July 27, 2012 by Canadian Underwriter
Fairfax Financial Holdings Limited announced net earnings of $95 million in 2012 Q2, compared to net earnings of $83.3 million during the same period last year, reflecting improved underwriting results and lower losses on repurchase of long term debt.
The combined ratio of Fairfax’s insurance and reinsurance operations in 2012 Q2 was 97.5% on a consolidated basis, producing an underwriting profit of $34.8 million. This is compared to a combined ratio and underwriting loss of 100.5% and $6.1 million, respectively, in 2011.
Underwriting results in 2011 were negatively affected by catastrophe losses related to U.S. tornadoes.
Net premiums written by the insurance and reinsurance operations increased 14%, to $1.6 billion in 2012 Q2 from $1.4 billion in 2011.
“Our underwriting results continued to improve on increased premiums and we produced a small investment gain notwithstanding unrealized investment losses related to our defensive hedging strategy,” said Fairfax chairman and CEO Prem Watsa. “We again finished the quarter with cash and marketable securities at the holding company in excess of $1 billion. We continue to maintain our equity hedges as we remain very concerned about the economic outlook over the next few years.”
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