Fairfax Financial Holdings Limited (Fairfax) has reported net earnings of $1.03 billion, or $42.62 per diluted share, for the third quarter of 2024 (Q3 2024), driven by increased operating income and investment gains.
The company also saw its book value per share rise to $1,033.18 as of Sept. 30, marking an 11.7% increase from year-end 2023, adjusted for dividends.
Prem Watsa, Fairfax’s chairman and CEO, highlighted the steady performance of the property and casualty (P&C) insurance and reinsurance businesses, noting “strong core underwriting performance and increased interest and dividends.”
The P&C segment reported a consolidated combined ratio of 93.9%, yielding an underwriting profit of $389.7 million despite $434.5 million in catastrophe-related losses.
Gross premiums written grew by 13.9%, supported by the addition of Gulf Insurance, which brought in $778.4 million in gross premiums. Excluding Gulf Insurance, Fairfax’s P&C operations saw gross premium growth of 3.2% year-over-year.
Investment performance was a significant contributor to the quarter’s earnings, with Fairfax posting $1.29 billion in net investment gains. This result primarily included mark-to-market gains on bonds totalling $828.6 million and gains on common stock holdings of $322.9 million.
In the P&C segment, Fairfax reported a 10% increase in net premiums written, reaching $6.42 billion for the quarter, up from $5.84 billion in Q3 2023.
The P&C unit also recorded an increase in consolidated underwriting profit to $389.7 million, compared to $291.6 million a year earlier, supported by premium growth across its key markets.
The company’s adjusted operating income rose 17.5% year-over-year to $1.14 billion, reflecting the increase in underwriting profit and higher investment income from interest and dividends.
The firm recorded a $731.8 million net expense related to discounting adjustments on insurance and reinsurance contracts. This figure included an expense of $1.11 billion associated with the discounting of insurance liabilities and a benefit of $380.8 million from discounting claims incurred within the period. Bond portfolio gains, which were tied to the discount rate decreases, contributed $828.6 million, offsetting some of these discounting costs.
Fairfax reported total interest and dividend income of $609.9 million, compared to $512.7 million in Q3 2023, as its P&C portfolios’ investments rose to $65.3 billion by Sept. 30. Of this, $8.0 billion was held in cash and short-term investments.
The company completed two significant acquisitions to expand its portfolio.
On Oct. 1, 2024, Fairfax finalized its purchase of Sleep Country Canada Holdings Inc for CAD 1.2 billion (US$880.6 million). The acquisition will be consolidated into Fairfax’s non-insurance reporting segment.
Additionally, Fairfax has announced plans to increase its stake in Peak Achievement Athletics, a move expected to close in the fourth quarter of 2024.
