Fairfax Downgraded

Fitch has downgraded the insurer financial strength (IFS) ratings for the members of Fairfax Insurance Group to “A-” from “A” and the senior debt rating of the parent holding company, Fairfax Financial Holdings Ltd. to “BBB-” from “BBB.”

The IFS and senior debt ratings were placed on Rating Watch Negative.

Cited as cause for the downgrade was the ongoing deterioration in operating performance and loss reserve strengthening in 2000 that were outside of Fitch’s predictions. Additionally, the major decline in holding company cash and marketable securities in 2001 in view of debt service requirements, small interest/preferred dividend coverage, dependence on realized capital gains in the earnings mix, and medium risk-based capitalization of TIG Insurance Company, were all considerations.