Canadian Underwriter

Share price volatility rocks Fairfax

January 21, 2003   by Canadian Underwriter

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Prem Watsa, the CEO of Fairfax Financial Holdings Ltd (TSX: FFH), has spoken out against recent volatility in the company’s share price which was sparked by the release of an investment research report that suggested that the group may be carrying heavy loss reserve deficiencies. “Fairfax has always been run with honesty and integrity and has always intended to provide comprehensive disclosure in its annual report. If Fairfax’s operations encountered difficulties, we faced them head-on, reported them candidly and absorbed their impact. We have consistently looked to protect the downside and concentrated on creating options to ensure that we could meet our obligations.”
In a media release, Fairfax notes that the valuation methodology used in the disputed research report suffers from “inherent limitations” and lack of knowledge of the factual details required to produce an accurate reserve calculation. “We are certain that the loss reserve deficiencies suggested by that report are totally wrong and have no validity whatsoever.”

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