Fairfax posts solid rise in GPW in Q3’24

In their financial results for the third quarter of 2024, Fairfax Financial Holdings has reported net earnings attributable to shareholders of $1,030.8 million, which compares to the $1,068.9 million seen in the third quarter of 2023.

According to Fairfax, this figure primarily reflects increased adjusted operating income of $1,136.8 million and net gains on investments.

Moreover, book value per basic share at September 30, 2024 was $1,033.18 compared to $939.65 at December 31, 2023 (an increase of 11.7% adjusted for the $15 per common share dividend paid in the first quarter of 2024).

At the same time, net earnings in Q3’24 sat at $1,119.5 million, compared to $1,187.0 million from the same period last year.

All in all, gross premiums written (GPW) for the third quarter of 2024 sat at $8,302.2 million, a solid increase from $7,272.2 million in Q3’23.

Fairfax’s insurance and reinsurance companies posted an undiscounted combined ratio of 93.9%, improving from 95.0% in 2023, as well as an underwriting profit of $389.7 million, an improved figure compared to $291.6 million, which was reported in the prior year.

Net premiums written by the property and casualty insurance and reinsurance operations increased by 10.0% to $6,420.4 million from $5,837.9 million, while GPW increased by 13.9%.

Fairfax noted that this increase primarily reflects the consolidation of Gulf Insurance on December 26, 2023 which contributed $420.5 million to net premiums written and $778.4 million to gross premiums written in 2024, and continued growth across most operating companies, partially offset by a decrease at Odyssey Group.

In addition, Fairfax also recorded a total net expense of $731.8 million from discounting insurance and reinsurance contracts, which was comprised of net finance expense from insurance contracts and reinsurance contract assets held of $1,112.6 million.

Meanwhile, Fairfax subsidiary Odyssey Group, the reinsurance and specialty insurance provider, posted $1,546.2 million in gross premiums written (GPW), a 4.7% decrease in comparison to $1,621.9 million from Q3’23.

Brit, specialty insurer and reinsurer focused on underwriting complex risks and also part of Fairfax, also recorded GPW of $888.8 million in this year’s third quarter, a figure 3.8% down from last year’s $923.5 million.

Allied World, also a provider of re/insurance solutions and a Fairfax subsidiary, posted a 3.0% rise in GPW in the third quarter, climbing from $1,623.2 million to $1,671.8 million.

Prem Watsa, Chairman and Chief Executive Officer, commented: “In the third quarter of 2024 our property and casualty insurance and reinsurance operations produced adjusted operating income of $1,136.8 million up from $967.2 million in the third quarter of 2023 (or operating income of $1,516.3 million (2023 – $1,424.4 million) including the benefit of discounting, net of a risk adjustment on claims), primarily reflecting continued strong core underwriting performance and increased interest and dividends.

“Our underwriting performance in the third quarter of 2024 was outstanding, with our property and casualty insurance and reinsurance companies reporting a consolidated combined ratio of 93.9% and consolidated underwriting profit of $389.7 million, on an undiscounted basis, despite higher current period catastrophe losses of $434.5 million. Gross and net premiums written grew by 13.9% and 10.0%, reflecting the acquisition of Gulf Insurance, which added $778.4 million in gross premiums written and $420.5 million in net premiums written. Excluding Gulf Insurance, gross and net premiums written grew by 3.2% and 2.8%.”

Adding: “Net gains on investments of $1,287.3 million in the quarter was principally comprised of mark to market gains on bonds of $828.6 million and mark to market gains on common stocks of $322.9 million.

“We remain focused on being soundly financed and ended the quarter with approximately $2.0 billion of cash and marketable securities and an additional $2.1 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company.”

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