Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) announces
net earnings of $734.4 million ($28.80 net earnings per diluted
share after payment of preferred share dividends) in the second
quarter of 2023 compared to a net loss of $32.0 million ($1.83 net
loss per diluted share after payment of preferred share dividends)
in the second quarter of 2022. Book value per basic share at
June 30, 2023 was $834.28 compared to $762.28 at
December 31, 2022 (an increase of 10.8% adjusted for the $10
per common share dividend paid in the first quarter of 2023).
"During the second quarter we continued to build
on our great start to 2023, with our property and casualty
insurance and reinsurance operations producing adjusted operating
income of $913.5 million ($1,526.4 million including discounting,
net of risk adjustment on claims of $612.9 million),
reflecting increased interest and dividends, strong insurance
underwriting results and stable share of profit of associates. Our
underwriting performance in the second quarter of 2023 continued to
produce favourable results, with growth in gross premiums written
of 10.0% and net premiums written of 8.4%, primarily reflecting new
business and continued incremental rate increases in certain lines
of business. We achieved underwriting profit of $337.5 million on
an undiscounted basis and a consolidated combined ratio of 93.9%
for the quarter.
"The new reporting requirement IFRS 17 has not
changed the way management evaluates the business and we continue
to be focused on underwriting profit on an undiscounted basis with
strong reserving. The effects of discounting and risk adjustment in
the quarter resulted in an increase to pre-tax earnings of $221.2
million.
"Net losses on investments of $342.1 million in
the quarter was principally comprised of mark to market losses on
bonds of $405.3 million due to continued rising interest rates,
which was partially offset by mark to market gains on common stocks
of $163.7 million.
"We continue to focus on being soundly financed
and ended the quarter with approximately $1.1 billion in cash and
investments in the holding company and our credit facility
undrawn," said Prem Watsa, Chairman and Chief Executive
Officer.
The table below presents the sources of the
company's net earnings in a format which the company has
consistently used as it believes it assists in understanding
Fairfax:
|
Second quarter |
|
First six months |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
($ millions) |
Gross premiums written |
8,042.5 |
|
|
7,307.7 |
|
|
15,181.0 |
|
|
13,970.6 |
|
Net
premiums written |
6,199.9 |
|
|
5,705.0 |
|
|
11,863.0 |
|
|
11,047.7 |
|
Net
insurance revenue |
5,392.1 |
|
|
5,063.9 |
|
|
10,552.0 |
|
|
9,738.3 |
|
|
|
|
|
|
|
|
|
Sources of net earnings |
|
|
|
|
|
|
|
Operating income - Property and Casualty Insurance and
Reinsurance: |
|
|
|
|
|
|
|
Insurance service result: |
|
|
|
|
|
|
|
North American Insurers |
249.2 |
|
|
260.7 |
|
|
525.0 |
|
|
472.3 |
|
Global Insurers and Reinsurers |
820.4 |
|
|
503.8 |
|
|
1,445.7 |
|
|
902.9 |
|
International Insurers and Reinsurers |
74.7 |
|
|
57.5 |
|
|
151.3 |
|
|
108.7 |
|
Insurance service result |
1,144.3 |
|
|
822.0 |
|
|
2,122.0 |
|
|
1,483.9 |
|
Other insurance operating expenses |
(193.9 |
) |
|
(184.3 |
) |
|
(391.5 |
) |
|
(354.3 |
) |
|
950.4 |
|
|
637.7 |
|
|
1,730.5 |
|
|
1,129.6 |
|
Interest and dividends |
407.4 |
|
|
155.6 |
|
|
718.9 |
|
|
266.1 |
|
Share of profit of associates |
168.6 |
|
|
188.0 |
|
|
386.3 |
|
|
315.5 |
|
Operating income - Property and Casualty Insurance and
Reinsurance |
1,526.4 |
|
|
981.3 |
|
|
2,835.7 |
|
|
1,711.2 |
|
Operating income - Life insurance and Run-off |
6.3 |
|
|
61.9 |
|
|
9.7 |
|
|
106.5 |
|
Operating income - Non-insurance companies |
36.9 |
|
|
7.5 |
|
|
36.3 |
|
|
34.6 |
|
Net finance income (expense) from insurance contracts and
reinsurance contract assets held |
(424.0 |
) |
|
730.1 |
|
|
(587.4 |
) |
|
1,149.1 |
|
Net
gains (losses) on investments |
(342.1 |
) |
|
(1,416.7 |
) |
|
429.1 |
|
|
(1,611.9 |
) |
Gain on sale of insurance subsidiary |
259.1 |
|
|
— |
|
|
259.1 |
|
|
— |
|
Interest expense |
(130.4 |
) |
|
(108.8 |
) |
|
(254.7 |
) |
|
(212.7 |
) |
Corporate overhead and other |
12.4 |
|
|
(42.8 |
) |
|
(14.1 |
) |
|
(59.1 |
) |
Earnings before income taxes |
944.6 |
|
|
212.5 |
|
|
2,713.7 |
|
|
1,117.7 |
|
Provision for income taxes |
(115.5 |
) |
|
(163.2 |
) |
|
(480.6 |
) |
|
(369.6 |
) |
Net earnings |
829.1 |
|
|
49.3 |
|
|
2,233.1 |
|
|
748.1 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Shareholders of Fairfax |
734.4 |
|
|
(32.0 |
) |
|
1,984.4 |
|
|
556.7 |
|
Non-controlling interests |
94.7 |
|
|
81.3 |
|
|
248.7 |
|
|
191.4 |
|
|
829.1 |
|
|
49.3 |
|
|
2,233.1 |
|
|
748.1 |
|
The table below presents the insurance service
result for the property and casualty insurance and reinsurance
operations reconciled to underwriting profit (loss), 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 on 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, which are
presented in insurance service expenses and recoveries of insurance
service expenses.
|
Second quarter |
|
First six months |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
($ millions) |
Insurance service result |
1,144.3 |
|
|
822.0 |
|
|
2,122.0 |
|
|
1,483.9 |
|
Other insurance operating expenses |
(193.9 |
) |
|
(184.3 |
) |
|
(391.5 |
) |
|
(354.3 |
) |
Discounting of losses and ceded losses on claims recorded in the
period |
(606.1 |
) |
|
(312.6 |
) |
|
(1,028.5 |
) |
|
(488.3 |
) |
Changes in the risk adjustment and other |
(6.8 |
) |
|
(23.4 |
) |
|
(50.7 |
) |
|
(15.2 |
) |
Underwriting profit |
337.5 |
|
|
301.7 |
|
|
651.3 |
|
|
626.1 |
|
Interest and dividends |
407.4 |
|
|
155.6 |
|
|
718.9 |
|
|
266.1 |
|
Share of profit of associates |
168.6 |
|
|
188.0 |
|
|
386.3 |
|
|
315.5 |
|
Adjusted operating income - Property and Casualty Insurance
and Reinsurance |
913.5 |
|
|
645.3 |
|
|
1,756.5 |
|
|
1,207.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights for the second quarter of 2023 (with
comparisons to the second quarter of 2022 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 8.4% to $6,134.4 million from
$5,658.6 million, while gross premiums written increased by
10.0%.
- The consolidated
combined ratio of the property and casualty insurance and
reinsurance operations was 93.9%, producing an underwriting profit
of $337.5 million, compared to a combined ratio of 94.1% and
an underwriting profit of $301.7 million in 2022, driven by
continued growth in business volumes (net insurance revenue
increased by 6.2%), prudent expense management and decreased
catastrophe losses of $134.8 million or 2.4 combined ratio
points in the quarter.
- Adjusted
operating income of the property and casualty insurance and
reinsurance operations increased by 41.6% to $913.5 million from
$645.3 million, principally due to increased interest and dividend
income and strong underwriting profit.
- Net finance
expense from insurance contracts and reinsurance contract assets
held of $424.0 million in the second quarter of 2023 predominantly
consisted of interest accretion resulting from the unwinding of the
effects from discounting associated with net claim payments made
during the period, compared to net finance income from insurance
contracts and reinsurance contract assets held of $730.1 million in
the second quarter of 2022 which reflected the benefit of changes
in discount rates, that was only partially offset by the interest
accretion.
- Consolidated
interest and dividends increased significantly in the quarter from
$203.1 million to $464.6 million. At June 30, 2023 the
company's insurance and reinsurance companies held portfolio
investments of $55.2 billion (excluding Fairfax India's portfolio
of $2.0 billion), of which approximately $6.5 billion was in cash
and short term investments representing approximately 11.7% of
those portfolio investments. During the first six months of 2023
the company used cash and net proceeds from sales and maturities of
U.S. treasury and other government short-term investments and short
dated U.S. treasuries to purchase $6.4 billion of U.S. treasuries
with maturities between 3 to 5 years and net purchases of first
mortgage loans of $2.0 billion with maturities less than 3 years,
which will benefit interest and dividend income in the remainder of
2023.
- Consolidated
share of profit of associates of $269.2 million principally
reflected share of profit of $130.5 million from Eurobank, $46.2
million from EXCO Resources Inc. and $24.1 million from Gulf
Insurance. Share of profit of Poseidon (formerly Atlas) decreased
to $6.3 million from $72.0 million due to higher interest expense,
interest rate hedging losses (compared to hedging gains in the
prior year) that fluctuate quarterly, and transaction costs related
to the first quarter privatization of Poseidon. The company expects
Poseidon’s earnings will normalize throughout the year.
- Net losses on investments of $342.1
million consisted of the following:
|
|
|
|
|
|
|
Second quarter of 2023 |
|
($ millions) |
|
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
Net
gains (losses) on: |
|
|
|
|
|
Equity exposures |
(82.0 |
) |
|
245.7 |
|
|
163.7 |
|
Bonds |
(72.5 |
) |
|
(332.8 |
) |
|
(405.3 |
) |
Other |
(51.0 |
) |
|
(49.5 |
) |
|
(100.5 |
) |
|
(205.5 |
) |
|
(136.6 |
) |
|
(342.1 |
) |
|
First six months of 2023 |
|
($ millions) |
|
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
Net
gains (losses) on: |
|
|
|
|
|
Equity exposures |
90.7 |
|
|
483.4 |
|
574.1 |
|
Bonds |
(404.4 |
) |
|
318.1 |
|
(86.3 |
) |
Other |
(114.1 |
) |
|
55.4 |
|
(58.7 |
) |
|
(427.8 |
) |
|
856.9 |
|
429.1 |
|
|
|
|
|
|
|
|
|
Net gains on equity exposures of $163.7 million
was primarily comprised of unrealized gains on common stocks,
convertible bonds and preferred stocks and net gains on equity
derivatives. At June 30, 2023 the company continued to hold
equity total return swaps on 1,964,155 Fairfax subordinate voting
shares with an original notional amount of $732.5 million
(Cdn$935.0 million) or approximately $372.96 (Cdn$476.03) per
share, on which the company recorded $144.9 million of net gains in
the second quarter of 2023.
Net losses on bonds of $405.3 million included
net losses of $318.9 million on U.S. treasuries and net losses of
$64.7 million on U.S. treasury bond forward contracts.
- During the
second quarter the company, in partnership with Kennedy Wilson,
acquired $1.8 billion of first mortgage loans from Pacific Western
Bank; the average annual return on the capital deployed with the
loans is expected to exceed 10%. The company's fixed income
portfolio is conservatively positioned with effectively 74% of the
fixed income portfolio invested in government bonds and only 15% in
corporate bonds, primarily short-dated.
- On May 10, 2023
Brit completed the sale of Ambridge Group, its Managing General
Underwriter operations, to Amynta Group and recorded a pre-tax gain
of $259.1 million, which is presented as gain on sale of insurance
subsidiary in the consolidated statements of earnings. Brit
subsequently paid a dividend of $275.0 million to the holding
company.
- Excluding the
impact of Fairfax India’s performance fees to Fairfax (an accrual
of $35.6 million in the second quarter of 2023 and a reversal of
$47.0 million in the second quarter of 2022), which are offset upon
consolidation, and the impact of a non-cash impairment charge
recorded in the second quarter of 2022 of $109.2 million related to
the company's investment in Farmers Edge, operating income of the
non-insurance companies was stable at $72.5 million compared to
$69.7 million in 2022, principally reflecting higher business
volume at Thomas Cook India and higher share of profit of
associates at Fairfax India.
- Interest expense
of $130.4 million (inclusive of $12.6 million on leases) was
principally comprised of $82.6 million incurred on borrowings by
the holding company and the insurance and reinsurance companies and
$35.2 million incurred on borrowings by the non-insurance companies
(which are non-recourse to the holding company).
- On July 14, 2023
the company extended the term of its $2.0 billion unsecured
revolving credit facility with a syndicate of lenders from June 29,
2027 to July 14, 2028.
- At June 30,
2023 the excess of fair value over carrying value of investments in
non-insurance associates and consolidated non-insurance
subsidiaries was $760.8 million.
- The company's
total debt to total capital ratio, excluding non-insurance
companies, decreased to 22.5% at June 30, 2023 compared to
23.7% at December 31, 2022, principally reflecting increased
common shareholders' equity as a result of the strong net earnings
reported in the first six months.
- During the first six months of 2023
the company purchased 179,744 of its subordinate voting shares for
cancellation at an aggregate cost of $114.9 million.
There were 23.2 million and 23.8 million
weighted average common shares effectively outstanding during the
second quarters of 2023 and 2022 respectively. At June 30,
2023 there were 23,202,070 common shares effectively
outstanding.
Consolidated balance sheet, earnings and
comprehensive income information, together with segmented premium
and combined ratio information, follow and form part of this news
release.
As previously announced, Fairfax will hold a
conference call to discuss its second quarter 2023 results at 8:30
a.m. Eastern time on Friday August 4, 2023. The call,
consisting of a presentation by the company followed by a question
period, may be accessed at 1 (888) 390-0867 (Canada or U.S.) or 1
(212) 547-0141 (International) with the passcode “FAIRFAX”. A
replay of the call will be available from shortly after the
termination of the call until 5:00 p.m. Eastern time on
Friday, August 18, 2023. The replay may be accessed at 1 (866)
469-7806 (Canada or U.S.) or 1 (203) 369-1474 (International).
Fairfax Financial Holdings Limited is a holding
company which, through its subsidiaries, is primarily engaged in
property and casualty insurance and reinsurance and the associated
investment management.
For further
information, contact: |
John
Varnell |
|
Vice President, Corporate Development |
|
(416) 367-4941 |
|
|
CONSOLIDATED BALANCE SHEETSas at June 30,
2023, December 31, 2022 and January 1, 2022 (US$ millions
except per share amounts)
|
|
June 30, 2023 |
|
December 31, 2022 |
January 1, 2022 |
|
|
|
|
Restated(1) |
|
Restated(1) |
Assets |
|
|
|
|
|
Holding company cash and investments (including assets pledged for
derivative obligations – $147.3; December 31, 2022 – $104.6;
January 1, 2022 – $111.0) |
|
|
1,120.1 |
|
|
1,345.8 |
|
|
1,478.3 |
Insurance contract receivables |
|
|
801.5 |
|
|
648.9 |
|
|
650.1 |
|
|
|
|
|
|
|
Portfolio investments |
|
|
|
|
|
|
Subsidiary cash and short term investments (including restricted
cash and cash equivalents – $739.5; December 31, 2022 – $854.4;
January 1, 2022 – $1,246.4) |
|
|
6,459.4 |
|
|
9,368.2 |
|
|
21,799.5 |
Bonds (cost $33,485.4; December 31, 2022 – $29,534.4; January 1,
2022 – $13,836.3) |
|
|
32,970.7 |
|
|
28,578.5 |
|
|
14,091.2 |
Preferred stocks (cost $899.8; December 31, 2022 – $808.3; January
1, 2022 – $576.6) |
|
|
2,435.3 |
|
|
2,338.0 |
|
|
2,405.9 |
Common stocks (cost $6,031.7; December 31, 2022 – $5,162.6; January
1, 2022 – $4,717.2) |
|
|
6,312.2 |
|
|
5,124.3 |
|
|
5,468.9 |
Investments in associates (fair value $7,495.9; December 31, 2022 –
$6,772.9; January 1, 2022 – $5,671.9) |
|
|
6,230.9 |
|
|
6,093.1 |
|
|
4,749.2 |
Derivatives and other invested assets (cost $919.0; December 31,
2022 – $869.8; January 1, 2022 – $888.2) |
|
|
1,042.3 |
|
|
828.5 |
|
|
991.2 |
Assets pledged for derivative obligations (cost $155.3; December
31, 2022 – $52.4; January 1, 2022 – $119.6) |
|
|
155.5 |
|
|
51.3 |
|
|
119.6 |
Fairfax India cash, portfolio investments and associates (fair
value $3,254.6; December 31, 2022 – $3,079.6; January 1, 2022 –
$3,336.4) |
|
|
2,011.9 |
|
|
1,942.8 |
|
|
2,066.0 |
|
|
|
57,618.2 |
|
|
54,324.7 |
|
|
51,691.5 |
|
|
|
|
|
|
|
Reinsurance contract assets held |
|
|
9,763.6 |
|
|
9,691.5 |
|
|
9,893.1 |
Deferred income tax assets |
|
|
140.6 |
|
|
137.3 |
|
|
449.1 |
Goodwill and intangible assets |
|
|
5,636.8 |
|
|
5,689.0 |
|
|
5,928.2 |
Other assets |
|
|
7,224.5 |
|
|
6,981.3 |
|
|
6,034.1 |
Total assets |
|
|
82,305.3 |
|
|
78,818.5 |
|
|
76,124.4 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
4,608.5 |
|
|
4,806.6 |
|
|
4,587.6 |
Derivative obligations |
|
|
415.4 |
|
|
191.0 |
|
|
152.9 |
Deferred income tax liabilities |
|
|
1,030.1 |
|
|
868.0 |
|
|
586.5 |
Insurance contract payables |
|
|
1,478.3 |
|
|
1,402.7 |
|
|
1,826.0 |
Insurance contract liabilities |
|
|
41,341.3 |
|
|
39,906.6 |
|
|
39,742.2 |
Borrowings – holding company and insurance and reinsurance
companies |
|
|
6,686.7 |
|
|
6,621.0 |
|
|
6,129.3 |
Borrowings – non-insurance companies |
|
|
2,126.1 |
|
|
2,003.9 |
|
|
1,623.7 |
Total liabilities |
|
|
57,686.4 |
|
|
55,799.8 |
|
|
54,648.2 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common shareholders’ equity |
|
|
19,357.1 |
|
|
17,780.3 |
|
|
15,199.8 |
Preferred stock |
|
|
1,335.5 |
|
|
1,335.5 |
|
|
1,335.5 |
Shareholders’ equity attributable to shareholders of Fairfax |
|
|
20,692.6 |
|
|
19,115.8 |
|
|
16,535.3 |
Non-controlling interests |
|
|
3,926.3 |
|
|
3,902.9 |
|
|
4,940.9 |
Total equity |
|
|
24,618.9 |
|
|
23,018.7 |
|
|
21,476.2 |
|
|
|
82,305.3 |
|
|
78,818.5 |
|
|
76,124.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per basic share |
|
$ |
834.28 |
|
$ |
762.28 |
|
$ |
636.89 |
(1) Restated for the transition to IFRS 17.
CONSOLIDATED STATEMENTS OF EARNINGSfor the
three and six months ended June 30, 2023 and 2022(US$ millions
except per share amounts)
|
|
Second quarter |
|
First six months |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Restated(1) |
|
|
|
Restated(1) |
Insurance |
|
|
|
|
|
|
|
|
Insurance revenue |
|
|
6,654.2 |
|
|
|
6,121.4 |
|
|
|
12,934.1 |
|
|
|
11,759.6 |
|
Insurance service expenses |
|
|
(5,039.5 |
) |
|
|
(5,162.5 |
) |
|
|
(10,216.9 |
) |
|
|
(9,860.3 |
) |
Net insurance result |
|
|
1,614.7 |
|
|
|
958.9 |
|
|
|
2,717.2 |
|
|
|
1,899.3 |
|
Cost of reinsurance |
|
|
(1,262.1 |
) |
|
|
(1,057.5 |
) |
|
|
(2,382.1 |
) |
|
|
(2,021.3 |
) |
Recoveries of insurance service expenses |
|
|
758.9 |
|
|
|
941.3 |
|
|
|
1,763.2 |
|
|
|
1,632.4 |
|
Net reinsurance result |
|
|
(503.2 |
) |
|
|
(116.2 |
) |
|
|
(618.9 |
) |
|
|
(388.9 |
) |
Insurance service result |
|
|
1,111.5 |
|
|
|
842.7 |
|
|
|
2,098.3 |
|
|
|
1,510.4 |
|
Other insurance operating expenses |
|
|
(205.4 |
) |
|
|
(167.8 |
) |
|
|
(451.5 |
) |
|
|
(312.2 |
) |
Net finance income (expense) from insurance contracts |
|
|
(585.3 |
) |
|
|
932.3 |
|
|
|
(811.1 |
) |
|
|
1,445.9 |
|
Net finance income (expense) from reinsurance contract assets
held |
|
|
161.3 |
|
|
|
(202.2 |
) |
|
|
223.7 |
|
|
|
(296.8 |
) |
|
|
|
482.1 |
|
|
|
1,405.0 |
|
|
|
1,059.4 |
|
|
|
2,347.3 |
|
Investment income |
|
|
|
|
|
|
|
|
Interest and dividends |
|
|
464.6 |
|
|
|
203.1 |
|
|
|
846.9 |
|
|
|
372.0 |
|
Share of profit of associates |
|
|
269.2 |
|
|
|
265.7 |
|
|
|
603.0 |
|
|
|
446.3 |
|
Net gains (losses) on investments |
|
|
(342.1 |
) |
|
|
(1,416.7 |
) |
|
|
429.1 |
|
|
|
(1,611.9 |
) |
|
|
|
391.7 |
|
|
|
(947.9 |
) |
|
|
1,879.0 |
|
|
|
(793.6 |
) |
Other revenue and expenses |
|
|
|
|
|
|
|
|
Non-insurance revenue |
|
|
1,559.6 |
|
|
|
1,449.2 |
|
|
|
3,118.0 |
|
|
|
2,515.5 |
|
Non-insurance expenses |
|
|
(1,527.5 |
) |
|
|
(1,509.3 |
) |
|
|
(3,150.6 |
) |
|
|
(2,584.3 |
) |
Gain on sale of insurance subsidiary |
|
|
259.1 |
|
|
|
— |
|
|
|
259.1 |
|
|
|
— |
|
Interest expense |
|
|
(130.4 |
) |
|
|
(108.8 |
) |
|
|
(254.7 |
) |
|
|
(212.7 |
) |
Corporate and other expenses |
|
|
(90.0 |
) |
|
|
(75.7 |
) |
|
|
(196.5 |
) |
|
|
(154.5 |
) |
|
|
|
70.8 |
|
|
|
(244.6 |
) |
|
|
(224.7 |
) |
|
|
(436.0 |
) |
Earnings before income taxes |
|
|
944.6 |
|
|
|
212.5 |
|
|
|
2,713.7 |
|
|
|
1,117.7 |
|
Provision for income taxes |
|
|
(115.5 |
) |
|
|
(163.2 |
) |
|
|
(480.6 |
) |
|
|
(369.6 |
) |
Net earnings |
|
|
829.1 |
|
|
|
49.3 |
|
|
|
2,233.1 |
|
|
|
748.1 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
Shareholders of Fairfax |
|
|
734.4 |
|
|
|
(32.0 |
) |
|
|
1,984.4 |
|
|
|
556.7 |
|
Non-controlling interests |
|
|
94.7 |
|
|
|
81.3 |
|
|
|
248.7 |
|
|
|
191.4 |
|
|
|
|
829.1 |
|
|
|
49.3 |
|
|
|
2,233.1 |
|
|
|
748.1 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share |
|
$ |
31.10 |
|
|
$ |
(1.83 |
) |
|
$ |
84.30 |
|
|
$ |
22.45 |
|
Net earnings (loss) per diluted share |
|
$ |
28.80 |
|
|
$ |
(1.83 |
) |
|
$ |
78.18 |
|
|
$ |
20.96 |
|
Cash dividends paid per share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
10.00 |
|
|
$ |
10.00 |
|
Shares outstanding (000) (weighted average) |
|
|
23,212 |
|
|
|
23,752 |
|
|
|
23,247 |
|
|
|
23,795 |
|
(1) Restated for the transition to IFRS 17.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the three and six months ended June 30, 2023 and 2022(US$
millions)
|
|
Second quarter |
|
First six months |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
Restated(1) |
|
|
|
Restated(1) |
|
|
|
|
|
|
|
|
|
Net earnings |
|
829.1 |
|
|
49.3 |
|
|
2,233.1 |
|
|
748.1 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of income
taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified to net
earnings |
|
|
|
|
|
|
|
|
Net unrealized foreign currency translation gains (losses) on
foreign subsidiaries |
|
(48.9 |
) |
|
(393.3 |
) |
|
11.7 |
|
|
(411.4 |
) |
Gains (losses) on hedge of net investment in Canadian
subsidiaries |
|
(46.9 |
) |
|
70.7 |
|
|
(49.3 |
) |
|
45.8 |
|
Gains (losses) on hedge of net investment in European
operations |
|
(3.3 |
) |
|
49.8 |
|
|
(17.6 |
) |
|
68.0 |
|
Share of other comprehensive loss of associates, excluding net
gains (losses) on defined benefit plans |
|
(5.6 |
) |
|
(116.6 |
) |
|
(3.4 |
) |
|
(163.6 |
) |
Other |
|
8.1 |
|
|
1.0 |
|
|
4.8 |
|
|
1.0 |
|
|
|
(96.6 |
) |
|
(388.4 |
) |
|
(53.8 |
) |
|
(460.2 |
) |
Net unrealized foreign currency translation losses on foreign
subsidiaries reclassified to net earnings |
|
1.9 |
|
|
— |
|
|
1.9 |
|
|
— |
|
Net unrealized foreign currency translation gains on associates
reclassified to net earnings |
|
— |
|
|
— |
|
|
(4.8 |
) |
|
— |
|
|
|
(94.7 |
) |
|
(388.4 |
) |
|
(56.7 |
) |
|
(460.2 |
) |
Items that will not be reclassified to net
earnings |
|
|
|
|
|
|
|
|
Net gains (losses) on defined benefit plans |
|
1.4 |
|
|
67.6 |
|
|
(8.9 |
) |
|
117.7 |
|
Share of net gains (losses) on defined benefit plans of
associates |
|
(2.2 |
) |
|
8.4 |
|
|
(1.9 |
) |
|
14.2 |
|
Other |
|
2.8 |
|
|
— |
|
|
2.8 |
|
|
— |
|
|
|
2.0 |
|
|
76.0 |
|
|
(8.0 |
) |
|
131.9 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of income
taxes |
|
(92.7 |
) |
|
(312.4 |
) |
|
(64.7 |
) |
|
(328.3 |
) |
Comprehensive income (loss) |
|
736.4 |
|
|
(263.1 |
) |
|
2,168.4 |
|
|
419.8 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
Shareholders of Fairfax |
|
675.4 |
|
|
(237.2 |
) |
|
1,940.3 |
|
|
363.5 |
|
Non-controlling interests |
|
61.0 |
|
|
(25.9 |
) |
|
228.1 |
|
|
56.3 |
|
|
|
736.4 |
|
|
(263.1 |
) |
|
2,168.4 |
|
|
419.8 |
|
(1) Restated for the transition to IFRS 17.
SEGMENTED INFORMATION (US$ millions)
Third party gross premiums written, net premiums
written and combined ratios, on an undiscounted basis, for the
property and casualty insurance and reinsurance operations
(excluding Life insurance and Run-off) in the second quarters and
first six months ended June 30, 2023 and 2022 were as
follows:
Gross Premiums Written
|
|
Second quarter |
|
First six months |
|
% change year-over-year |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Second quarter |
|
First six months |
Northbridge |
|
699.0 |
|
659.1 |
|
1,205.3 |
|
1,133.8 |
|
6.1 |
% |
|
6.3 |
% |
Crum & Forster |
|
1,323.2 |
|
1,118.8 |
|
2,478.8 |
|
2,155.4 |
|
18.3 |
% |
|
15.0 |
% |
Zenith National |
|
174.8 |
|
164.7 |
|
432.1 |
|
423.7 |
|
6.1 |
% |
|
2.0 |
% |
North American Insurers |
|
2,197.0 |
|
1,942.6 |
|
4,116.2 |
|
3,712.9 |
|
13.1 |
% |
|
10.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
1,872.2 |
|
1,789.3 |
|
3,755.8 |
|
3,541.1 |
|
4.6 |
% |
|
6.1 |
% |
Odyssey Group |
|
1,887.3 |
|
1,759.1 |
|
3,396.1 |
|
3,176.2 |
|
7.3 |
% |
|
6.9 |
% |
Brit(1) |
|
1,113.8 |
|
1,091.9 |
|
2,008.9 |
|
1,977.3 |
|
2.0 |
% |
|
1.6 |
% |
Global Insurers and Reinsurers |
|
4,873.3 |
|
4,640.3 |
|
9,160.8 |
|
8,694.6 |
|
5.0 |
% |
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Insurers and Reinsurers |
|
918.1 |
|
677.0 |
|
1,804.4 |
|
1,468.2 |
|
35.6 |
% |
|
22.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and casualty insurance and
reinsurance |
|
7,988.4 |
|
7,259.9 |
|
15,081.4 |
|
13,875.7 |
|
10.0 |
% |
|
8.7 |
% |
Net Premiums Written
|
|
Second quarter |
|
First six months |
|
% change year-over-year |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Second quarter |
|
First six months |
Northbridge |
|
625.5 |
|
596.6 |
|
1,068.6 |
|
1,027.7 |
|
4.8 |
% |
|
4.0 |
% |
Crum & Forster |
|
985.0 |
|
917.6 |
|
1,840.3 |
|
1,750.9 |
|
7.3 |
% |
|
5.1 |
% |
Zenith National |
|
179.0 |
|
168.1 |
|
438.8 |
|
425.6 |
|
6.5 |
% |
|
3.1 |
% |
North American Insurers |
|
1,789.5 |
|
1,682.3 |
|
3,347.7 |
|
3,204.2 |
|
6.4 |
% |
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
1,312.9 |
|
1,195.4 |
|
2,773.7 |
|
2,529.7 |
|
9.8 |
% |
|
9.6 |
% |
Odyssey Group |
|
1,602.3 |
|
1,543.9 |
|
3,011.9 |
|
2,863.9 |
|
3.8 |
% |
|
5.2 |
% |
Brit(1) |
|
871.4 |
|
782.2 |
|
1,515.4 |
|
1,412.4 |
|
11.4 |
% |
|
7.3 |
% |
Global Insurers and Reinsurers |
|
3,786.6 |
|
3,521.5 |
|
7,301.0 |
|
6,806.0 |
|
7.5 |
% |
|
7.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
International Insurers and Reinsurers |
|
558.3 |
|
454.8 |
|
1,105.1 |
|
945.7 |
|
22.8 |
% |
|
16.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and casualty insurance and
reinsurance |
|
6,134.4 |
|
5,658.6 |
|
11,753.8 |
|
10,955.9 |
|
8.4 |
% |
|
7.3 |
% |
Combined Ratios
|
|
Second quarter |
|
First six months |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Northbridge |
|
93.2 |
% |
|
87.2 |
% |
|
92.2 |
% |
|
87.3 |
% |
Crum & Forster |
|
95.0 |
% |
|
94.4 |
% |
|
94.9 |
% |
|
94.6 |
% |
Zenith National |
|
96.6 |
% |
|
94.4 |
% |
|
97.9 |
% |
|
94.9 |
% |
North American Insurers |
|
94.7 |
% |
|
92.1 |
% |
|
94.4 |
% |
|
92.3 |
% |
|
|
|
|
|
|
|
|
|
Allied World |
|
91.0 |
% |
|
92.2 |
% |
|
91.4 |
% |
|
92.2 |
% |
Odyssey Group |
|
94.3 |
% |
|
94.9 |
% |
|
95.3 |
% |
|
94.4 |
% |
Brit(1) |
|
94.8 |
% |
|
94.7 |
% |
|
92.8 |
% |
|
93.3 |
% |
Global Insurers and Reinsurers |
|
93.3 |
% |
|
94.0 |
% |
|
93.4 |
% |
|
93.4 |
% |
|
|
|
|
|
|
|
|
|
International Insurers and Reinsurers |
|
95.3 |
% |
|
101.3 |
% |
|
95.8 |
% |
|
99.4 |
% |
|
|
|
|
|
|
|
|
|
Property and casualty insurance and
reinsurance |
|
93.9 |
% |
|
94.1 |
% |
|
93.9 |
% |
|
93.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excluding Ki Insurance, gross premiums
written decreased by 4.8% and 4.8% in the second quarter and first
six months of 2023 and net premiums written increased by 8.0% and
3.3% in the second quarter and first six months of 2023. Excluding
Ki Insurance, the combined ratios were 96.3% and 93.3% in the
second quarter and first six months of 2023 and 94.6% and 93.4% in
the second quarter and first six months of 2022.
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
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; 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, 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; 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;
risks associated with the global pandemic caused by COVID-19 and
the conflict in Ukraine; and risks associated with recent events in
the banking sector. 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.sedar.com. 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.
Fairfax Financial (TSX:FFH.U)
過去 株価チャート
から 4 2024 まで 5 2024
Fairfax Financial (TSX:FFH.U)
過去 株価チャート
から 5 2023 まで 5 2024