4th May 2022

Fairfax Financial net earnings down but operating income up in first quarter
Trend

Fairfax Financial Holdings has announced net earnings of $125.5m($4.49 net earnings per diluted share after payment of preferred share dividends) in the first quarter of 2022 compared to net earnings of $806m($28.91 net earnings per diluted share after payment of preferred share dividends) in the first quarter of 2021.
"The company continued to grow significantly in the first quarter with gross premiums written up 21.9% and net premiums written up 27.8% with a combined ratio of 93.1, led by continued strong performance at Northbridge(87.3), Brit (91.8), Allied World (92.1), Odyssey Group (93.7) and Crum & Forster(94.8). Operating income increased to $562.4m from $298.2m, reflecting the strong growth in underwriting profit and increased share of profit of associates.
"During the quarter we had net gains on common stocks of $262.9m, but due to rising interest rates we had unrealized losses on bonds of $494.1m, for a net loss on investments of $214.4m.
Our low duration of 1.4 years on our $37bn fixed income portfolio(mainly cash and U.S. treasuries) reduced the impact that rising interest rates had on our bonds in the first quarter of 2022 to only a decrease of 1.3% of the fixed income portfolio, while enabling the company to benefit significantly from increased interest income in the remainder of 2022 as we deploy the portfolio into one to two year treasury bonds," said Prem Watsa, chairman and ceo.

Fairfax Financial Trends(58 articles)