Fairfax sees profits and premiums rise in Q2 2024

Fairfax Financial Holdings has reported net earnings of $915.4m in the second quarter of 2024, compared to $734.4m for the same period in 2023, primarily reflecting increased adjusted operating income of $1,119.4m and net gains on investments.

“Our underwriting performance in the second quarter of 2024 continued to produce favourable results with our insurance and reinsurance companies reporting a consolidated combined ratio of 93.9% and consolidated underwriting profit of $370.4m, on an undiscounted basis,” said Prem Watsa, chairman and chief executive officer.

Gross premiums written grew by 10.8% to $8,918.2m while net premiums written grew by 11.5% to $6,898.4m, reflecting the acquisition of Gulf Insurance, which added $815.9m in gross premiums written and $523.8m in net premiums written. Excluding Gulf Insurance, gross premiums written grew by 0.6% and net premiums written grew by 3.0%.

The company’s property and casualty insurance and reinsurance operations produced underwriting profit of $370.4m in the second quarter of 2024 compared to $337.5m in 2023, and an undiscounted combined ratio of 93.9% in 2024, consistent with the 93.9% in 2023, primarily reflecting increased net favourable prior year reserve development of $131.8m that was offset by an increased underwriting expense ratio due to investments in personnel and technology to support continued growth in business volumes.

For the first half of the year, gross premiums written grew from $15,181.0m in the first half of 2023 to $16,974.5m for the first six month of 2024. Net premiums written grew from $11,863.0m to $13,199.4m. Net earnings totalled $1,691.9m for the first half of 2024 compared to £1,983.4m for the same period in 2023.

Watsa said: “We remain focused on being soundly financed and ended the quarter with approximately $2.5 billion of cash and marketable securities (prior to Allied World’s subsequent redemption of its $500.0 million of senior notes) and an additional $2.0 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company.”