ki Insurance,
gross premiums written increased by 17.4% and 3.7% in the fourth
quarter and full year of 2024 and net premiums written increased by
14.0% and 4.7% in the fourth quarter and full year of 2024.
Excluding Ki Insurance, the undiscounted combined ratios were 94.2%
and 92.2% in the fourth quarter and full year of 2024 and 88.4% and
91.7% in the fourth quarter and full year of 2023 (discounted
combined ratios of 80.0% and 73.3% in the fourth quarter and full
year of 2024 and 79.4% and 75.2% in the fourth quarter and full
year of 2023).(2) Excluding Gulf Insurance's gross
premiums written of $492.5 million and $2,736.3 million in the
fourth quarter and full year of 2024 and net premiums written of
$335.4 million and $1,613.7 million in the fourth quarter and full
year of 2024, gross premiums written in the International Insurers
and Reinsurers reporting segment increased by 3.4% and 5.1% in the
fourth quarter and full year of 2024 and net premiums written
increased by 1.6% and 3.8% in the fourth quarter and full year of
2024, while gross premiums written for the property and casualty
insurance and reinsurance operations increased by 5.6% and 3.1% in
the fourth quarter and full year of 2024 and net premiums written
increased by 7.5% and 4.5% in the fourth quarter and full year of
2024.
Prior year reserve development and current
period catastrophe losses, both on undiscounted basis, of the
property and casualty insurance and reinsurance operations (which
excludes Life insurance and Run-off) in the fourth quarters and
full years ended December 31, 2024 and 2023 were as
follows:
Net (Favourable) Adverse Prior Year Reserve
Development
| |
Fourth quarter |
|
Year ended December 31, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Northbridge |
(33.5 |
) |
|
(29.0 |
) |
|
(58.1 |
) |
|
(75.9 |
) |
|
Crum & Forster |
(0.2 |
) |
|
(0.1 |
) |
|
(0.8 |
) |
|
(0.5 |
) |
|
Zenith National |
(13.2 |
) |
|
(19.7 |
) |
|
(42.1 |
) |
|
(50.8 |
) |
| North American
Insurers |
(46.9 |
) |
|
(48.8 |
) |
|
(101.0 |
) |
|
(127.2 |
) |
| |
|
|
|
|
|
|
|
|
Allied World |
(20.9 |
) |
|
1.4 |
|
|
(22.2 |
) |
|
— |
|
|
Odyssey Group |
(156.4 |
) |
|
(86.1 |
) |
|
(207.4 |
) |
|
(78.6 |
) |
|
Brit |
(16.2 |
) |
|
(2.8 |
) |
|
(27.8 |
) |
|
(3.0 |
) |
| Global Insurers and
Reinsurers |
(193.5 |
) |
|
(87.5 |
) |
|
(257.4 |
) |
|
(81.6 |
) |
| |
|
|
|
|
|
|
|
| International Insurers
and Reinsurers |
(61.0 |
) |
|
(15.4 |
) |
|
(235.2 |
) |
|
(100.8 |
) |
| |
|
|
|
|
|
|
|
| Property and casualty
insurance and reinsurance |
(301.4 |
) |
|
(151.7 |
) |
|
(593.6 |
) |
|
(309.6 |
) |
Current Period Catastrophe
Losses
| |
|
Fourth quarter |
|
|
Year ended December 31, |
| |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
| |
Losses(1) |
|
Combinedratio
impact(2) |
|
Losses(1) |
|
Combinedratio impact(2) |
|
Losses(1) |
|
Combinedratio
impact(2) |
|
Losses(1) |
|
Combinedratio impact(2) |
|
Hurricane Milton |
|
235.3 |
|
|
3.8 |
|
|
|
— |
|
|
— |
|
|
|
235.3 |
|
|
1.0 |
|
|
|
— |
|
|
— |
|
|
Hurricane Helene |
|
68.9 |
|
|
1.1 |
|
|
|
— |
|
|
— |
|
|
|
174.0 |
|
|
0.7 |
|
|
|
— |
|
|
— |
|
|
Canadian events(3) |
|
10.0 |
|
|
0.2 |
|
|
|
— |
|
|
— |
|
|
|
142.1 |
|
|
0.6 |
|
|
|
— |
|
|
— |
|
|
Dubai floods |
|
17.8 |
|
|
0.3 |
|
|
|
— |
|
|
— |
|
|
|
89.1 |
|
|
0.4 |
|
|
|
— |
|
|
— |
|
|
Hawaii wildfires |
|
— |
|
|
— |
|
|
|
3.3 |
|
|
0.1 |
|
|
|
— |
|
|
— |
|
|
|
183.6 |
|
|
0.8 |
|
|
Turkey earthquake |
|
— |
|
|
— |
|
|
|
1.2 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
113.0 |
|
|
0.5 |
|
|
Italy hailstorms |
|
— |
|
|
— |
|
|
|
30.8 |
|
|
0.5 |
|
|
|
— |
|
|
— |
|
|
|
47.2 |
|
|
0.2 |
|
|
Other |
|
67.2 |
|
|
1.0 |
|
|
|
146.6 |
|
|
2.6 |
|
|
|
458.8 |
|
|
1.8 |
|
|
|
553.5 |
|
|
2.5 |
|
| Total catastrophe losses |
|
399.2 |
|
|
6.4 |
|
|
|
181.9 |
|
|
3.2 |
|
|
|
1,099.3 |
|
|
4.5 |
|
|
|
897.3 |
|
|
4.0 |
|
(1) Net of reinstatement
premiums.(2) Expressed in combined ratio
points.(3) Comprised of the Calgary hailstorm,
flooding in Ontario and Quebec and the Jasper wildfire.
Certain statements contained herein may
constitute forward-looking statements and are made pursuant to the
"safe harbour" provisions of the United States Private Securities
Litigation Reform Act of 1995 and any applicable Canadian
securities regulations. Such forward-looking statements are subject
to known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of
Fairfax to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: our ability to complete acquisitions and other
strategic transactions on the terms and timeframes contemplated,
and to achieve the anticipated benefits therefrom; a reduction in
net earnings if our loss reserves are insufficient; underwriting
losses on the risks we insure that are higher than expected; the
occurrence of catastrophic events with a frequency or severity
exceeding our estimates; changes in market variables, including
unfavourable changes in interest rates, foreign exchange rates,
equity prices and credit spreads, which could negatively affect our
operating results and investment portfolio; the cycles of the
insurance market and general economic conditions, which can
substantially influence our and our competitors’ premium rates and
capacity to write new business; insufficient reserves for asbestos,
environmental and other latent claims; exposure to credit risk in
the event our reinsurers fail to make payments to us under our
reinsurance arrangements; exposure to credit risk in the event our
insureds, insurance producers or reinsurance intermediaries fail to
remit premiums that are owed to us or failure by our insureds to
reimburse us for deductibles that are paid by us on their behalf;
our inability to maintain our long term debt ratings, the inability
of our subsidiaries to maintain financial or claims paying ability
ratings and the impact of a downgrade of such ratings on derivative
transactions that we or our subsidiaries have entered into; risks
associated with implementing our business strategies; the timing of
claims payments being sooner or the receipt of reinsurance
recoverables being later than anticipated by us; risks associated
with any use we may make of derivative instruments; the failure of
any hedging methods we may employ to achieve their desired risk
management objective; a decrease in the level of demand for
insurance or reinsurance products, or increased competition in the
insurance industry; the impact of emerging claim and coverage
issues or the failure of any of the loss limitation methods we
employ; our inability to access cash of our subsidiaries; an
increase in the amount of capital that we and our subsidiaries are
required to maintain and our inability to obtain required levels of
capital on favourable terms, if at all; the loss of key employees;
our inability to obtain reinsurance coverage in sufficient amounts,
at reasonable prices or on terms that adequately protect us; the
passage of legislation subjecting our businesses to additional
adverse requirements, supervision or regulation, including
additional tax regulation, in the United States, Bermuda, Canada or
other jurisdictions in which we operate; risks associated with
applicable laws and regulations relating to sanctions and corrupt
practices in foreign jurisdictions in which we operate; risks
associated with government investigations of, and litigation and
negative publicity related to, insurance industry practice or any
other conduct; risks associated with political and other
developments in foreign jurisdictions in which we operate; risks
associated with legal or regulatory proceedings or significant
litigation; failures or security breaches of our computer and data
processing systems; the influence exercisable by our significant
shareholder; adverse fluctuations in foreign currency exchange
rates; our dependence on independent brokers over whom we exercise
little control; operational, financial reporting and other risks
associated with IFRS 17; financial reporting risks relating to
deferred taxes associated with amendments to IAS 12; impairment of
the carrying value of our goodwill, indefinite-lived intangible
assets or investments in associates; our failure to realize
deferred income tax assets; technological or other change which
adversely impacts demand, or the premiums payable, for the
insurance coverages we offer; disruptions of our information
technology systems; assessments and shared market mechanisms which
may adversely affect our insurance subsidiaries; and risks
associated with the conflicts in Ukraine and Israel and the
development of other geopolitical events and economic disruptions
worldwide. Additional risks and uncertainties are described in our
most recently issued Annual Report, which is available at
www.fairfax.ca, and in our Base Shelf Prospectus (under "Risk
Factors") filed with the securities regulatory authorities in
Canada, which is available on SEDAR+ at www.sedarplus.ca. Fairfax
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
securities law.
GLOSSARY OF NON-GAAP AND OTHER FINANCIAL
MEASURESManagement analyzes and assesses the underlying
insurance and reinsurance operations, and the financial position of
the consolidated company, through various measures and ratios.
Certain of the measures and ratios provided in this news release,
which have been used consistently and disclosed regularly in the
company's Annual Reports and interim financial reporting, do not
have a prescribed meaning under IFRS Accounting Standards and may
not be comparable to similar measures presented by other companies.
Those measures and ratios are described below.
Underwriting profit (loss) – A
measure of underwriting activity calculated as insurance service
result with the effects of discounting for net claims incurred in
the current period and changes in the risk adjustment and other
excluded, and other insurance operating expenses deducted, as shown
in the table on page 2 of this news release.
Operating income (loss) – This
measure is used by the company as a pre-tax performance measure of
operations that excludes net finance income (expense) from
insurance contracts and reinsurance contract assets held, net gains
(losses) on investments, interest expense and corporate overhead
and other, and that includes interest and dividends and share of
profit (loss) of associates, which the company consider to be more
predictable sources of investment income. Operating income (loss)
includes the insurance service result and other insurance operating
expenses of the insurance and reinsurance operations and the
revenue and expenses of the non-insurance companies. A
reconciliation of operating income (loss) to earnings before income
taxes, the most directly comparable IFRS measure, is presented in
the table on page 2 of this news release.
Adjusted operating income
(loss) – Calculated as the sum of underwriting profit
(loss), interest and dividends and share of profit of associates,
this measure is used in a similar manner to operating income
(loss).
Gross premiums written – An
indicator of the volume of new business generated, it represents
the total premiums on policies issued by the company during a
specified period, irrespective of the portion ceded or earned.
Net premiums written – A
measure of the new business volume and insurance risk that the
company has chosen to retain from new business generated, it
represents gross premiums written less amounts ceded to
reinsurers.
Undiscounted combined ratio – A
traditional performance measure of underwriting results of property
and casualty companies, it is calculated by the company as
underwriting expense (comprised of losses on claims, commissions
and other underwriting expenses) expressed as a percentage of net
premiums earned. Net premiums earned is calculated as insurance
revenue less cost of reinsurance, adjusted for net commission
expense on assumed business and other. Underwriting expense is
calculated as insurance service expenses less recoveries of
insurance service expenses and other insurance operating expenses,
adjusted for the effects of discounting, risk adjustment and other.
The combined ratio is used by the company for comparisons to
historical underwriting results, to the underwriting results of
competitors and to the broader property and casualty industry, as
well as for evaluating the performance of individual operating
companies. The company may also refer to combined ratio
points, which expresses, on an undiscounted basis, a loss
that is a component of losses on claims, net, such as a catastrophe
loss or prior year reserve development, as a percentage of net
premiums earned during the same period.
Discounted combined ratio – A
performance measure of underwriting results under IFRS 17, it is
calculated by the company as insurance service expenses less
recoveries of insurance service expenses, expressed as a percentage
of net insurance revenue. Net insurance revenue is calculated as
insurance revenue less cost of reinsurance, both as presented in
the company's consolidated statements of earnings.
Float – In the insurance
industry the funds available for investment that arise as an
insurance or reinsurance operation receives premiums in advance of
the payment of claims is referred to as float. The company
calculates its float as the sum of its insurance contract
liabilities and insurance contract payables, less the sum of its
reinsurance contract assets held and insurance contract
receivables, adjusted to remove the effects of discounting and risk
adjustment from insurance contract liabilities and reinsurance
contract assets held.
Book value per basic share –
The company considers book value per basic share a key performance
measure as one of the company’s stated objectives is to build long
term shareholder value by compounding book value per basic share by
15% annually over the long term. This measure is calculated by the
company as common shareholders' equity divided by the number of
common shares effectively outstanding. Increase or decrease
in book value per basic share adjusted for the $15.00 per common
share dividend is calculated in the same manner except
that it assumes the annual $15.00 per common share dividend paid in
the first quarter of 2024 was not paid and book value per basic
share at the end of the current reporting period would be higher as
a result.
Total debt to total capital ratio,
excluding non-insurance companies – The company uses this
ratio to assess the amount of leverage employed in its operations.
As the borrowings of the non-insurance companies are non-recourse
to the Fairfax holding company, this ratio excludes the borrowings
and non-controlling interests of the non-insurance companies in
calculating total debt and total capital, respectively.
| |
December 31, 2024 |
|
December 31, 2023 |
| |
As presented in information on the consolidated balance
sheet |
|
|
Adjust for consolidatednon-insurance
companies |
|
Excluding consolidatednon-insurance
companies |
|
|
As presented in information on the consolidated balance sheet |
|
|
Adjust for consolidatednon-insurance companies |
|
Excluding consolidatednon-insurance companies |
|
|
Total debt |
11,753.7 |
|
|
2,895.5 |
|
8,858.2 |
|
|
9,723.5 |
|
|
1,899.0 |
|
7,824.5 |
|
| Total equity |
28,349.2 |
|
|
1,541.0 |
|
26,808.2 |
|
|
27,700.9 |
|
|
1,634.6 |
|
26,066.3 |
|
| Total capital |
40,102.9 |
|
|
|
|
35,666.4 |
|
|
37,424.4 |
|
|
|
|
33,890.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total debt to total capital
ratio |
29.3 |
% |
|
|
|
24.8 |
% |
|
26.0 |
% |
|
|
|
23.1 |
% |
Excess (deficiency) of fair value over
carrying value – These pre-tax amounts, while not included
in the calculation of book value per basic share, are regularly
reviewed by management as an indicator of investment performance
for the company's non-insurance associates and market traded
consolidated non-insurance subsidiaries that are considered to be
portfolio investments, which are Fairfax India, Thomas Cook India,
Dexterra Group, Boat Rocker and Farmers Edge (privatized in
2024).
In the determination of this non-GAAP
performance measure the fair value and carrying value of
non-insurance associates at December 31, 2024 were $7,394.9
and $6,615.9 (December 31, 2023 - $6,825.9 and $6,221.7),
which are the IFRS fair values and carrying values included in the
company's information on consolidated balance sheets as at
December 31, 2024 and December 31, 2023. Excluded from
this performance measure are (i) insurance and reinsurance
associates and (ii) associates held by market traded consolidated
non-insurance companies that are already included in the carrying
values of those companies.
The fair values of market traded consolidated
non-insurance companies are calculated as the company's pro rata
ownership share of each subsidiary's market capitalization as
determined by traded share prices at the financial statement date.
The carrying value of each subsidiary represents Fairfax's share of
that subsidiary's net assets, calculated as the subsidiary's total
assets less total liabilities and non-controlling interests. All
balances used in the calculation of carrying value are those
included in the company's information on consolidated balance
sheets as at December 31, 2024 and December 31, 2023.
Fairfax Financial (TSX:FFH)
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De Jan 2025 à Fév 2025
Fairfax Financial (TSX:FFH)
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De Fév 2024 à Fév 2025
