Fairfax profits dip in Q3, but GWP soars
Fairfax Financial Holdings saw a fall in its net earnings for the third quarter of the year to $424.8 million, compared with profits of $461.2 million in the third quarter of 2014.
The firm said that the result reflects lower net gains on investments, partially offset by increased underwriting profit.
Fairfax’s gross written premiums (GWP) for the quarter were up however to $2.3 billion, compared with $1.8 billion for the third quarter of last year.
The combined ratio of the insurance and reinsurance operations was also more favourable in the third quarter of this year, at 90.9 percent on a consolidated basis, producing an underwriting profit of $177.4 million, compared with a combined ratio and underwriting profit of 91.2 percent and $136.2 million respectively in 2014.
"Our insurance companies continued to have excellent underwriting performance in the third quarter and the first nine months of 2015 with consolidated combined ratios of 90.9 percent and 91.3 percent respectively, and we had net investment gains, mostly unrealised, in the third quarter of $425.6 million, principally deriving from bonds, due to lower interest rates, and our consumer price index-linked derivative contracts,” said Prem Watsa, chairman and chief executive officer of Fairfax.
"We are maintaining our defensive equity hedges and deflation protection as we remain concerned about the financial markets and the economic outlook in this global deflationary environment. We continue to be soundly financed, with quarter-end cash and marketable securities in the holding company in excess of $1.1 billion."
