February 18, 2016 by Canadian Underwriter
Toronto-based Northbridge Insurance had a combined ratio of 91.8% in 2015, down 3.7 points from 95.5% in 2014, while net premiums written for OdysseyRe dropped 12.7%, from US$2.4 billion in 2014 to US$2.095 billion in 2015, the carriers’ corporate parent reported Thursday.
Fairfax Financial Holdings Ltd. – whose holdings include Stamford, Conn.-based OdysseyRe and Northbridge, as well as the majority of the parent firm of the Harvey’s hamburger chain – released its financial results Thursday after stock markets closed.
Northbridge had net premiums written of $887 million in 2015, down 19.6% from $967.1 million in 2014. All figures are in United States currency. From January through December, 2015, the Canadian dollar dropped 15% relative to the U.S. dollar, from 85 cents to 72 cents.
During the three months ending Dec. 31, Northbridge reported net premiums written of $226.9 million, down 12.3% from $258.9 million during the last quarter of 2014. Northbridge is led by president and CEO Silvy Wright (pictured below right), a former chair of the Insurance Institute of Canada. Northbridge’s combined ratio increased 0.3 points, from 92.7% in Q4 2014 to 93% in the most recent quarter.
The combined ratio for OdysseyRe was 84.7% in both 2015 and 2014. Led by chief executive officer Brian D. Young, OdysseyRe operates Odyssey Reinsurance Company, commercial specialty insurer Hudson Insurance Company and Newline (Lloyd’s Syndicate 1218).
OdysseyRe reported net premiums written of $468.9 million in the most recent quarter, down 16.5% from $561.6 million during the same three months of 2014. Its combined ratio was 71.6% in the latest quarter, a 4.2-point improvement over 75.8% in Q4 2014.
Net premiums written for all of the insurance and reinsurance operations of Toronto-based Fairfax were $7.14 billion last year, up from $6.12 billion in 2014. The 2014 results do not include Brit PLC, a London-based Lloyd’s insurer in which Fairfax acquired a majority interest. Brit had net premiums written of $946.4 million last year. Fairfax announced last year it agreed to acquire 97% of ordinary shares of Brit. Then on June 29, Fairfax announced it sold 29.9% of Brit to the Ontario Municipal Employees Retirement System.
Fairfax reported net premiums written, in insurance and reinsurance operations, of $1.82 billion in the most recent quarter, up from $1.436 billion in Q4 2014. Brit reported net premiums written of $383.3 million in Q4 2015.
The combined ratio was 89.9% last year, down 0.9 points from 89.9% in 2014. In the latest quarter, Fairfax’s combined ratio in insurance and reinsurance operations was 86.4%, up a tenth of a point from 86.3% in 2014. Fairfax’s insurance group is led by president and chief operating officer Andrew Barnard.
Fairfax Financial has been led since 1985 by chairman and chief executive officer Prem Watsa, who controls The Sixty Two Investment Company Ltd. As of last year, Sixty Two owned 42% of votes attached to all classes of shares. Prem Watsa’s son, Benjamin Watsa – a partner and portfolio manager at Lissom Investment Management Inc. – was elected to the Fairfax board in 2015. Fairfax’s lead director is Anthony Griffiths, former chairman and chief executive officer of Ottawa telecommunications equipment manufacturer Mitel Corp. The other directors are: John Palmer, Superintendent of Financial Institutions for Canada from 1994 to 2001; Robert Gunn, former president and CEO of RSA Canada; Brandon Sweitzer, former president and CEO of Guy Carpenter and Company; Alan Horn, president and CEO of Rogers Telecommunications; and Timothy Price, Chairman of Brookfield Funds.
Fairfax’s annual general meeting is scheduled April 14.
Non-insurance companies owned by Fairfax include retailers William Ashley China, Kitchen Stuff and Sporting Life. In 2015, Fairfax acquired a 52.6% voting interest in Cara Operations Ltd., whose restaurant chains include Swiss Chalet, Harvey’s, Milestones, Montana’s, Kelsey’s and East Side Mario’s.
Company-wide, Fairfax Financial reported net earnings of $642 million on revenue of $9.58 billion in 2015, compared to net earnings of $1.66 billion on revenue of $10 billion in 2014. During the latest quarter, Fairfax Financial reported net earnings of $133 million on revenue of $2.447 billion, compared to net earnings of $38.2 million on revenue of $2.07 billion in Q4 2014.
Fairfax’s insurance companies in the U.S. include Crum and Forster, a commercial carrier based in Morristown, N.J., and Zenith National, a workers’ compensation insurer based in Woodland Hills, Calif. Net premiums written last year were $1.522 billion for Crum and Forster and $766 million for Zenith National. Crum and Forster (led by chairman and CEO Marc Adee) had a combined ratio of 97.7% in 2015 while Zenith National (led by CEO Kari Van Gundy) had a combined ratio of 82.5% in 2015.
On Feb. 3, 2015, Fairfax agreed to acquire the general insurance operations, in the Ukraine, of QBE Insurance (Europe) Ltd. That announcement was made two months after Fairfax agreed to acquire QBE’s insurance operations in the Czech Republic, Hungary and Slovakia.
On March 1, Fairfax’s Pacific Insurance subsidiary completed the acquisition of the general insurance business of Malaysia-based MCIS Insurance Berhad.