Fairfax reports Q2’25 net income increase with improved 93.3% CoR

Fairfax Financial Holdings Limited has announced its financial result for the second half of 2025, reporting net earnings of $1,436.7 million, increasing from the $1,055.8 million net earnings reported in the same period last year.

According to the firm, the increase in Q2 2025’s earnings primarily reflects increased net gains on investments.

This quarter, the company’s gross premiums written (GPW) rose by 2.6% to $9,176.3 million, up from $8,918.2 million in Q2 2024.

Fairfax attributes this increase primarily to growth across most operating companies, including new business in reinsurance and casualty lines, modest rate increases in key segments, and reinstatement premiums from the California wildfires.

The company reported $902.4 million in GPW from Brit, $1,748.0 million from Odyssey, $22.9 million from Ki, and $2,067.7 million from Allied World.

Net premiums written by the property and casualty insurance and reinsurance operations increased by 4.8% to $7,170.1 million from $6,841.6 million, primarily reflecting growth in gross premiums written and increased retention.

Brit saw $734.6 million in net premium written in Q2 2025, Odyssey $1,605.7 million, Ki $207.5 million, and Allied World $1,422.8 million.

Fairfax’s property and casualty insurance and reinsurance operations saw an increase in underwriting profit, reaching $426.9 million from $370.4 million in 2024.

This improvement was accompanied by a better undiscounted combined ratio, which moved from 93.9% in 2024 to 93.3%. In Q2 2025, Fairfax’s Brit saw a 92.2% combined ratio, Odyssey 91.9%, Ki 93.4%, and Allied World 91.1%.

Key factors contributing to these positive results include growth in business volumes, a modest increase in net favourable prior year reserve development to $163.2 million (up from $131.8 million in 2024), and a decrease in current period catastrophe losses to $140.1 million (down from $164.2 million in 2024).

Adjusted operating income (which excludes the impact of discounting, net of a risk adjustment on claims) of the property and casualty insurance and reinsurance operations increased to $1,130.0 million from $1,119.4 million, principally reflecting increased underwriting profit and increased interest and dividends, partially offset by decreased share of profit of associates.

Prem Watsa, Chairman and Chief Executive Officer, commented: “In the second quarter of 2025 our property and casualty insurance and reinsurance operations produced adjusted operating income of $1,130.0 million (or operating income of $1,453.8 million including the benefit of discounting, net of a risk adjustment on claims), reflecting continued strong underwriting performance and robust interest and dividend income. Our property and casualty insurance and reinsurance companies reported a consolidated combined ratio of 93.3% and consolidated underwriting profit of $426.9 million, on an undiscounted basis. Gross premiums written grew by 2.6% primarily reflecting new business across reinsurance and casualty lines, while our net premiums written grew by 4.8%, primarily reflecting increased retentions.

“Net gains on investments of $952.0 million in the quarter was principally comprised of net gains on common stocks of $800.4 million. As we have said in the past, we expect our common stock positions to perform well over the long term, but our net gains will fluctuate from quarter to quarter.”