Toronto-based Fairfax Financial Holdings Limited continued to post strong operating results for the first nine months of 2003 with record net earnings of $380 million for the period.
The company announced, however, that its third quarter results had been impacted by “lower interest and dividends (reflecting almost half of the investment portfolio being held in cash and short term investments) and substantially reduced realized gains, as well as increased runoff and interest costs,” which had, “resulted in pre-tax income dropping significantly and in a net loss after income taxes and non-controlling interests of $20.0 million in the quarter.”
Fairfax’ announcement stated that its “combined ratio of its insurance and reinsurance operations was 97.0% for the quarter, with each of Northbridge, Crum & Forster and OdysseyRe producing a combined ratio below 100%, and 97.8% for the nine months ended September 30, 2003.”
The bulletin also noted that “During the 2003 third quarter, net premiums written by Northbridge, Crum & Forster and OdysseyRe, expressed in local currency on a consistent basis, increased 39.1%, 36.9% and 38.6% respectively over the third quarter of 2002. Net premiums written in the 2003 third quarter decreased by 15.1% in Canadian dollars over the previous year, but increased 27.8% excluding the effect of changes in foreign exchange rates, TIG’s discontinued MGA-controlled program business and the premium for TIG’s adverse development cover, while realized gains on investments declined to $44.1 million from $465.8 million in 2002.”
It also indicated that as of “September 30, 2003, the pre-tax unrealized gain on portfolio investments was $340.7 million (compared to $207.9 million at December 31, 2002), of which approximately $120 million was realized in October 2003.”
Fairfax’s detailed third quarter report can be accessed at its website www.fairfax.ca.As previously announced, Fairfax will hold a conference call at 8:30 a.m. Eastern time on Monday, November 3, 2003 to discuss its third quarter results.
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