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Fairfax Financial Holdings Limited: Financial Results for the Year Ended December 31, 2016

TORONTO, ONTARIO -- (Marketwired) -- 02/16/17 --

(Note: All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are prepared using the recognition and measurement requirements of International Financial Reporting Standards except as otherwise noted, and are unaudited.)

Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) announces a fiscal year 2016 net loss of $512.5 million ($24.18 net loss per diluted share after payment of preferred share dividends) compared to fiscal year 2015 net earnings of $567.7 million ($23.15 net earnings per diluted share after payment of preferred share dividends), reflecting net losses on investments, particularly in the fourth quarter, more then offsetting strong operating income. Book value per basic share at December 31, 2016 was $367.40 compared to $403.01 at December 31, 2015 (a decrease of 6.4% adjusted for the $10 per common share dividend paid in the first quarter of 2016).

"Our insurance companies continued to have excellent underwriting performance in the fourth quarter and full year of 2016 with consolidated combined ratios of 90.1% and 92.5% respectively. In 2016, all of our insurance companies again had combined ratios less than 100%, with Zenith National at 79.7%, Fairfax Asia at 86.4% and OdysseyRe at 88.7%. Our operating income was strong at $1,039 million. Net losses on investments of $1,204 million were primarily as a result of fundamental changes in the U.S. in the fourth quarter that may bolster economic growth and business development in the future. Consequently, we removed all our defensive equity index hedges and reduced the duration of our bond portfolios to approximately one year. Our investment actions resulted in our having cash and short term investments in excess of $10 billion at year-end," said Prem Watsa, Chairman and Chief Executive Officer of Fairfax. "In the fourth quarter we announced our agreement to purchase Allied World for $4.9 billion, a transformative acquisition for Fairfax. We continue to be soundly financed, with year-end cash and marketable securities in the holding company approaching $1.4 billion."

The table below shows the sources of the company's net earnings, set out in a format which the company has consistently used as it believes it assists in understanding Fairfax:

                                                             Year ended     
                                       Fourth quarter       December 31,    
                                         2016      2015      2016      2015 
Gross premiums written                2,244.1   2,202.4   9,534.3   8,655.8 
Net premiums written                  1,954.6   1,910.5   8,088.4   7,520.5 
Underwriting profit                     197.4     264.2     575.9     704.5 
Interest and dividends - insurance                                          
 and reinsurance                        101.2      96.1     463.3     477.0 
Operating income                        298.6     360.3   1,039.2   1,181.5 
Run-off (excluding net gains                                                
 (losses) on investments)              (121.0)    (67.6)   (149.4)    (74.1)
Non-insurance operations                 57.5      44.6     133.5     127.8 
Corporate overhead, interest expense                                        
 and other                             (126.3)    (63.1)   (374.0)   (351.5)
Net losses on investments            (1,073.7)   (200.1) (1,203.6)   (259.2)
Pre-tax income (loss)                  (964.9)     74.1    (554.3)    624.5 
Income taxes and non-controlling                                            
 interests                              263.4      29.3      41.8     (56.8)
Net earnings (loss) attributable to                                         
 shareholders of Fairfax               (701.5)    103.4    (512.5)    567.7 

Highlights for 2016 included the following:

--  The combined ratio of the insurance and reinsurance operations was 92.5%
    on a consolidated basis, producing an underwriting profit of $575.9
    million, compared to a combined ratio and underwriting profit of 89.9%
    and $704.5 million respectively in 2015, primarily reflecting greater
    catastrophe losses in 2016. 
--  Net premiums written by the insurance and reinsurance operations
    increased by 10.7% to $7,905.0 million, primarily reflecting that Brit
    was consolidated only in June 2015 (net premiums written increased by
    3.8% excluding Brit). 
--  The insurance and reinsurance operations produced operating income
    (excluding net losses on investments) of $1,039.2 million, compared to
    $1,181.5 million in 2015, reflecting decreased underwriting profit and
    lower share of profit of associates, partially offset by increased
    interest income. 
--  Interest and dividend income of $555.2 million increased from $512.2
    million in 2015. As at December 31, 2016, subsidiary cash and short term
    investments accounted for 37.4% of the company's portfolio investments.
    Interest income as reported is unadjusted for the positive tax effect of
    the company's significant holdings of tax-advantaged debt securities
    (holdings of $3,263.9 million at December 31, 2016 and $4,946.2 million
    at December 31, 2015). 
--  Net investment losses of $1,203.6 million in 2016 (net investment losses
    of $259.2 million in 2015) consisted of the following: 

                                                Fourth quarter of 2016      
                                                     ($ millions)           
                                            Realized  Unrealized            
                                               gains       gains  Net gains 
                                            (losses)    (losses)   (losses) 
Net gains (losses) on:                                                      
  Long equity exposures                       (180.7)      334.6      153.9 
  Equity hedges and short equity exposures  (2,681.4)    2,334.1     (347.3)
  Net equity exposures                      (2,862.1)    2,668.7     (193.4)
  Bonds                                        150.9      (932.4)    (781.5)
  CPI-linked derivatives                           -       (62.2)     (62.2)
  Other                                        195.9      (232.5)     (36.6)
                                            (2,515.3)    1,441.6   (1,073.7)
                                             Year ended December 31, 2016   
                                                     ($ millions)           
                                            Realized  Unrealized            
                                               gains       gains  Net gains 
                                            (losses)    (losses)   (losses) 
Net gains (losses) on:                                                      
  Long equity exposures                       (184.2)       79.5     (104.7)
  Equity hedges and short equity exposures  (2,634.8)    1,441.9   (1,192.9)
  Net equity exposures                      (2,819.0)    1,521.4   (1,297.6)
  Bonds                                        648.7      (326.0)     322.7 
  CPI-linked derivatives                           -      (196.2)    (196.2)
  Other                                         98.9      (131.4)     (32.5)
                                            (2,071.4)      867.8   (1,203.6)

--  Included in realized losses in 2016 was a loss of $2,663.9 million
    realized in the fourth quarter when the company, recognizing fundamental
    changes in the U.S. which obviated the need for defensive equity hedges,
    discontinued its economic equity hedging strategy, closing all of its
    short positions in the Russell 2000, S&P 500 and S&P/TSX 60 equity
    indexes effected through total return swaps. 
--  On October 10, 2016 the company completed the acquisition of an 80%
    interest in PT Asuransi Multi Artha Guna Tbk. ("AMAG") from PT Bank Pan
    Indonesia Tbk. ("Panin Bank") for $178.9 million. Fairfax Indonesia will
    be integrated with AMAG and AMAG will distribute its insurance products
    through a long-term bancassurance partnership with Panin Bank. AMAG is
    an established general insurer in Indonesia. 
--  On October 18, 2016 the company agreed to acquire from American
    International Group ("AIG") insurance operations in Argentina, Chile,
    Colombia, Uruguay, Venezuela and Turkey, and certain assets and renewal
    rights with respect to the portfolio of local business written by AIG
    Europe in Bulgaria, the Czech Republic, Hungary, Poland, Romania and
    Slovakia. Through an ongoing partnership, Fairfax will support and
    service AIG's multinational business in the countries where business
    operations are acquired. Total consideration will be approximately $240
    million. Each transaction is subject to customary closing conditions,
    including relevant regulatory approvals, and each transaction is
    expected to close during 2017. 
--  On December 7, 2016 the company completed the acquisition of a 100%
    interest in Bryte Insurance Company Limited (formerly known as Zurich
    Insurance Company South Africa Limited) ("Bryte Insurance") from Zurich
    Insurance Company Ltd. for $128.0 million (1.8 billion South African
    rand). Bryte Insurance is an established property and casualty insurer
    in South Africa and Botswana. 
--  On December 16, 2016 the company completed an underwritten public
    offering of Cdn$450 million principal amount of 4.70% senior notes due
    2026, realizing proceeds of $334.5 million (Cdn$446.2 million) net of
    commissions and expenses. On January 30, 2017 the company announced cash
    tender offers to purchase a targeted aggregate principal amount of up to
    Cdn$250 million of its outstanding senior notes due 2019, 2020 and 2021.
--  On December 18, 2016, the company entered into an agreement to acquire
    all of the issued and outstanding shares of Allied World Assurance
    Company Holdings, AG ("Allied World"), a market-leading global property,
    casualty and specialty insurer and reinsurer. Under the terms of the
    agreement, Allied World shareholders would receive a combination of
    Fairfax subordinate voting shares and cash equal to $54.00 per Allied
    World share, for a total equity value of approximately $4.9 billion. On
    January 27, 2017, the company entered into an agreement pursuant to
    which Ontario Municipal Employees Retirement System will invest $1
    billion in order to indirectly acquire approximately 21% of the issued
    and outstanding shares of Allied World simultaneously with the
    acquisition of Allied World by Fairfax. Closing of the transaction is
    subject to regulatory approvals and certain Allied World shareholder
    approvals, and is expected to occur in the second quarter of 2017. 
--  The company held $1,371.6 million of cash, short term investments and
    marketable securities at the holding company level ($1,329.4 million net
    of short sale and derivative obligations) at December 31, 2016, compared
    to $1,276.5 million ($1,275.9 million net of short sale and derivative
    obligations) at December 31, 2015. 
--  The company's total debt to total capital ratio increased from 21.8% at
    December 31, 2015 to 28.7% at December 31, 2016 as a result of debt
    issued during 2016 by the company, Fairfax India and Cara to finance
    various purchases and of the company's lower shareholders' equity at the
    end of 2016. 
--  At December 31, 2016 the company owned $110.4 billion notional amount of
    CPI-linked derivative contracts with an original cost of $670.0 million,
    a market value of $83.4 million, and a remaining weighted average life
    of 5.6 years. The majority of the contracts are based on the underlying
    United States CPI index (53.8%) or the European Union CPI index (39.5%).

                                                  ($ in millions)           
                                Floor         Life     Notional             
Underlying CPI Index          Rate(1)   (in years)       Amount         Cost
United States                     0.0%         5.7 $   46,725.0 $      286.9
United States                     0.5%         7.8     12,600.0         39.5
European Union                    0.0%         5.0     43,640.4        300.3
United Kingdom                    0.0%         5.9      4,077.6         22.6
France                            0.0%         6.1      3,322.5         20.7
                                               5.6 $  110,365.5 $      670.0

                                           ($ in millions)                  
                             Cost(2)       Market   Value(2)     Unrealized 
Underlying CPI Index        (in bps)        Value   (in bps)           Loss 
United States                   61.4 $       35.2        7.5 $       (251.7)
United States                   31.3         34.3       27.2           (5.2)
European Union                  68.8         12.5        2.9         (287.8)
United Kingdom                  55.4          0.5        1.2          (22.1)
France                          62.3          0.9        2.7          (19.8)
                                    -------------           ----------------
                                     $       83.4            $       (586.6)
                                    -------------           ----------------
                                    -------------           ----------------
(1)  Contracts with a floor rate of 0.0% provide a payout at maturity if    
     there is cumulative deflation over the life of the contract. Contracts 
     with a floor rate of 0.5% provide a payout at maturity if cumulative   
     inflation averages less than 0.5% per year over the life of the        
(2)  Expressed as a percentage of the notional amount.                      

--  At December 31, 2016 common shareholders' equity was $8,484.6 million,
    or $367.40 per basic share, compared to $8,952.5 million, or $403.01 per
    basic share, at December 31, 2015. 

Subsequent to year-end:

--  On January 13, 2017, the company purchased 12,340,500 subordinate voting
    shares of Fairfax India for $145.0 million in a private placement.
    Through that private placement and a contemporaneous bought deal public
    offering, Fairfax India raised proceeds of $493.5 million net of
    commissions and expenses. 
--  On February 8, 2017 the company agreed to acquire a 100% interest in
    Tower Limited ("Tower") for approximately $144 million (197 million New
    Zealand dollars). Closing of the transaction is subject to regulatory
    approvals and certain Tower shareholder approvals, and is expected to
    occur in the second quarter of 2017. Tower is a general insurer in New
    Zealand and the Pacific Islands. 
--  On or about February 17, 2017 the company will purchase 30,000,000
    multiple voting shares of newly incorporated Fairfax Africa in a private
    placement, and 2,500,000 subordinate voting shares of Fairfax Africa as
    part of that corporation's IPO, for total consideration of $325 million.
    Through private placements and the IPO, Fairfax Africa will raise gross
    proceeds of approximately $502 million (net proceeds of approximately
    $490 million after issuance costs and expenses). The company's multiple
    voting and subordinate voting shares will represent approximately 98.8%
    of the voting rights and 64.7% of the equity interest in Fairfax Africa
    at the close of the private placements and the IPO. Fairfax Africa was
    established, with the support of Fairfax, to invest in public and
    private equity and debt instruments of African businesses or other
    businesses with customers, suppliers or business primarily conducted in,
    or dependent on, Africa. 

There were 23.1 million and 22.2 million weighted average shares outstanding during the fourth quarters of 2016 and 2015 respectively. At December 31, 2016 there were 23,093,566 common shares effectively outstanding.

Unaudited consolidated balance sheet, earnings and comprehensive income information, along 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 2016 results at 8:30 a.m. Eastern time on Friday, February 17, 2017. The call, consisting of a presentation by the company followed by a question period, may be accessed at 1 (800) 857-9641 (Canada or U.S.) or 1 (517) 308-9408 (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, March 3, 2017. The replay may be accessed at 1 (888) 566-0452 (Canada or U.S.) or 1 (203) 369-3048 (International).

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

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. 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: a reduction in net earnings if our loss reserves are insufficient; underwriting losses on the risks we insure that are higher or lower than expected; the occurrence of catastrophic events with a frequency or severity exceeding our estimates; changes in market variables, including 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; the timing of claims payments being sooner or the receipt of reinsurance recoverables being later than anticipated by us; the inability of our subsidiaries to maintain financial or claims paying ability ratings; risks associated with implementing our business strategies; risks associated with our use of derivative instruments; the failure of our hedging methods 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; 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 supervision or regulation, including additional tax regulation, in the United States, Canada or other 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; 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; an impairment in the carrying value of our goodwill and indefinite-lived intangible assets; 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; and assessments and shared market mechanisms which may adversely affect our U.S. insurance subsidiaries. Additional risks and uncertainties are described in our most recently issued Annual Report which is available at www.fairfax.ca and in our Supplemental and 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.

CONSOLIDATED BALANCE SHEETS                                                 
as at December 31, 2016 and December 31, 2015                               
(unaudited - US$ millions)                                                  
                                                  December 31,  December 31,
                                                          2016          2015
Holding company cash and investments (including                             
 assets pledged for short sale and derivative                               
 obligations - $94.4; December 31, 2015 - $62.8)       1,371.6       1,276.5
Insurance contract receivables                         2,917.5       2,546.5
Portfolio investments                                                       
Subsidiary cash and short term investments             9,938.0       6,641.6
Bonds (cost $8,699.1; December 31, 2015 -                                   
 $11,258.9)                                            9,323.2      12,286.6
Preferred stocks (cost $111.2; December 31, 2015                            
 - $220.5)                                                69.6         116.6
Common stocks (cost $4,824.0; December 31, 2015 -                           
 $6,004.2)                                             4,158.8       5,358.3
Investments in associates (fair value $2,955.4;                             
 December 31, 2015 - $2,185.9)                         2,393.0       1,730.2
Derivatives and other invested assets (cost                                 
 $546.2; December 31, 2015 - $628.5)                     179.7         500.7
Assets pledged for short sale and derivative                                
 obligations (cost $223.9; December 31, 2015 -                              
 $322.9)                                                 228.5         351.1
Fairfax India cash and portfolio investments                                
 (cost $983.0; December 31, 2015 - $848.7)             1,002.6         847.4
                                                      27,293.4      27,832.5
Deferred premium acquisition costs                       693.1         532.7
Recoverable from reinsurers (including                                      
 recoverables on paid losses - $290.9; December                             
 31, 2015 - $286.3)                                    4,010.3       3,890.9
Deferred income taxes                                    732.6         463.9
Goodwill and intangible assets                         3,847.5       3,214.9
Other assets                                           2,518.4       1,771.1
Total assets                                          43,384.4      41,529.0
Accounts payable and accrued liabilities               2,888.6       2,555.9
Income taxes payable                                      35.4          85.8
Short sale and derivative obligations (including                            
 at the holding company - $42.2; December 31,                               
 2015 - $0.6)                                            234.3          92.9
Funds withheld payable to reinsurers                     416.2         322.8
Insurance contract liabilities                        23,222.2      23,101.2
Borrowings - holding company and insurance and                              
 reinsurance companies                                 3,908.0       3,067.5
Borrowings - non-insurance companies                     859.6         284.0
Total liabilities                                     31,564.3      29,510.1
Common shareholders' equity                            8,484.6       8,952.5
Preferred stock                                        1,335.5       1,334.9
Shareholders' equity attributable to shareholders                           
 of Fairfax                                            9,820.1      10,287.4
Non-controlling interests                              2,000.0       1,731.5
Total equity                                          11,820.1      12,018.9
                                                      43,384.4      41,529.0
CONSOLIDATED STATEMENTS OF EARNINGS                                         
for the three and twelve months ended December 31, 2016 and 2015            
(unaudited - US$ millions except per share amounts)                         
                                                           Year ended       
                                 Fourth quarter           December 31,      
                                   2016        2015        2016        2015 
  Gross premiums written        2,244.1     2,202.4     9,534.3     8,655.8 
  Net premiums written          1,954.6     1,910.5     8,088.4     7,520.5 
  Gross premiums earned         2,415.1     2,346.8     9,209.7     8,581.7 
  Premiums ceded to                                                         
   reinsurers                    (331.7)     (311.4)   (1,347.5)   (1,210.7)
  Net premiums earned           2,083.4     2,035.4     7,862.2     7,371.0 
  Interest and dividends          136.3       145.1       555.2       512.2 
  Share of profit (loss) of                                                 
   associates                     (32.6)       11.8        24.2       172.9 
  Net losses on investments    (1,073.7)     (200.1)   (1,203.6)     (259.2)
  Other revenue                   661.3       455.0     2,061.6     1,783.5 
                                1,774.7     2,447.2     9,299.6     9,580.4 
  Losses on claims, gross       1,495.8     1,448.9     5,682.9     5,098.4 
  Losses on claims ceded to                                                 
   reinsurers                    (230.9)     (301.6)     (964.3)     (712.0)
  Losses on claims, net         1,264.9     1,147.3     4,718.6     4,386.4 
  Operating expenses              439.9       408.2     1,597.7     1,470.1 
  Commissions, net                349.3       339.6     1,336.4     1,177.3 
  Interest expense                 67.3        55.6       242.8       219.0 
  Other expenses                  618.2       422.4     1,958.4     1,703.1 
                                2,739.6     2,373.1     9,853.9     8,955.9 
Earnings (loss) before                                                      
 income taxes                    (964.9)       74.1      (554.3)      624.5 
Recovery of income taxes         (260.7)      (59.0)     (159.6)      (17.5)
Net earnings (loss)              (704.2)      133.1      (394.7)      642.0 
Attributable to:                                                            
Shareholders of Fairfax          (701.5)      103.4      (512.5)      567.7 
Non-controlling interests          (2.7)       29.7       117.8        74.3 
                                 (704.2)      133.1      (394.7)      642.0 
Net earnings (loss) per                                                     
 share                       $   (30.77) $     4.19  $   (24.18) $    23.67 
Net earnings (loss) per                                                     
 diluted share               $   (30.77) $     4.10  $   (24.18) $    23.15 
Cash dividends paid per                                                     
 share                       $        -  $        -  $    10.00  $    10.00 
Shares outstanding (000)                                                    
 (weighted average)              23,148      22,235      23,017      22,070 
for the three and twelve months ended December 31, 2016 and 2015            
(unaudited - US$ millions)                                                  
                                                              Year ended    
                                          Fourth quarter     December 31,   
                                            2016     2015     2016     2015 
Net earnings (loss)                       (704.2)   133.1   (394.7)   642.0 
Other comprehensive income (loss), net                                      
 of income taxes                                                            
  Items that may be subsequently                                            
   reclassified to net earnings                                             
    Net unrealized foreign currency                                         
     translation losses on foreign                                          
     operations                           (140.0)  (112.3)   (80.2)  (557.9)
    Gains (losses) on hedge of net                                          
     investment in Canadian subsidiaries    25.0     39.6    (37.5)   218.8 
    Share of other comprehensive loss of                                    
     associates, excluding net gains                                        
     (losses) on defined benefit plans     (45.7)    (5.6)   (35.6)   (25.0)
                                          (160.7)   (78.3)  (153.3)  (364.1)
  Items that will not be subsequently                                       
   reclassified to net earnings                                             
    Share of net gains (losses) on                                          
     defined benefit plans of associates   (40.9)    23.7    (33.2)    28.8 
    Net losses on defined benefit plans    (18.3)    (2.2)   (18.3)    (6.1)
                                           (59.2)    21.5    (51.5)    22.7 
Other comprehensive income (loss), net                                      
 of income taxes                          (219.9)   (56.8)  (204.8)  (341.4)
Comprehensive income (loss)               (924.1)    76.3   (599.5)   300.6 
Attributable to:                                                            
Shareholders of Fairfax                   (886.4)    69.7   (696.4)   316.0 
Non-controlling interests                  (37.7)     6.6     96.9    (15.4)
                                          (924.1)    76.3   (599.5)   300.6 


(unaudited - US$ millions)

Net premiums written and net premiums earned by the insurance and reinsurance operations (excluding Runoff) in the fourth quarters and years ended December 31, 2016 and 2015 were:

Net Premiums Written

                                                              Year ended    
                                          Fourth quarter     December 31,   
                                             2016     2015     2016     2015
  Northbridge                               251.2    226.9    942.6    887.0
  OdysseyRe                                 486.6    468.9  2,100.2  2,095.0
  Crum & Forster                            437.0    449.1  1,801.1  1,659.4
  Zenith National                           148.0    143.1    819.4    785.4
  Brit(1)                                   317.8    383.5  1,480.2    946.4
  Fairfax Asia                               88.6     77.1    303.1    275.9
  Insurance and Reinsurance - Other         112.8     67.1    458.4    489.8
Insurance and reinsurance operations      1,842.0  1,815.7  7,905.0  7,138.9

Net Premiums Earned

                                                              Year ended    
                                          Fourth quarter     December 31,   
                                             2016     2015     2016     2015
  Northbridge                               233.2    212.8    908.8    874.7
  OdysseyRe                                 521.3    513.4  2,074.1  2,204.1
  Crum & Forster                            457.2    433.8  1,769.5  1,522.0
  Zenith National                           211.2    200.6    807.3    766.4
  Brit(1)                                   352.8    398.5  1,399.3    892.5
  Fairfax Asia                              104.0     85.7    302.5    287.0
  Insurance and Reinsurance - Other         111.0     95.8    437.2    442.7
Insurance and reinsurance operations      1,990.7  1,940.6  7,698.7  6,989.4

Combined ratios of the insurance and reinsurance operations (excluding Runoff) in the fourth quarters and years ended December 31, 2016 and 2015 were:

                                                              Year ended    
                                          Fourth quarter     December 31,   
                                            2016     2015     2016     2015 
  Northbridge                               91.8%    93.0%    94.9%    91.8%
  OdysseyRe                                 80.4%    71.6%    88.7%    84.7%
  Crum & Forster                            97.9%    96.6%    98.2%    97.7%
  Zenith National                           76.6%    81.4%    79.7%    82.5%
  Brit(1)                                   99.1%    94.6%    97.9%    94.9%
  Fairfax Asia                              95.9%    82.5%    86.4%    87.9%
  Insurance and Reinsurance - Other         91.3%    84.3%    93.7%    89.6%
Insurance and reinsurance operations        90.1%    86.4%    92.5%    89.9%

(1) Brit is included in the company's financial reporting with effect from June 5, 2015.

Fairfax Financial Holdings Limited
John Varnell
Vice President, Corporate Development
(416) 367-4941

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