Fairfax announces 91.3% Q1 combined ratio of its insurance and reinsurance operations

Toronto-based Fairfax Financial Holdings Limited announced last week that the combined ratio of its insurance and reinsurance operations was 91.3% on a consolidated basis, producing an underwriting profit of US$126.8 million in Q1 2015, compared to a combined ratio and underwriting profit of 93.0% and US$98.7 million, respectively, in the same quarter in 2014.

Fairfax Financial, whose subsidiaries include Northbridge Financial and OdysseyRe, announced net earnings of US$225.2 million in the first quarter of 2015 (the three months ending March 31), compared to net earnings of US$784.6 million in the first quarter of 2014, reflecting improved underwriting results and lower net gains on investments. 

“All of our major insurance companies had a combined ratio less than 100%, with OdysseyRe at 89.2% and Zenith at 77.7%,” reported Prem Watsa, chairman and CEO of Fairfax, in a press release. “We also had net investment gains in the quarter of US$177 million, including realized gains of US$424 million.”

Net premiums written by the insurance and reinsurance operations increased by 6.7% to US$1,683.1 million (after adjusting for timing differences in recognizing crop insurance premiums written by OdysseyRe). The insurance and reinsurance operations produced operating income (excluding net gains or losses on investments) of US$236.1 million, compared to US$190.8 million in 2014, primarily as a result of improved underwriting income.

Net premiums written for Insurance in Canada (Northbridge) were US$181.3 million in Q1 2015, compared to US$192.7 million for the same period in 2014. Under Reinsurance (OdysseyRe), net premiums written for Q1 2015 were US$563.4 million compared to US$572.5 million for Q1 2014.

Combined ratios of the Insurance and Reinsurance operations (excluding Runoff) in the first quarters ending March 31, 2015 and 2014, were: Insurance – Canada (Northbridge): 97% in 2015 compared to 99.8% in 2013; and Reinsurance (OdysseyRe): 89.2% in Q1 2015 compared to 85.6% in Q1 2014.

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