Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) announces
net earnings of $915.4 million ($37.18 net earnings per diluted
share after payment of preferred share dividends) in the second
quarter of 2024, primarily reflecting increased adjusted operating
income of $1,119.4 million and net gains on investments. Book value
per basic share at June 30, 2024 was $979.63 compared to
$939.65 at December 31, 2023 (an increase of 6.0% adjusted for
the $15 per common share dividend paid in the first quarter of
2024).
"In the second quarter of 2024 our property and
casualty insurance and reinsurance operations produced adjusted
operating income of $1,119.4 million up from $913.5 million in the
second quarter of 2023 (or operating income of $1,553.1 million
(2023 - $1,526.4 million) including the benefit of discounting, net
of a risk adjustment on claims), primarily reflecting increased
interest and dividends and share of profit of associates. Our
underwriting performance in the second quarter of 2024 continued to
produce favourable results with our insurance and reinsurance
companies reporting a consolidated combined ratio of 93.9% and
consolidated underwriting profit of $370.4 million, on an
undiscounted basis. Gross and net premiums written grew by 10.8%
and 11.5%, reflecting the acquisition of Gulf Insurance, which
added $815.9 million in gross premiums written and $523.8 million
in net premiums written. Excluding Gulf Insurance, gross premiums
written grew by 0.6% and net premiums written grew by 3.0%.
"Net gains on investments of $241.6 million in
the quarter was principally comprised of mark to market gains on
common stocks of $377.4 million, partially offset by mark to market
losses on bonds of $190.8 million.
"We remain focused on being soundly financed and
ended the quarter with approximately $2.5 billion of cash and
marketable securities (prior to Allied World's subsequent
redemption of its $500.0 million of senior notes) and an additional
$2.0 billion, at fair value, of investments in associates and
consolidated non-insurance companies owned by the holding company,"
said Prem Watsa, Chairman and Chief Executive Officer.
The table below presents the sources of the
company's net earnings in a segment reporting format which the
company has consistently used as it believes it assists in
understanding Fairfax:
| |
Second quarter |
|
First six months |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
($ millions) |
| Gross premiums written |
8,918.2 |
|
|
8,042.5 |
|
|
16,974.5 |
|
|
15,181.0 |
|
| Net premiums written |
6,898.4 |
|
|
6,199.9 |
|
|
13,199.4 |
|
|
11,863.0 |
|
| Net insurance revenue |
5,946.4 |
|
|
5,392.1 |
|
|
12,033.5 |
|
|
10,552.0 |
|
| |
|
|
|
|
|
|
|
| Sources of net
earnings |
|
|
|
|
|
|
|
| Operating income - Property
and Casualty Insurance and Reinsurance: |
|
|
|
|
|
|
|
|
Insurance service result: |
|
|
|
|
|
|
|
|
North American Insurers |
296.0 |
|
|
249.2 |
|
|
583.7 |
|
|
525.0 |
|
|
Global Insurers and Reinsurers |
671.1 |
|
|
820.4 |
|
|
1,313.1 |
|
|
1,445.7 |
|
|
International Insurers and Reinsurers |
86.2 |
|
|
74.7 |
|
|
194.0 |
|
|
151.3 |
|
|
Insurance service result |
1,053.3 |
|
|
1,144.3 |
|
|
2,090.8 |
|
|
2,122.0 |
|
|
Other insurance operating expenses |
(249.2 |
) |
|
(193.9 |
) |
|
(475.3 |
) |
|
(391.5 |
) |
|
Interest and dividends |
547.1 |
|
|
407.4 |
|
|
1,047.6 |
|
|
718.9 |
|
|
Share of profit of associates |
201.9 |
|
|
168.6 |
|
|
305.5 |
|
|
386.3 |
|
| Operating income - Property
and Casualty Insurance and Reinsurance |
1,553.1 |
|
|
1,526.4 |
|
|
2,968.6 |
|
|
2,835.7 |
|
| Operating income (loss) - Life
insurance and Run-off |
(7.4 |
) |
|
6.3 |
|
|
15.5 |
|
|
9.7 |
|
| Operating income -
Non-insurance companies |
25.2 |
|
|
36.9 |
|
|
42.5 |
|
|
36.3 |
|
|
Net finance expense from insurance contracts and reinsurance
contract assets held |
(204.7 |
) |
|
(424.0 |
) |
|
(370.7 |
) |
|
(587.4 |
) |
| Net gains (losses) on
investments |
241.6 |
|
|
(342.1 |
) |
|
183.1 |
|
|
429.1 |
|
| Gain on sale of insurance
subsidiary |
— |
|
|
259.1 |
|
|
— |
|
|
259.1 |
|
| Interest expense |
(160.4 |
) |
|
(130.4 |
) |
|
(311.9 |
) |
|
(254.7 |
) |
| Corporate overhead and
other |
(36.2 |
) |
|
12.4 |
|
|
(59.8 |
) |
|
(14.1 |
) |
| Earnings before income
taxes |
1,411.2 |
|
|
944.6 |
|
|
2,467.3 |
|
|
2,713.7 |
|
| Provision for income
taxes |
(355.4 |
) |
|
(115.5 |
) |
|
(641.8 |
) |
|
(480.6 |
) |
| Net
earnings |
1,055.8 |
|
|
829.1 |
|
|
1,825.5 |
|
|
2,233.1 |
|
| |
|
|
|
|
|
|
|
| Attributable to: |
|
|
|
|
|
|
|
|
Shareholders of Fairfax |
915.4 |
|
|
734.4 |
|
|
1,691.9 |
|
|
1,984.4 |
|
|
Non-controlling interests |
140.4 |
|
|
94.7 |
|
|
133.6 |
|
|
248.7 |
|
| |
1,055.8 |
|
|
829.1 |
|
|
1,825.5 |
|
|
2,233.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
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, which are presented in
insurance service expenses and recoveries of insurance service
expenses.
| |
Second quarter |
|
First six months |
|
Property and Casualty Insurance and
Reinsurance |
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
($ millions) |
| Insurance service
result |
1,053.3 |
|
|
1,144.3 |
|
|
2,090.8 |
|
|
2,122.0 |
|
|
Other insurance operating expenses |
(249.2 |
) |
|
(193.9 |
) |
|
(475.3 |
) |
|
(391.5 |
) |
|
Discounting of losses and ceded losses on claims recorded in the
period |
(510.3 |
) |
|
(606.1 |
) |
|
(876.6 |
) |
|
(1,028.5 |
) |
|
Changes in the risk adjustment and other |
76.6 |
|
|
(6.8 |
) |
|
4.5 |
|
|
(50.7 |
) |
| Underwriting
profit |
370.4 |
|
|
337.5 |
|
|
743.4 |
|
|
651.3 |
|
| Interest and dividends |
547.1 |
|
|
407.4 |
|
|
1,047.6 |
|
|
718.9 |
|
| Share of profit of
associates |
201.9 |
|
|
168.6 |
|
|
305.5 |
|
|
386.3 |
|
| Adjusted operating
income |
1,119.4 |
|
|
913.5 |
|
|
2,096.5 |
|
|
1,756.5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Highlights for the second quarter of 2024 (with
comparisons to the second quarter of 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 11.5% to $6,841.6 million from
$6,134.4 million, while gross premiums written increased by
10.8%, primarily reflecting the consolidation of Gulf Insurance on
December 26, 2023 that contributed $523.8 million to net premiums
written and $815.9 million to gross premiums written in 2024, and
continued growth across most operating companies, partially offset
by decreases at Odyssey Group (principally reflecting the
non-renewal of a significant quota share contract which contributed
nominal underwriting profit and decreased U.S. crop
insurance).
- The company's
property and casualty insurance and reinsurance operations produced
underwriting profit of $370.4 million compared to
$337.5 million in 2023, and an undiscounted combined ratio of
93.9% in 2024, consistent with the 93.9% in 2023, primarily
reflecting increased net favourable prior year reserve development
of $131.8 million that was offset by an increased underwriting
expense ratio due to investments in personnel and technology to
support continued growth in business volumes.
- 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 22.5% to $1,119.4 million
from $913.5 million, principally reflecting increased interest and
dividends and share of profit of associates and continued strong
underwriting profit.
- The company
recorded a total net benefit of $229.5 million from applying IFRS
17, which was comprised of a net benefit of $434.2 million from
discounting losses and ceded losses on claims recorded in the
period, net of changes in risk adjustment and other, partially
offset by net finance expense from insurance contracts and
reinsurance contract assets held of $204.7 million (which included
interest accretion from unwinding the effects of discounting
associated with net losses on claim payments made of $366.1
million, partially offset by the benefit of modest increases in
discount rates during the period on prior year net losses on claims
of $161.4 million). The benefit of the effect of increases in
discount rates on prior year net losses on claims of $161.4 million
largely offset net losses recorded on the company’s bond portfolio
of $190.8 million.
- Consolidated
interest and dividends increased significantly from $464.6 million
to $614.0 million (comprised of interest and dividends of $547.1
million (2023 - $407.4 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 June 30,
2024 the company's insurance and reinsurance companies held
portfolio investments of $61.5 billion (excluding Fairfax India's
portfolio of $2.0 billion), of which $7.7 billion was in cash and
short term investments representing 12.6% of those portfolio
investments. During the first six months of 2024 the company used
net proceeds from sales and maturities of U.S. treasuries to
purchase $729.6 million of other government bonds and $207.9
million of short-dated first mortgage loans.
- Consolidated
share of profit of associates of $221.4 million principally
reflected share of profit of $126.1 million from Eurobank, $66.5
million from Poseidon and $31.5 million from Peak Achievement
(principally reflecting its sale of Rawlings Sporting Goods),
partially offset by share of loss of $39.0 million from Sanmar
Chemicals Group.
- On May 23, 2024
Digit Insurance, the general insurance subsidiary of the company's
investment in associate Go Digit Infoworks ("Digit"), completed an
initial public offering comprised of an issuance of new equity and
an offer for sale of existing equity shares held by Digit and other
shareholders, which valued Digit Insurance at approximately $3.0
billion (249.5 billion Indian rupees or 272 Indian rupees per
common share). As a result of the initial public offering and the
increase in the fair value of the company's investment in Digit
compulsory convertible preferred shares at June 30, 2024, the
company recorded a total pre-tax gain of $149.9 million related to
its investment in Digit, recorded as a gain of $106.3 million in
net changes in capitalization in the consolidated statement of
changes in equity and a net gain on investments in the consolidated
statement of earnings of $43.6 million on the company's holdings of
Digit compulsory convertible preferred shares. Digit Insurance's
common shares are now traded on the BSE and NSE in India and closed
at 338 Indian rupees per common share on June 30, 2024.
- Net gains on investments of $241.6
million consisted of the following:
| |
|
|
|
|
|
| |
Second quarter of 2024 |
| |
($ millions) |
| |
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
| Net gains (losses) on: |
|
|
|
|
|
|
Equity exposures |
193.7 |
|
|
183.7 |
|
|
377.4 |
|
|
Bonds |
(24.0 |
) |
|
(166.8 |
) |
|
(190.8 |
) |
|
Other |
(44.8 |
) |
|
99.8 |
|
|
55.0 |
|
| |
124.9 |
|
|
116.7 |
|
|
241.6 |
|
| |
First six months of 2024 |
| |
($ millions) |
| |
Realized gains (losses) |
|
Unrealized gains (losses) |
|
Net gains (losses) |
| Net gains (losses) on: |
|
|
|
|
|
|
Equity exposures |
708.4 |
|
|
(55.9 |
) |
|
652.5 |
|
|
Bonds |
(5.1 |
) |
|
(504.5 |
) |
|
(509.6 |
) |
|
Other |
17.0 |
|
|
23.2 |
|
|
40.2 |
|
| |
720.3 |
|
|
(537.2 |
) |
|
183.1 |
|
| |
|
|
|
|
|
|
|
|
Net gains on equity exposures of $377.4 million
principally reflected net gains on common stocks of $184.5 million
and a net gain of $131.5 million on the company's continued
holdings of 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 $372.96 (Cdn$476.03) per
share.
Net losses on bonds of $190.8 million
principally reflected net losses of $76.7 million on U.S.
treasuries.
- The company's
fixed income portfolio is conservatively positioned with
effectively 70% of the fixed income portfolio invested in
government bonds and 20% in high quality corporate bonds, primarily
short-dated.
- At June 30,
2024 the excess of fair value over carrying value of investments in
non-insurance associates and consolidated non-insurance
subsidiaries was $1,514.5 million.
- On June 24, 2024
the company completed an offering of $600.0 million principal
amount of 6.10% unsecured senior notes due 2055 (the "2055 notes")
and an additional $150.0 million principal amount of its 6.00%
unsecured senior notes due 2033. Subsequent to June 30, 2024, on
July 19, 2024 Allied World became the primary co-obligor of the
2055 notes in exchange for cash received from the company of
$596.6. On July 24, 2024 Allied World used the majority of those
proceeds to redeem all of its outstanding $500.0 million principal
amount of 4.35% senior notes due 2025.
- The company's
total debt to total capital ratio, excluding non-insurance
companies, increased to 25.9% at June 30, 2024 from 23.1% at
December 31, 2023, principally reflecting the issuance of
$1.0 billion principal amount of senior notes due 2054. Had
the Allied World senior notes described above been redeemed at June
30, 2024, the company's total debt to total capital ratio,
excluding non-insurance companies, would have been 24.9%.
- During the first
six months of 2024 the company purchased 854,031 of its subordinate
voting shares for cancellation at an aggregate cost of $938.1
million.
- Subsequent to
June 30, 2024:
- On July 15, 2024 Cleveland-Cliffs
Inc. ("Cliffs") entered into a definitive agreement with Stelco to
acquire all outstanding common shares of Stelco for consideration
of Cdn$70.00 per share (consisting of Cdn$60.00 cash and Cdn$10.00
in Cliffs common stock). Closing of the transaction is subject to
shareholder and regulatory approvals, and satisfaction of other
customary closing conditions, and is expected to be in the fourth
quarter of 2024. The company's current estimated pre-tax gain on
sale of its holdings of approximately 13 million common shares of
Stelco is approximately Cdn$531 million (US$390 million),
calculated as the excess of consideration of approximately
Cdn$910 million (US$668 million or US$51 per common
share) over the carrying value of the investment in associate at
June 30, 2024 of approximately Cdn$379 million
(US$277.9 million).
- On July 17, 2024
the company extended the expiry of its $2.0 billion unsecured
revolving credit facility on substantially the same terms with a
syndicate of lenders from July 14, 2028 to July 17, 2029.
- On July 21, 2024
the company entered into an arrangement to acquire all of the
issued and outstanding common shares of Sleep Country Canada
Holdings Inc. ("Sleep Country") for purchase consideration of
approximately $862 million (Cdn$1.2 billion) or Cdn$35.00
per common share. The transaction is subject to Sleep Country
shareholder approval and regulatory approval and is expected to
close in the fourth quarter of 2024.
- On July 31, 2024
Eurobank paid a dividend of approximately $370 million (€342
million). The company’s share of that dividend was approximately
$128 million (€118 million), which will be recorded in the
company's consolidated financial reporting in the third quarter of
2024 as a reduction of Eurobank's carrying value under the equity
method of accounting.
At June 30, 2024 there were 22,181,619
common shares effectively outstanding.
Consolidated balance sheet, earnings and
comprehensive income information, together with segmented premium
and combined ratio information, follow and form part of this news
release.
As previously announced, Fairfax will hold a
conference call to discuss its second quarter 2024 results at 8:30
a.m. Eastern time on Friday August 2, 2024. The call,
consisting of a presentation by the company followed by a question
period, may be accessed at 1 (888) 390-0867 (Canada or U.S.) or 1
(212) 547-0141 (International) with the passcode “FAIRFAX”. A
replay of the call will be available from shortly after the
termination of the call until 5:00 p.m. Eastern time on
Friday, August 16, 2024. The replay may be accessed at 1 (800)
551-8152 (Canada or U.S.) or 1 (203) 369-3810 (International).
Fairfax Financial Holdings Limited is a holding
company which, through its subsidiaries, is primarily engaged in
property and casualty insurance and reinsurance and the associated
investment management.
For further information,
contact: John
VarnellVice President, Corporate Development(416) 367-4941
CONSOLIDATED BALANCE SHEETS as at June 30,
2024 and December 31, 2023(US$ millions except per share
amounts)
| |
|
June 30, 2024 |
|
December 31, 2023 |
| Assets |
|
|
|
|
|
|
|
Holding company cash and investments (including assets pledged for
derivative obligations – $212.5; December 31, 2023 – $197.7) |
|
|
2,541.6 |
|
|
|
1,781.6 |
|
| Insurance contract
receivables |
|
|
813.3 |
|
|
|
926.1 |
|
| |
|
|
|
|
|
|
| Portfolio investments |
|
|
|
|
|
|
| Subsidiary cash and short term
investments (including restricted cash and cash equivalents –
$525.5; December 31, 2023 – $637.0) |
|
|
7,722.7 |
|
|
|
7,165.6 |
|
| Bonds (cost $36,760.9; December
31, 2023 – $36,511.9) |
|
|
36,477.0 |
|
|
|
36,850.8 |
|
| Preferred stocks (cost $898.9;
December 31, 2023 – $898.3) |
|
|
2,515.3 |
|
|
|
2,447.4 |
|
| Common stocks (cost $6,543.8;
December 31, 2023 – $6,577.2) |
|
|
6,820.4 |
|
|
|
6,903.4 |
|
| Investments in associates (fair
value $8,278.7; December 31, 2023 – $7,553.2) |
|
|
7,229.8 |
|
|
|
6,607.6 |
|
| Derivatives and other invested
assets (cost $888.9; December 31, 2023 – $952.0) |
|
|
921.4 |
|
|
|
1,025.3 |
|
| Assets pledged for derivative
obligations (cost $112.8; December 31, 2023 – $137.7) |
|
|
112.4 |
|
|
|
139.3 |
|
| Fairfax India cash, portfolio
investments and associates (fair value $3,274.7; December 31, 2023
– $3,507.6) |
|
|
2,041.2 |
|
|
|
2,282.7 |
|
| |
|
|
63,840.2 |
|
|
|
63,422.1 |
|
| |
|
|
|
|
|
|
| Reinsurance contract assets
held |
|
|
10,868.9 |
|
|
|
10,887.7 |
|
| Deferred income tax assets |
|
|
274.5 |
|
|
|
301.1 |
|
| Goodwill and intangible
assets |
|
|
6,277.5 |
|
|
|
6,376.3 |
|
| Other assets |
|
|
8,867.0 |
|
|
|
8,290.2 |
|
| Total assets |
|
|
93,483.0 |
|
|
|
91,985.1 |
|
| |
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Accounts payable and accrued
liabilities |
|
|
5,534.8 |
|
|
|
5,487.2 |
|
| Derivative obligations |
|
|
323.1 |
|
|
|
444.9 |
|
| Deferred income tax
liabilities |
|
|
1,360.5 |
|
|
|
1,250.3 |
|
| Insurance contract payables |
|
|
1,101.3 |
|
|
|
1,206.9 |
|
| Insurance contract
liabilities |
|
|
46,329.5 |
|
|
|
46,171.4 |
|
| Borrowings – holding company and
insurance and reinsurance companies |
|
|
9,139.5 |
|
|
|
7,824.5 |
|
| Borrowings – non-insurance
companies |
|
|
1,981.5 |
|
|
|
1,899.0 |
|
| Total liabilities |
|
|
65,770.2 |
|
|
|
64,284.2 |
|
| |
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
| Common shareholders’ equity |
|
|
21,729.8 |
|
|
|
21,615.0 |
|
| Preferred stock |
|
|
1,335.5 |
|
|
|
1,335.5 |
|
| Shareholders’ equity attributable
to shareholders of Fairfax |
|
|
23,065.3 |
|
|
|
22,950.5 |
|
| Non-controlling interests |
|
|
4,647.5 |
|
|
|
4,750.4 |
|
| Total equity |
|
|
27,712.8 |
|
|
|
27,700.9 |
|
| |
|
|
93,483.0 |
|
|
|
91,985.1 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Book value per basic
share |
|
$ |
979.63 |
|
|
$ |
939.65 |
|
| |
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF EARNINGS for the
three and six months ended June 30, 2024 and 2023(US$ millions
except per share amounts)
| |
|
Second quarter |
|
First six months |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Insurance |
|
|
|
|
|
|
|
|
|
Insurance revenue |
|
|
7,493.5 |
|
|
|
6,654.2 |
|
|
|
15,180.3 |
|
|
|
12,934.1 |
|
|
Insurance service expenses |
|
|
(6,146.5 |
) |
|
|
(5,039.5 |
) |
|
|
(12,399.1 |
) |
|
|
(10,216.9 |
) |
|
Net insurance result |
|
|
1,347.0 |
|
|
|
1,614.7 |
|
|
|
2,781.2 |
|
|
|
2,717.2 |
|
|
Cost of reinsurance |
|
|
(1,547.1 |
) |
|
|
(1,262.1 |
) |
|
|
(3,146.8 |
) |
|
|
(2,382.1 |
) |
|
Recoveries of insurance service expenses |
|
|
1,223.7 |
|
|
|
758.9 |
|
|
|
2,426.4 |
|
|
|
1,763.2 |
|
|
Net reinsurance result |
|
|
(323.4 |
) |
|
|
(503.2 |
) |
|
|
(720.4 |
) |
|
|
(618.9 |
) |
|
Insurance service result |
|
|
1,023.6 |
|
|
|
1,111.5 |
|
|
|
2,060.8 |
|
|
|
2,098.3 |
|
|
Other insurance operating expenses |
|
|
(282.1 |
) |
|
|
(205.4 |
) |
|
|
(527.9 |
) |
|
|
(451.5 |
) |
|
Net finance expense from insurance contracts |
|
|
(296.5 |
) |
|
|
(585.3 |
) |
|
|
(566.7 |
) |
|
|
(811.1 |
) |
|
Net finance income from reinsurance contract assets held |
|
|
91.8 |
|
|
|
161.3 |
|
|
|
196.0 |
|
|
|
223.7 |
|
| |
|
|
536.8 |
|
|
|
482.1 |
|
|
|
1,162.2 |
|
|
|
1,059.4 |
|
| Investment
income |
|
|
|
|
|
|
|
|
|
Interest and dividends |
|
|
614.0 |
|
|
|
464.6 |
|
|
|
1,203.8 |
|
|
|
846.9 |
|
|
Share of profit of associates |
|
|
221.4 |
|
|
|
269.2 |
|
|
|
349.1 |
|
|
|
603.0 |
|
|
Net gains (losses) on investments |
|
|
241.6 |
|
|
|
(342.1 |
) |
|
|
183.1 |
|
|
|
429.1 |
|
| |
|
|
1,077.0 |
|
|
|
391.7 |
|
|
|
1,736.0 |
|
|
|
1,879.0 |
|
| Other revenue and
expenses |
|
|
|
|
|
|
|
|
|
Non-insurance revenue |
|
|
1,538.1 |
|
|
|
1,559.6 |
|
|
|
3,052.3 |
|
|
|
3,118.0 |
|
|
Non-insurance expenses |
|
|
(1,484.6 |
) |
|
|
(1,527.5 |
) |
|
|
(2,984.9 |
) |
|
|
(3,150.6 |
) |
|
Gain on sale of insurance subsidiary |
|
|
— |
|
|
|
259.1 |
|
|
|
— |
|
|
|
259.1 |
|
|
Interest expense |
|
|
(160.4 |
) |
|
|
(130.4 |
) |
|
|
(311.9 |
) |
|
|
(254.7 |
) |
|
Corporate and other expenses |
|
|
(95.7 |
) |
|
|
(90.0 |
) |
|
|
(186.4 |
) |
|
|
(196.5 |
) |
| |
|
|
(202.6 |
) |
|
|
70.8 |
|
|
|
(430.9 |
) |
|
|
(224.7 |
) |
| Earnings before income
taxes |
|
|
1,411.2 |
|
|
|
944.6 |
|
|
|
2,467.3 |
|
|
|
2,713.7 |
|
| Provision for income taxes |
|
|
(355.4 |
) |
|
|
(115.5 |
) |
|
|
(641.8 |
) |
|
|
(480.6 |
) |
| Net
earnings |
|
|
1,055.8 |
|
|
|
829.1 |
|
|
|
1,825.5 |
|
|
|
2,233.1 |
|
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
| Shareholders of Fairfax |
|
|
915.4 |
|
|
|
734.4 |
|
|
|
1,691.9 |
|
|
|
1,984.4 |
|
| Non-controlling interests |
|
|
140.4 |
|
|
|
94.7 |
|
|
|
133.6 |
|
|
|
248.7 |
|
| |
|
|
1,055.8 |
|
|
|
829.1 |
|
|
|
1,825.5 |
|
|
|
2,233.1 |
|
| |
|
|
|
|
|
|
|
|
| Net earnings per
share |
|
$ |
40.18 |
|
|
$ |
31.10 |
|
|
$ |
73.36 |
|
|
$ |
84.30 |
|
| Net earnings per diluted
share |
|
$ |
37.18 |
|
|
$ |
28.80 |
|
|
$ |
67.94 |
|
|
$ |
78.18 |
|
| Cash dividends paid per
share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15.00 |
|
|
$ |
10.00 |
|
| Shares outstanding
(000) (weighted average) |
|
|
22,479 |
|
|
|
23,212 |
|
|
|
22,727 |
|
|
|
23,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOMEfor the three and six months ended June 30,
2024 and 2023(US$ millions)
| |
|
Second quarter |
|
First six months |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
| Net
earnings |
|
1,055.8 |
|
|
829.1 |
|
|
1,825.5 |
|
|
2,233.1 |
|
| |
|
|
|
|
|
|
|
|
| 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 |
|
(89.9 |
) |
|
(48.9 |
) |
|
(318.3 |
) |
|
11.7 |
|
|
Gains (losses) on hedge of net investment in Canadian
subsidiaries |
|
19.0 |
|
|
(46.9 |
) |
|
73.5 |
|
|
(49.3 |
) |
|
Gains (losses) on hedge of net investment in European
operations |
|
5.4 |
|
|
(3.3 |
) |
|
24.5 |
|
|
(17.6 |
) |
|
Share of other comprehensive loss of associates, excluding net
losses on defined benefit
plans |
|
(21.1 |
) |
|
(5.6 |
) |
|
(43.8 |
) |
|
(3.4 |
) |
|
Other |
|
(1.4 |
) |
|
8.1 |
|
|
(0.4 |
) |
|
4.8 |
|
|
|
|
(88.0 |
) |
|
(96.6 |
) |
|
(264.5 |
) |
|
(53.8 |
) |
|
Net unrealized foreign currency translation losses on foreign
subsidiaries reclassified to net
earnings |
|
— |
|
|
1.9 |
|
|
— |
|
|
1.9 |
|
|
Net unrealized foreign currency translation (gains) losses on
associates reclassified to net
earnings |
|
0.1 |
|
|
— |
|
|
0.3 |
|
|
(4.8 |
) |
| |
|
(87.9 |
) |
|
(94.7 |
) |
|
(264.2 |
) |
|
(56.7 |
) |
|
Items that will not be subsequently reclassified to net
earnings |
|
|
|
|
|
|
|
|
|
Net gains (losses) on defined benefit
plans |
|
23.0 |
|
|
1.4 |
|
|
37.2 |
|
|
(8.9 |
) |
|
Share of net losses on defined benefit plans of
associates |
|
— |
|
|
(2.2 |
) |
|
(1.3 |
) |
|
(1.9 |
) |
|
Other |
|
(0.1 |
) |
|
2.8 |
|
|
12.7 |
|
|
2.8 |
|
| |
|
22.9 |
|
|
2.0 |
|
|
48.6 |
|
|
(8.0 |
) |
| |
|
|
|
|
|
|
|
|
| Other comprehensive
income (loss), net of income
taxes |
|
(65.0 |
) |
|
(92.7 |
) |
|
(215.6 |
) |
|
(64.7 |
) |
| Comprehensive
income |
|
990.8 |
|
|
736.4 |
|
|
1,609.9 |
|
|
2,168.4 |
|
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
| Shareholders of
Fairfax |
|
855.4 |
|
|
675.4 |
|
|
1,505.7 |
|
|
1,940.3 |
|
| Non-controlling
interests |
|
135.4 |
|
|
61.0 |
|
|
104.2 |
|
|
228.1 |
|
| |
|
990.8 |
|
|
736.4 |
|
|
1,609.9 |
|
|
2,168.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
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 (excluding Life insurance and Run-off) in the second
quarters and first six months ended June 30, 2024 and 2023
were as follows:
| Gross
Premiums Written |
|
Second quarter |
|
First six months |
|
% change year-over-year |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Second quarter |
|
First six months |
|
Northbridge |
|
723.4 |
|
699.0 |
|
1,253.3 |
|
1,205.3 |
|
3.5 |
% |
|
4.0 |
% |
|
Crum &
Forster |
|
1,426.5 |
|
1,323.2 |
|
2,716.8 |
|
2,478.8 |
|
7.8 |
% |
|
9.6 |
% |
|
Zenith
National |
|
169.0 |
|
174.8 |
|
419.7 |
|
432.1 |
|
(3.3)% |
|
(2.9)% |
| North
American
Insurers |
|
2,318.9 |
|
2,197.0 |
|
4,389.8 |
|
4,116.2 |
|
5.5 |
% |
|
6.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
2,021.1 |
|
1,872.2 |
|
4,025.6 |
|
3,755.8 |
|
8.0 |
% |
|
7.2 |
% |
|
Odyssey Group |
|
1,707.5 |
|
1,887.3 |
|
3,137.2 |
|
3,396.1 |
|
(9.5)% |
|
(7.6)% |
|
Brit(1) |
|
1,041.8 |
|
1,113.8 |
|
1,955.0 |
|
2,008.9 |
|
(6.5) % |
|
(2.7)% |
| Global
Insurers and
Reinsurers |
|
4,770.4 |
|
4,873.3 |
|
9,117.8 |
|
9,160.8 |
|
(2.1)% |
|
(0.5)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Insurers and
Reinsurers(2) |
|
1,761.7 |
|
918.1 |
|
3,342.0 |
|
1,804.4 |
|
91.9 |
% |
|
85.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property
and casualty insurance and
reinsurance(2) |
|
8,851.0 |
|
7,988.4 |
|
16,849.6 |
|
15,081.4 |
|
10.8 |
% |
|
11.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Premiums
Written |
|
Second quarter |
|
First six months |
|
% change year-over-year |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Second quarter |
|
First six months |
|
Northbridge |
|
665.8 |
|
625.5 |
|
1,132.6 |
|
1,068.6 |
|
6.4 |
% |
|
6.0 |
% |
|
Crum &
Forster |
|
1,079.6 |
|
985.0 |
|
2,035.5 |
|
1,840.3 |
|
9.6 |
% |
|
10.6 |
% |
|
Zenith
National |
|
171.5 |
|
179.0 |
|
423.1 |
|
438.8 |
|
(4.2)% |
|
(3.6)% |
| North American
Insurers |
|
1,916.9 |
|
1,789.5 |
|
3,591.2 |
|
3,347.7 |
|
7.1 |
% |
|
7.3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
1,423.5 |
|
1,312.9 |
|
2,991.9 |
|
2,773.7 |
|
8.4 |
% |
|
7.9 |
% |
|
Odyssey Group |
|
1,550.4 |
|
1,602.3 |
|
2,922.0 |
|
3,011.9 |
|
(3.2)% |
|
(3.0)% |
|
Brit(1) |
|
852.0 |
|
871.4 |
|
1,566.2 |
|
1,515.4 |
|
(2.2)% |
|
3.4 |
% |
| Global Insurers and
Reinsurers |
|
3,825.9 |
|
3,786.6 |
|
7,480.1 |
|
7,301.0 |
|
1.0 |
% |
|
2.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| International Insurers
and
Reinsurers(2) |
|
1,098.8 |
|
558.3 |
|
2,019.6 |
|
1,105.1 |
|
96.8 |
% |
|
82.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property and casualty
insurance and
reinsurance(2) |
|
6,841.6 |
|
6,134.4 |
|
13,090.9 |
|
11,753.8 |
|
11.5 |
% |
|
11.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Combined
Ratios |
|
Undiscounted |
|
Discounted |
| |
|
Second quarter |
|
First six months |
|
Second quarter |
|
First six months |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Northbridge |
|
88.5 |
% |
|
93.2 |
% |
|
89.7 |
% |
|
92.2 |
% |
|
78.6 |
% |
|
81.0 |
% |
|
79.7 |
% |
|
80.9 |
% |
|
Crum &
Forster |
|
95.8 |
% |
|
95.0 |
% |
|
95.9 |
% |
|
94.9 |
% |
|
86.3 |
% |
|
86.9 |
% |
|
85.4 |
% |
|
84.9 |
% |
|
Zenith
National |
|
98.9 |
% |
|
96.6 |
% |
|
99.0 |
% |
|
97.9 |
% |
|
87.9 |
% |
|
87.8 |
% |
|
88.2 |
% |
|
88.0 |
% |
| North American
Insurers |
|
93.9 |
% |
|
94.7 |
% |
|
94.3 |
% |
|
94.4 |
% |
|
84.1 |
% |
|
85.2 |
% |
|
84.0 |
% |
|
84.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allied World |
|
93.2 |
% |
|
91.0 |
% |
|
92.4 |
% |
|
91.4 |
% |
|
79.7 |
% |
|
66.0 |
% |
|
79.3 |
% |
|
72.8 |
% |
|
Odyssey Group |
|
93.1 |
% |
|
94.3 |
% |
|
92.9 |
% |
|
95.3 |
% |
|
83.0 |
% |
|
81.2 |
% |
|
82.0 |
% |
|
82.3 |
% |
|
Brit(1) |
|
92.7 |
% |
|
94.8 |
% |
|
91.1 |
% |
|
92.8 |
% |
|
67.4 |
% |
|
73.2 |
% |
|
70.0 |
% |
|
71.8 |
% |
| Global Insurers and
Reinsurers |
|
93.0 |
% |
|
93.3 |
% |
|
92.3 |
% |
|
93.4 |
% |
|
78.7 |
% |
|
73.8 |
% |
|
78.6 |
% |
|
76.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| International Insurers
and
Reinsurers |
|
96.6 |
% |
|
95.3 |
% |
|
97.6 |
% |
|
95.8 |
% |
|
90.2 |
% |
|
86.0 |
% |
|
91.0 |
% |
|
85.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and casualty
insurance and
reinsurance |
|
93.9 |
% |
|
93.9 |
% |
|
93.7 |
% |
|
93.9 |
% |
|
82.2 |
% |
|
78.6 |
% |
|
82.5 |
% |
|
79.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Excluding Ki Insurance, gross premiums written decreased by 1.4%
and 0.2% in the second quarter and first six months of 2024 and net
premiums written decreased by 3.0% and increased by 1.1% in the
second quarter and first six months of 2024. Excluding Ki
Insurance, the undiscounted combined ratios were 92.6% and 91.3% in
the second quarter and first six months of 2024 and 96.3% and 93.3%
in the second quarter and first six months of 2023 (discounted
combined ratios of 63.7% and 67.2% in the second quarter and first
six months of 2024 and 76.0% and 71.8% in the second quarter and
first six months of 2023). |
| (2) |
Excluding Gulf Insurance's gross
premiums written of $815.9 million and $1,465.4 million in the
second quarter and first six months of 2024 and net premiums
written of $523.8 million and $857.8 million in the second quarter
and first six months of 2024, gross premiums written in the
International Insurers and Reinsurers reporting segment increased
by 3.0% and 4.0% in the second quarter and first six months of 2024
and net premiums written increased by 3.0% and 5.1% in the second
quarter and first six months of 2024, while gross premiums written
for the property and casualty insurance and reinsurance operations
increased by 0.6% and 2.0% in the second quarter and first six
months of 2024 and net premiums written increased by 3.0% and 4.1%
in the second quarter and first six months of 2024. |
| |
|
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; risks associated
with the conflicts in Ukraine and Israel and the development of
other geopolitical events and economic disruptions worldwide; and
risks associated with recent events in the banking sector which
have elevated concerns among market participants about the
liquidity, default, and non-performance risk associated with banks,
other financial institutions and the financial services industry
generally. 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
MEASURES
Management 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 performance calculated as insurance service
result with the effects of discounting for net claims incurred in
the current period, changes in the risk adjustment and other, and
other insurance operating expenses all removed 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).
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.
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.
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.
| |
June 30, 2024 |
|
December 31, 2023 |
| |
As presented in the consolidated balance
sheet |
|
Adjust for consolidatednon-insurance
companies |
|
Excluding consolidatednon-insurance
companies |
|
As presented in the consolidated balance sheet |
|
Adjust for consolidatednon-insurance companies |
|
Excluding consolidatednon-insurance companies |
|
Total debt |
11,121.0 |
|
|
1,981.5 |
|
9,139.5 |
|
|
9,723.5 |
|
|
1,899.0 |
|
7,824.5 |
|
| Total
equity |
27,712.8 |
|
|
1,596.1 |
|
26,116.7 |
|
|
27,700.9 |
|
|
1,634.6 |
|
26,066.3 |
|
| Total
capital |
38,833.8 |
|
|
|
|
35,256.2 |
|
|
37,424.4 |
|
|
|
|
33,890.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total debt to total capital
ratio |
28.6 |
% |
|
|
|
25.9 |
% |
|
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 June 30, 2024 were $7,545.0 and
$6,730.6 (December 31, 2023 - $6,825.9 and $6,221.7), which
are the IFRS fair values and carrying values included in the
company's consolidated balance sheets as at June 30, 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 consolidated balance sheets as at
June 30, 2024 and December 31, 2023.