Fairfax Financial Q1 Net Falls 9.74% to $35.2 Million;* Operating Income Up 21.4% to $104.3 Million

April 29, 2005

Canada’s Fairfax Financial Holdings Limited announced net earnings of $35.2 million for the first quarter of 2005, compared to $39 million in Q1 2004, a 9.74 percent decrease. Pre-tax operating earnings rose by 21.47 percent to $104.3 million in 2005 from $81.9 million in 2004.

Fairfax listed other first quarter highlights as follows:
— Despite some softening in insurance markets, which was anticipated, the combined ratio of the company’s ongoing insurance and reinsurance operations remained excellent at 96.9 percent (compared to 95.7 percent in 2004), with Northbridge, Crum & Forster and OdysseyRe producing combined ratios of 91.4 percent, 95.5 percent and 99.8 percent respectively (7.1 points of OdysseyRe’s combined ratio resulted from catastrophe losses for current and prior period storms).
— Net premiums written at the company’s ongoing insurance and reinsurance operations increased 5.9 percent in 2005 to $1.1046 billion from $1.0426 billion in 2004.
— Underwriting profit at the company’s ongoing insurance and reinsurance operations was $33.5 million in 2005 compared to $44.4 million in 2004.
— Cash flow from operations at Northbridge, Crum & Forster and OdysseyRe increased significantly to $232.3 million in 2005 from $115.7 million in 2004.
— Total interest and dividends increased to $107.1 million in 2005 from $92.4 million in 2004.
— Realized gains on investments in 2005 totaled $131.4 million in 2005 compared to $72.6 million in 2004.
— The company had $588.4 million of cash, short term investments and marketable securities at the holding company level (including $105.5 million at Crum & Forster) at March 31, 2005 compared to $566.8 million at the end of 2004.
— Cash and investments (net of $599.5 of liabilities for economic hedges against a decline in the equity markets) increased to $13.75 billion at March 31, 2005 from $13.52 billion at the end of 2004.
— The pre-tax unrealized gain on portfolio investments was $285.9 million at March 31, 2005 compared to $428.3 million at the end of 2004.
— The portion of the company’s future income tax asset related to capitalized operating losses of its U.S. consolidated tax group decreased by $43.3 million to $208.5 million in the first quarter of 2005 as a result of profitable operations of that group.
— Total common shareholders’ equity remained at $3.0 billion at March 31, 2005 while common shareholders’ equity per basic share increased slightly to $185.00 at March 31, 2005 from $184.86 at the end of 2004.

Fairfax’s detailed first quarter report can be accessed at its Website www.fairfax.ca. The company will hold a conference call at 8:30 a.m. eastern time on Friday, April 29, 2005 to discuss its first quarter results.

* All amounts indicated are in U.S dollars

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