Fairfax Q1 investment income declines US$917 million

Fairfax Financial Holdings Ltd. (TSX and NYSE: FFH) reported a net loss of US$60.4 million in 2009 Q1, compared to a profit of US$631.8 million in 2008 Q1.
The company attributes the year-over-year decline in earnings to the “significant net investment gains of US$1.07 billion in 2008 Q1 compared to net losses on investments in 2009 Q1 of US$153 million,” a Fairfax release says.
The combined ratio of the company’s insurance and reinsurance operations in 2009 Q1 was 98.7% on a consolidated basis, a slight decrease from 2008 Q1’s 99.7%. Northbridge and OdysseyRe reported combined ratios of 101.8% and 96.5%, respectively, in 2009 Q1, compared to CORs of 96.4% and 98.5% in 2008 Q1, respectively.
Fairfax’s net premiums written increased 4.9% in 2009 Q1, from US$1.06 billion in 2008 Q1 to US$1.12 billion in 2009 Q1.
The group’s losses on claims increased to US$800 million in 2009 Q1 from US$789.6 million reported in 2008 Q1.
“We are pleased that, in a difficult environment, we have maintained our disciplined underwriting standards, and our insurance and reinsurance operations have produced a consolidated combined ratio of 98.7% in the first quarter,” said Prem Watsa, chairman and CEO of Fairfax.
“As to our investments, our increased focus on high quality common stocks reflects our view that these should provide excellent returns over the long term, though the volatility of the markets may result in lumpy quarters and even years.”