Fairfax reports $239.5 million Q1 loss, cites natural catastrophe losses

Fairfax has seen a drop in its Q1 earnings, going from a profit of $419.3 million in 2010 Q1 to a net loss of $239.5 million in 2011 Q1.
The company cites catastrophe losses of $418.4 million – $311.3 million arising from the Japan earthquake – and investment losses of $101.5 million as major contributors to the decrease in earnings.
The combined ratio of the company’s insurance and reinsurance operations was 128.7% on a consolidated basis, producing an underwriting loss of $352 million. This marks a deterioration from 2010 Q1’s combined ratio of 111.3% and underwriting loss of $120.6 million.
“During the first quarter, the company suffered losses from the Japan earthquake as well as from the New Zealand earthquake and Australian floods,” said Prem Watsa, Fairfax’s chairman and CEO. “Despite these events, the company continues to be soundly financed and we continue to hold $1 billion in cash and marketable securities at the holding company level.”
Northbridge, the company’s Canadian commercial insurer, reported a slight improvement in its combined ratio, from 104.6% in 2010 Q1 to 103.6% in 2011 Q1.
Northbridge’s net premiums written also improved from $197.8 million in 2010 Q1 to $258.4 million in 2011 Q1.
OdysseyRe, Fairfax’s reinsurance unit, saw its combined ratio deteriorate quarter-over-quarter, from 112.8% in 2010 Q1 to 150.3% in 2011 Q1. The reinsurer increased its net premiums written from $473.2 million in 2010 Q1 to $509.9 million in 2011 Q1.