August 1, 2003 by Canadian Underwriter
Fairfax Financial Holdings Ltd.’s (TSX: FFH) net earnings rose more than five-fold to $246.2 million for the second quarter of this year compared with the $47 million reported for the same period last year. This equates to earnings of $17.15 a share for the latest quarter against the $2.95 a share shown for the same period the previous year.
The financial services holding company’s net earnings for the first six months of this year clocked in at $400.8 million versus the $58.3 million reported for the first half of 2002.
Much of the benefit to the bottom-line, for the latest quarter result as well as the first half year of 2003, came from “substantial realized gains” on the investment portfolio, a company statement says. Realized gains for the second quarter of this year amounted to $578 million. Fairfax’s subsidiaries, operating both in Canada and the U.S., were mostly able to improve underwriting results, which saw the company’s consolidated combined ratio drop to 98.2% for the latest quarter compared with the 100.2% shown at the end of the second quarter of 2002. The combined ratio on its Canadian business declined to 94.7% from 97.9%, while the U.S. operations produced a ratio of 102.2% against the 103.6% recorded at the end of the comparable period for 2002. Fairfax’s reinsurance business wrote at a combined ratio of 98.2% for the second quarter of this year compared with the 100.2% ratio for the second quarter of 2002.