FRFHF - Earnings call transcript Q3 2020 | Fairfax Financial Holdings Limited

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Operator

Good morning, and welcome to Fairfax's 2020 Third Quarter Results Conference Call. I'd like to inform all participants that your lines have been placed in a listen-only mode until the question-and-answer session of today's call. After the presentation we'll conduct a question-and-answer session. [Operator Instructions] Today's conference is being recorded.

If you have any objections, you may disconnect at this time.

call Watsa, today's from opening for Mr. host is with Prem remarks Your Bulas. Derek Mr. Bulas, please begin.

Derek Bulas

Securities as filed Shelf set risk risk out welcome call which the consequences forward-looking to The Regulators a to risk any resulting and factors applicable to variety over is include XXXX and statements from required with morning, Good except Prospectus, adverse our foreseeable revise intention such in related most CEO, in available results. or and may forward-looking perhaps of Chair statements, forward-looking securities COVID-XX call on those I'll results contained pandemic. third to This call the uncertainties a or may Watsa. Base Actual personnel include by SEDAR, statements. of and which obligation under from now been to turn and differ our materially has quarter Prem now Fairfax Fairfax's disclaims Fairfax's investments, business, of Canadian result our the and of factors. as update which are discuss law. to any or

Prem Watsa

our that this would conference many still these call, to dealing quarter Derek. plan are the seven you, Allen, give call. pandemic third on be conference quarter some Good I Financial we And have Officer first at on of us Chief to our and and pass sure morning, with this I XXXX I'm that times. Welcome months degree. financial said Thank gentlemen. of the then accounting highlights not details. Fairfax's Jen and you time call Like to unprecedented would later, thought ladies to additional for

recent are cases. seeing we in increase Although a

slowly testing making working servicing of a returning a second many the throughout quarter, now of XXX% getting seeing who vaccine and sure wanted thank committed customers. world have basis, to to significantly on end being of are are world almost them. provide not from limited to service workplace our has and are beat and We I our the employees the in our discovered. period, our all our a At over again very customers, home all the necessary time and grateful people missing to employees the outstanding improved closer all been fully our are precautions, We're this therapies over safe. following employees new and to the to

to quarter of earnings our net the expect now We to XXXX, the end were return quarter third come of earnings $XX Coming in this net and million diluted to share expect which equates in $X.XX million normalcy the results compared per $XXX $X.XX, XXXX. to third net in Fairfax's quarter, in to soon. of an to we versus to third earnings

loss share common earnings our XXXX. investments share the share share for by increased reflects This was of value on book of net first $X.X per the Fairfax's nine for first For first the XXXX, of primarily million, in net quarter losses XXXX. months net decreased versus the billion nine $XXX months per by of unrealized quarter. increased X% importantly, $XXX float per the Most first in to our XXXX, nine X% of the paid to billion dividend $XXX share. adjusted to months $XX per float $XX in per and X.X% first by

X.X $XXX and included XX.X% million, catastrophe or companies losses combined insurance points, combined ratio million of or combined four points of of ratio $XXX reinsurance quarter, in consolidated Our third the COVID-XX and a ratio produced losses. which

XX%. approximately and COVID losses were losses cap Our

ratio with strong combined the losses, XX% on premiums growth COVID-XX Excluding was consolidated environment. pricing the a back in XX.X%, of

than combined high the included of XXX% frequency catastrophes pandemic. a with companies of unprecedented less of this All and a of times global generated exception ratios despite our major Brit insurance that

XX%. of combined have gross we months, nine the of For premiums with ratio XX.X%

and coverages. XX% a business The we losses, casualty, such interruption we a IBNR. from travel XX%. losses basis, of comes cancellation outside balance At across net approximately XX% have are XX% exposures, the of million On primarily reserves COVID booked COVID Of provisions the third approximately of as from case comes make are on the our this, More the losses basis States, comes United event remaining ratio areas had XX% $XXX COVID quarter, about our a Jen from lines. end and from up Paid XX.X%. surety, net combined about of in Allen. all Excluding companies. and

of may see, but companies, As there not The incurred, excessive the they others. considerable reported you and can some still IBNR is cost and in our may estimates be the prove not virus. ultimate to enough as uncertainty of

aware, pandemic the In addition, ongoing. well we're is all as

the provisions the of litigation As countries. of context may new and long various many market jurisdictions size XXXX remain we it losses of and in some in persists emerge. disrupts been made extra other an we profit and events. the in outcomes have ordinary as in has confident today depend as the loss All will ultimate extent comfortable the underwriting also economy, current absent earning code environment The filed to on with all,

the Our with X.X% quarter, nine months. million and strong million, of $XXX remained the X.X% consolidated reserves but redundancies in $XX third in

Brit as algorithmically XXXX their quarter, of to think Syndicate in Ki begin expansion follow-on the to writing expected of are collaboration announced and reduce our competitiveness. XXXX. creating This capital capacity, and years Brit anywhere tightening. The the an to business Our new January brokers announced its taken increases from in is Ki. responsiveness million a effort is in XX% fund venture in significantly be Fairfax of Blackstone that will the market, expand of amount Last hot launched fully think raised In to have business in September, of $XXX job world, Ki with as consideration Brit in initiative and Allen quarter pricing place efficiency, the very exciting prospects of committed to Cloud to we Google fourth insurance of Mark done business greater and XX% from come. the excellent and for XX, a to we positioned and the InsureTech insurance acquired to the aim of and $XXX and Ki and time Lloyd's cash million. a significantly well we're the remaining and CEO appointed by most business this Allen in August parts Mark outstanding launch [ph]. space, been I share X.X% Ki. running. digital has of On Matthew team standalone first comes plans getting driven Wilson, the up

partially upon was at net Fairfax million by months. Holdings Net income were of losses on investments with fair of its losses to $XXX with company the third value for exchange Fairfax net Now offset loss the stock The losses million for the Africa based The on net Limited. Helios Africa on will in the and on equities on and $XXX pursuant announced final an bonds million of quarter, nine recording $XXX on unrealized on be price loss gains. included operating the quarter merger gains or exposures foreign gain million $XXX closing. equity million $XX

with and the mark In had and to fluctuate mentioned, have first XXXX, of negative subject portfolio. mentioned results annual investment and only our long-term. are will stocks at This in sense and on quarterly make income the gains losses, X.X% investment quarter our a is the will return total investment over we portfolio. I IFRS bonds recorded calls this As market or accounting, and meetings quarterly to and our annual where at market annual reports we again and

of While investment second than our first of in the and quarter. losses return more quarters, the in had we total This is XX% a third positive return. X.X% offsetting

As annual total last It the I return for page XX on the our annual at look shows highlighted portfolios of you our previously last years. if to XXXX column. you, investment report XXX

significantly X.X%. XX.X%. four XXXX For the That's up we highlight were XX.X%. in I each in were just when in were case, return, a In we will time X.X%. out the were from year. of down. all investment we were each be we can In down In on years time negative X.X%. down XXXX, investors, line that were Only table finally up X.X%. you we down whole were XXXX, they had XXXX, But portfolio. up In X.X%. XXXX, we the in proven each XXXX we we were of we rebounded XX about investments. worried the four the And next years, up And were the And X.X%. we And down wrong. XXXX, in XXXX, our

made our of quarter before, first were third losses and in investment said quarter. more the up second than I As XX%

XX returns that the And Our our very over for are history worked years. this us has has last lumpy. shown

have never on quarterly We earnings. focused steady

even stocks value-oriented .com time difficult for never has extreme, technology Valuations been through extremes and XXXX. investing of particularly versus in now. gone very value many of long-term the growth the Now so exceeding in have years XXXX stocks, a era

COVID-XX. we the per $X.X economy a to that selling share, value came its the expect is Fairfax normalizes, come to it stocks for India value-oriented Perhaps while more recent at make examples the at two As clear may most fall. to book think of is September out main reversion you. and does in of We It exceeds economy well XXXX Fairfax that it's share. and XXXX. exceptionally is only matter down end the a pre-COVID from as India from a the time than of this Indian $XX.XX high recovers more $XX high per

by to David wanted I and was Atlas share you run Sokol example Bing Chen. formerly Seaspan Corp., Second with

of at As at very with flow cash share. and March to pandemic yield close height time XXXX matter a crisis price $XX per $X.XX at it and they third great a share, close Financially $X with sound Selling of goes only of stock at per of its before high. then - it's previous a close quarter in four the dividend Atlas approximately down management, XXXX year the price to free the times exceeds the ratio closed the Crop., in X.X%.

interest expect including expected Africa investing continue equity for Fairfax be be in Corporation over conditions, Partners appointed Toronto Exchange. Upon a be to be subject various of with and and to its Fairfax Helios share XXX Fairfax debentures Blackberry's, on We've in this the the transaction acquire X.XX% September, billions agreement end and maturing and holdings investment stock XXXX, normalizes. have announced been million Fairfax voting closing, The in Fairfax previously carried Helios listed renamed $X XX.X% XXX shareholder subscribed in our million debentures years. and is to Stock intrinsic we November portfolios Helios Helios soled the values a new the redeemed third fourth our at will our regulatory convertible and In per approval. of Africa. significant economy Africa Africa entered of quarter quarter. Closing of in value We as the merger XX advisor greater X.XX% of which at to to will on XXXX. is into convertible for Africa will the a dollars, our than portfolios stock return of

the filed excited of and merger. the the the Yesterday Helios about the Tope We team Co-founders welcome this are very and for rest to transaction Helios of the family. Fairfax Baba, from circular and we

get so private if our yesterday. time investments, And that for want of many can said had of our We we monetize including some you filed it, investments. because to it we many particularly

earnout Here's will and few in with what in in We company EBITDA invested. for on have have ownership We Horizon revenue about XX% which capital additional XXXX. in North have sold million public years. for Dexterra the $XX company. merged return billion the billion an Davos a We XXX% in done with now a $X overtime, $XXX we a

Just agreed a shares the subject for number Power one is and and Skates to performance and regulatory bats approval Core. baseball with company at our which significant to gloves sell to in manufacturer Bauer baseball profit us for Easton Rawlings cash peak recently, in partner

to a significant previously, invested Easton. Bauer combined a mentioned XX% profit Helios ownership Fairfax And and on for Of what expect Africa as based with entity. the merge in course Skates in I we is we

you want investments Year. taking of the public initiatives is private some I New this underway, Now tell in just to other are including our the Various start.

will soon I We significant as which value, shareholders see. have before, mentioned our built

$X.X the predominantly and might holding cash to Please company. billion meet continue uncertain note that holding this and the Fairfax have to in in any has face We period. in every in company short-term our securities approximately contingency cash

do CPI and have They time soon. making our example like Fairfax. well with They not and in India, an world up $XX to cash Fairfax comprised large case the than approximately the billion the XX%, period U.S. any insurance our dated XXXX taken At securities, are short continue short term of and years. to cash September notional either Thomas billion company's Cook We the flow have investments protection the investments of amount of Please million companies not but $XX.X remember, where to and representing unprecedented the contracts All other reinsurance approximately billion we long-term good In only lines, $XX $X.X Recipe and period downside maturity XX% and time Cook comfortably contracts short-term remaining the an of operations. with event Africa, have We hold of continue treasuries. in support average Fairfax any this deflation that provide take in XX, through approximately down events. cash billion survived lockdowns portfolio credit insurance cash cash a large need of across to are linked these will dated financed for of lines or themselves held reinsurance come three carry significant Thomas investments the them and and world this of investments, subsidiary with they at significantly. revenues to and catastrophic uncertainty. turn us have down of $XX from

investment rates we interest for as rising Our from rising largely investment we yield, will unimpacted benefit income. read fact by not in be will portfolios have

billion run all Hamblin pickup friendly billion HWIC approximately the in XX in portfolio a our fair premiums, on in felt With Watsa stock market, operating Corporation, underwriting $XX a years. and rate discipline, culture Investment huge approximately of a focus $XX over grounded on of gross

was previously is best come our Director of to for shareholders generate against committee, racism, Canadian seven the to has to the Johnson Johnson this were right expect actions announce the being anti-black community. over The that for call systemic good for as and time. October rally shareholders. in We a led and honorable yet We served reappointed pleased David is logged our business our return the a that a committee, black call, welcome to been create to Fairfax. communities as the to and within black the for people Mr. Council I'm say, last opportunities to Fairfax role We initiative Canada. a workplace to our I from General his systemic The the Board. had of initiative. back our mentioned Pinnock, Financial to of the Leaders anti-black that and pleased Officer action Fairfax Governor of companies step eliminate CFO, racism appointment Director on down joined initiative Business in the in as from of and required NorthBridge. Fairfax North America from community is of David up Canadian I On with the who's United running each one the at Craig our black Kingdom Chief is XXXX is representative from by black

Jen? Jen I quite have excited Officer. the progress We we Financial in many are initiative. transfer initiatives this over about will call to and our now Chief Allen,

Jen Allen

But improved non-insurance on $X.XX retail quarter some few have We million. Fairfax $X.XX companies by million Helios a non-cash higher reported we're I'll third rebound our finally, of third in the of of gains underwriting in Taking other regarding restrictions. is additional in a later remarks with before net reported reported benefited start and loss key was certain $XXX operating quarter. on Prem. COVID-XX equity from Fairfax performance underwriting losses to you, transaction per expense and We of in XXXX And attributing XXXX. financial million Thank quarter the of our quarter my to reported strong from million. with positive our the net operating a to additional The the of million that lockdown starting $XX losses $XX subsidiaries for provide group. profit income and achieved basis market and basis. performance reported net which and results. highlights on impacted the with despite industries. third Africa in That or the the per share compared continues been of pretax an key I'll on of million catastrophe above transaction comments adjusted interest fully COVID-XX or the our $XX which and $XXX earnings non-insurance within the performance directly markets global of pandemic reported when highlights million after results the XXXX, affect a into strategic we of was diluted earnings share $XXX investments fully the Fairfax the diluted account, $XXX after the Holdings, segment restaurant see

which $XXX basis, For first months net earnings first share of fully diluted net reported to per billion, when of the on $XX.XX or fully XXXX, the of share nine $XX.XX Fairfax a and diluted we basis. nine compared XXXX, a of months reported per on $X.X loss a million,

reporting Looking ongoing our starting underwriting to with the in detail reinsurance of and insurance results our more segments, operations.

continued losses which months million COVID-XX nine strong, reported and related of in million, catastrophe million $XX.X XXXX. billion the compared ratio losses in despite months XXXX first combined of of $X almost Underwriting $XX.X first to Our and That core combined million. $XXX at nine million and higher in profit of quarter below $XX in at quarter third of of ratio operations profit months underwriting XXXX first of of and XXX% $XX million of nine the XXXX. with the at the $XX.X million. an compared and performance ratio combined a to XXXX million to Underwriting profit decreased $XXX million profit underwriting our underwriting combined to be to at a in remained of $XXX the performance of reinsurance with strong in $XX.X losses insurance $XXX third underwriting of million, the ratio very a

COVID-XX exception insurance of result the quarter and nine first a months impact underlying profits of achieved ratios XX.X% losses. in Brit primarily and XXX% results ratios core of as to $XX higher the nine Odyssey third $XX $XX the million $X XX.X% ratios and third companies the All The underwriting Overview below combined NorthBridge of of follows. and their Group of XXXX, improved respectively. XX.X%. and and months profits with of of first million of reported XXXX million, the and reinsurance million our of underwriting combined for the COVID-XX reported as are and underwriting quarter Crum with million million & reported million $XX combined of ratios XX.X% and with and reported losses. and and XX.X% combined profits and profits underwriting XX.X% marginally million despite losses combined Zenith National of XX.X%. of $X $XX underwriting Forster and ratios $XX catastrophe of XX.X%

and ratios our of Looking $XX or first Asia, $X loss and ratio $XXX underwriting to which million million million, Other combined with reflected and Brit. respectively $X points. of losses XXXX, and profits profits X.X reinsurance X.X points or XX.X% losses ratio $XX of million respective also and periods. insurance XX.X% and the million ratios related of components the and operations. reported and Asia of million $XXX ratio combined $X of Laura quarter XX.X% ratio And third million million, million and reported million Fairfax $XXX and $XX they reflected strong $XXX finally underwriting points or COVID-XX ratio And ratio the combined points $XXX,XXX third in XX.X%. In of XXXX, even the segment World $XXX and losses and million prior included XX underwriting reserved ratio million quarter XX.X%, of of of million or or period. XXXX the other combined premiums reinsurance months and an COVID-XX following. combined or losses respective nine losses, Hurricane underwriting benefit ratio group. ratios of $XXX relative of expense finally, $XX Higher catastrophe reflecting XX% ratios of earned net of The and and combined Rounding of million underlying reserving COVID-XX reported Fairfax growth adding first and In profits points XXX.X% insurance impact of respectively. underwriting X.X out our the the in combined combined each XX.X Fairfax which with the Asia combined $XX with year improved primarily of current to X.X underwriting of XX.X% of reported in period favorable ratio million months X.X nine million $XXX and the ratios combined points. and in the of X.X expenses. $XXX of $XX and to combined of reported continued Key reflected of Brit or XXX%, losses net Allied million points. increases million. combined $XX combined with $XXX.X to development a COVID-XX

year in Additional insurance details on segments each and net losses third ratio interim reserve reinsurance the combined of prior catastrophe favorable report. on the and quarter respective the are MD&A development of Fairfax's impact disclosed

the COVID-XX $XXX were but represented losses, Group incurred, net were at $XXX at not million As first and approximately COVID-XX World primarily exposures noted the international nine Odyssey also principally approximately of $XXX million, of losses losses of business interruption reported our of international from reported comprised XX%, recorded XX% and businesses. coverage for approximately which of event million, primarily principally $XXX losses of Brit months cancellation from An in Allied million. XX% we of comprised businesses. XXXX, which were

operation. to months the and in XXXX, quarter net $XXX increased at premiums reporting net billion operating X, on the include XXXX. increase of March $X.X operations. NorthBridge's written million XXXX. Runoff US Barbados billion X.X% of written by Starting growth only XXXX. in premiums XXXX, runoff The almost million by contribution of $XX from to in is reduction to in period written an XXXX. That to of And of the runoff nine to of in the in a approximately quarter $X.X of equivalent XXXX, reinsurance on Looking of in comments $XX loss operating loss XXXX. months compared runoff of the a almost $XX April expenses. the the first insurance US runoff million operations. nine-month With of XX% reported operating in from XXXX all our In first A XX, third $X net third operating increased from European our nine billion by to billion. of Subsequent results few runoff an Riverstone same the premiums

segments. Turning to reporting results companies the of our non-insurance

offset million North deconsolidate Horizon Africa's and carrying Fairfax by income exceeded upon Fairfax COVID-XX quarter, sale losses and our these of September that operating Mara expense million as reported with income XXXX reflected the and loss impacted for restrictions Fairfax which million businesses million in to quarter As principally segment losses and on third the as each other other industries of segment's compared cost of sectors the the as value a volume segment operate $XXX for first at investment loss that that been this held in majority retail non-cash The $XX retail group disposal nine revenue company impact accounted suppressed lockdown first a Fairfax by net six loss $XX XXXX held in $XX awareness, lift. restaurants a months and of equity AGT. before classifying its a sell. on the Africa only after the to third and taxes and by of a began reflecting reported operating result That in in reopened sale. The government in during mandated constituted retail investments non-cash less operating as and merger Africa the of of of strong restaurant estimated excluded restrictions Africa they XXth, in on to XXXX The non-controlling fair the net at transaction statement million. Fairfax This X% between recorded helped restaurants in accounting recorded operating the expanded its decreased of $XX of was quarter months respectively. interest and $XXX exception Revenue third and partially the of platforms and for of consolidated of in restrictions the the of investments Accordingly, investments Helios, million of Upon XXXX $XX losses of by reported decline shareholders' pretax second income in operating ecommerce of Fairfax non-insurance whose the of pandemic. a equity and earnings. MD&A Which, recovery XXXX. a by XXXX. in lockdown reporting revenues common losses presented The of and modest account partially of its segment in expects million. to in the in first were of $XX September million recording benefited the Again, third of quarter offset business stores entity COVID-XX interest revenues interest, and closing exceeded significantly XX, as on investment market carrying in new associate, of that for XX% brand restaurant decline will on closing. traded Fairfax an investment Africa Helios-Fairfax the shutdown the quarters the equity value At value restrictions. price result share merged based are the Partners the initial from XXXX, have XXXX in in Africa the Atlas store

of the consolidated Now investment looking to results Fairfax.

the of from U.S. our interest third lower bond U.S. sales into XXXX. of by in And a offset Our sovereign corporate in throughout higher and consolidated Treasury reinvestment million decrease in the XXXX. income yielding periods and interest million $XXX partially bonds decreased earned the Reflecting months Treasury second and of respective bonds. yields general proceeds dividend 'XX high of Bond quarter half maturities to quality U.S. and $XXX million income and principally to $XXX in $XXX year-over-year XXXX and due nine the first million

in Atlas Riverstone profit of share $XX by Our associates principally partially million consolidated XXXX, of India offset and from consisted at which of investments from and was of million $XX associates Corp, from million Fairfax $XX the Eurobank, million third Fairfax $XX quarter Barbados, Africa. losses from

its Our a mark related XXXX share gains consisted off Life million. in related consolidated of long million dated $XX principally third $XXX of profit distribution on from from associates $XX primarily quarter bonds, to million million of to that Finance to Euro of spin that IFL and Greek $XX the gains of of market approximately

compared at despite increase book since for XXXX. X.X%. and The the of quarter their operations third recording was our exposures investments Our of That to an loss, increased XX.X% million on equity the for to net our and from performance, short debt to in loss of few the of compared primarily $XX increased non-insurance closing book X% a pretax share offset of excluding from recorded quarter Increased in contribution consolidated million paid consolidated interest, And other. to of on losses in increased of higher And quarter XXXX, on shareholders XX September Africa the XXXX, XXXX at decrease after our non-cash first total issuance after in April XX our $XX quarter paid our core that the debt at total for to comments continuing reflecting quarter exposures. X.X% of $XXX, share, that's $XXX losses, And foreign per per net At income underwriting companies the partially on principal before common our decreased gains compared XXXX related XXth, $XXX at and be the of XX of Primarily net value third you, $XX on very adjusting third loss Fairfax COVID-XX our second of adjusted equity ratio our by losses. debt reflected The financial million, the Fairfax's to cap in value XXXX with but position, loss a to expense share XXXX, the of per gains finally, increased of non-cash the credit our QX net to transaction. Prem. the strong million loss catastrophe $XX gains favorable $XX $XXX Fairfax on investments $XXX net XXXX. on our total draw million non-insurance $XXX and equity December facility and Africa XXXX. XX.X% was I'll reflecting of it to dividends third adjusting and related from now million, our losses common additional net in XXXX, million of quarter XXXX million in share related pass transaction. on September in representing December investments over currency the back to [indiscernible] of

Prem Watsa

now Thanks the so name. question. Please it look your try give that always name, all to company on limit your us to answering one call. fair to your for only your questions Jen. We joining forward as is And to

So the ready for questions. Ella, we're

Operator

We now Tom our speakers. answer will first Thank question queue right. Instructions] line is now All MacKinnon the [Operator line much and begin Capital. to from participants so from you have Instructions] [Operator All of Tom coming in open. question session. we BMO your

You may proceed.

Tom MacKinnon

very Good Yeah, morning Thanks Prem. much.

Prem Watsa

Tom. morning, Good

Tom MacKinnon

$X.X cash [indiscernible] the at billion. on Question

you'd I $X always you've said to billion there. think like it at least be

right with comfortable gauge Just where trying to it now. us you're sits

in paying right to Just that as you'd have in are - comfortable gauge we dividend are - in you you trying to whole the be you're do $XXX now companies from expecting stands some the it $X.X because million common dividends So operating dividend a with fourth cash the billion? January? position quarter be that how just going

Prem Watsa

want basically to we keep an excess Tom, of Yeah, billion. $X

paid and we credit we from And dividends get to we facility down you $X know, to billion. as So that expect huge a $X.X billion some other some have back, payments.

that million end was zero used. So which to we'd back last also of there's it And about time $XXX at pay we've year. that the over

to extra in $X finally Tom, support money focused our So - yeah, shares. this so we're taken very that's insurance enough cash. focused on witnessing. buyback were market billion we're money our in plus companies that we the We're And keeping on hard having

the that's at order we'll So it. look

Tom MacKinnon

which if a would than bit here? to higher I $XX there you I Could anything losses I'm have in unrealized notional. mean, I high hedge seemed XXX get were quickly another, little equity expected. the could relative And notional, is seems Is million. that's squeeze missing the losses

Prem Watsa

remnants no, right, that's of we've covering. Tom. It's Yeah, the what

but it I steadily So the gone. covering then it's quarter, we've slowly first before you guess quarter, that told and in and I second

it's on out. the it's So way way the - to on

Tom MacKinnon

Okay, thanks.

Operator

you, Thank Tom.

Jaeme Sir, line open. Bank Our Financial. Gloyn line from from the your is next question of coming is National

may your You now raise question.

Jaeme Gloyn

morning, Yes, thanks. Prem. Good

Prem Watsa

Good morning Jaeme.

Jaeme Gloyn

either I pretty percentage other terms where every to combined flat so was is that the to its down question in of a see NorthBridge First, was on subsidiary increasing basis. that ratio much my ratio - losses. had it COVID related combined

take losses what basis? on NorthBridge higher was relative QX changing on absolute So to those in I'm an a in and wondering,

Prem Watsa

Jaeme. last not that? reserves that to for reserve there's care the you years. add Yes, redundancies put get conservatively to long-term Jen, the we've much, upfront that Mostly extrapolate And, we were that, some can mostly IBNR. XX There you then had facilities, but and like - like would put and to we

Jen Allen

Yes.

there highlighted additional exposure You've biggest care third one, it in is but through, primarily that quarter. related long-term the significant be was recorded won't care coming facility long-term which to the probably facility, the

Prem Watsa

the many conservative to just and not the us. this Jaeme soon as has to being like up as said see up and And times us it. putting as we past come and them We hurt help I've put reserve. It's before,

us. it, And so you redundancies that's as have continue if have we helping to

deficiency, for time longest you reserve had strong. us. our now, very and that's redundancies are companies have If in that means under we've And hurting reserves reserve, all you're the our

Jaeme Gloyn

Thanks.

Operator

you. Thank

Our next is [ph] Jonathan from Chin the line Management coming question of Group. Private

Your line open. is line open, sir. Jonathan, your is

now your may raise You please. questions

Unidentified Analyst

morning. Good

through where seeing One can underwriting. Take you you're about secrets us of tell talking opportunities. the us

Prem Watsa

bit Jonathan, And louder, a please, little Jonathan. -

Unidentified Analyst

Yes.

the see can reinsurance opportunities, there's more So, underwriting. on And you. seeing geographies? find if maybe you're if good Thank side, the One, exposure. morning. where versus through And the you on some insurance of side, it's the it and rate

Prem Watsa

the the United question, in States, casualty in rate the getting but in particularly the Like is it's good in over increases, insurances Singapore. now Jonathan. United Kingdom. Yes, world, end. it But It's you're all It where is the Jonathan.

actually We Asia. have operation an first that

Whenever depending said, And I it's London, the which third market, as in much, at. area going the see going up Asia, up XX% terms the up looking get a XX%. going specific as are But North hard place. is significantly. second in prices over the but in not tightened. to X%, tightened is you quarter, all being And when insurance across, X%, tightened. terms more are it you're the going going the America. So, XX% terms In been in Reinsurance have on quarter did than

we're thinking a And market. last if we're good is wherever midst Jonathan. history for a of these So, very the any in few guide years.

Unidentified Analyst

ago, some on quarters maybe of those goals, couple years of that your couple a you you a then, a goals? stops Thank equity, nature, ago, you. outlined return of And and increasing on Is written progress that from things anything premiums. Okay. there you've net achieving obviously made lot

Prem Watsa

achieving there. at us No. goals? stops from not that is Anything all XX% our

technology me stocks. And been you, years. rarely tell in have like such where Let there's business just period the growth-oriented I've a seen for stocks XX and value-oriented I from time a divergence

came I that So, just Zoom in is as just Zoom, few $XXX me a cap that market $XXX months, we net gave our again. of the by examples six first But Exxon. about give at same and Technology, today. $X got I it which the billion one up. of $XXX had the end It's way, billion. million. July, a a a I looked just profit of let base billion use At it for own approximately it revenue I Zoom of portfolio. video. size the all you you across looked

significantly. Johnson, the Like market oriented have only this insurance called the me really it $XX ago. picked And a of XXs a in talked billion the too times is situation And premium. to period market. in has this had And time. have Polaroid you this you is capitalizations happened you're justified stocks and we if which as the long XX Kodak. company of million time periods insurance be that it In XX. days divergence. XX%. got almost earnings. about him haven't & of were dropped report. $X late Ruth business, market over these they or times And I earnings, billion like much. know 'XX, and out $XXX And And billion. follow Ruth it's don't it's short stock XXXX in things premium. growing went billion XXX where So, a to XX% I've that when early can and XXs that exceptional seen. they for And reminds went XXXX, few I Fairfax, $X And that the by And It's was just public, as of XX Johnson And big cap growth we $XX Nifty of Nifty McDonald's, the approximately what of 'XX seen and the in

father prices the are future speech called years. But which the And like and Renaissance They never XX-years value reading he it, McDonald's, Value and XX I an of Johnson Graham out back. I to & those after next exceptionally never came see for And next don't the great in companies. And similar years. the in I Kodak Investing. And it. Zoom a question remember Ella. few we're you, growth said, phenomenon some in Polaroid guide, two of it time. Thank of any XXXX. Eastman came and stock think ending. 'XX. will sense. them on doesn't of or It No the like The I three out even saw going know came types $XXX And ones And Ben speculations And at well. he is months of these was, the investors. as John. it's was He value type gave just Johnson to have did next next analyst make a at can history not But just one it billion, good like that. if forecast any if

Operator

Your next the Junior private from line line question open. coming Ra, is of your is investor. a Junior,

your now may please. question You raise

Unidentified Analyst

Good morning.

some Are to only investment? there or private of So investments. year you one is applying private IPOs I'm multiply wondering the next guys doing you're thinking about

Prem Watsa

mind. don't repeat that you please if Junior,

Unidentified Analyst

you guys IPOs. I So or might on in that, call be earlier one XXXX stated there couple think the

Prem Watsa

Horizon private where of we a got where course, to we companies. got of example strong significant them and you very had good it just think some IPOs. take But over We've can't Horizon over North public. We're public. yeah, XX%, books case, some have investments be can planning, they're in looking North, with a private some we North Yeah. public. Dexterra time. build compared companies. are that I low values be the them they'll But we we've already talk we about And I And we've gave was will very lot time, - their Horizon at mostly goes till companies And got very merging think like we worth company.

Unidentified Analyst

How an you guys and some the lessons Okay. on of companies? if to plan Digit? provide doing update other it's the insurance And if bring there into could you learned

Prem Watsa

you're Digit? talking number Sorry,

Unidentified Analyst

Yeah, sorry, Digit yeah.

Prem Watsa

growing. already. it's a breaking few Yeah. it to will is three Digit minus from India. $XXX and since the in end million market And million wide scratch. it's million, began In company revenue [indiscernible] a It's is is years the digitized fully of even It's plus years that on $XXX Indian phenomenal XXXX maximum, or $XXX March be open.

company grow opportunity So for than XX growing the this aim to is the - points which growth is industry at XX%. at huge. It's is growing XX more percentage its at

company it's guy. something India. XX% been He's growing Kamlesh he's an So insurance insurance in like the at that. And second largest is, built

phenomenal we be the to a a to XX% And we going so and when below we little owned XX%, be XX%. at think government it's expect go to And us ability to gives that success.

Unidentified Analyst

Okay, thanks.

Prem Watsa

Thank you.

Next question.

Operator

a line coming line the investor. Gable, open. Christopher Christopher, your as from is private is Our of next question

may now raise please. your question You

Prem Watsa

Christopher. morning good Yeah,

Unidentified Analyst

Good a I sir. but first a have sir. context morning question,

Prem Watsa

A little Christopher, louder you I if if don't mind.

Unidentified Analyst

bit composite, that and little problem. to a of last From a statement No, Poor's XX% casual XXXX, pre-COVID. period, that first I do shows relative & no proxy that the a Standard there's probably by between have Fairfax was chart question but a the context. XXXX underperformed during

for which a Going or of to Marco Virtue period shoulders XX%. And was from like back something X.XX me with long by by is up all yesterday that XXXX big up period do was a I'm factor calculated is suffering a relatively X.XX that what through to amount way that of having one Fairfax and my to question due underperformance And to, over X.X, COVID, respect, over do I long management wondering, of includes declined factor it? time, of one X.X, does time. do of to

Prem Watsa

a Christopher exactly very Well, good you're that's right. first and all question of

the low company it's fact performed selling right five at XX% haven't in pointed as pointed proxy like The XX% last as out. looking circular value. is well in you about out now, XX% ton went book intrinsic you value book It's a And price at you below we is you're much you years very is bought the - in selling the our I understand told ridiculous when a We stock company. as XX we of the value years said whole you higher. to going myself. can price. stock on call, and tell But our is what this price of And I the of can't I've which do. I tell

track you investments, place world. we've returns to XX-years in seeing And it's our years, able What today I've the last exactly And from companies over very taking in been kind years which in operations be have But of back got our through XX are Voot. exceptional. favor out at good. good. you're favor today's think question situations Zoom right. for you Christopher. spades. value Where out and price, every we'd and at will that. stock next few haven't that think beat quite been And tremendous will company look of looking thank to you're But five you're come your that the speculative five The years, got I You've a now the because marketplace. if highlighted insurance just like is of for been across investing haven't the you is record

Next Ella? question,

Operator

is Craig, question of investor. your [indiscernible] as line from private our coming is Your line Craig next open. the

may now your You raise question please.

Unidentified Analyst

Retail.

want meeting in $X.X revenue. think billion on and my I compare have doing all on. of XXXX, our about likes memory income and William me in from revenue of XXXX serves the annual And I from we're the [indiscernible] if you restaurants, think to I the Ashley correct,

just summary? If overall you us an could give

Prem Watsa

Yes, just that's a good question.

you list the town golf in because of patio, home, earnings goes this than a The pickup closed was reacting if place money. one. the example. retail, adjusting I that well basis. of because had of you'll for it see see of life third the for too when profitable. choices down, golf. didn't have that more in these And you'll have Toys-R-Us they up and EBITDA They numbers things. of our quick down good to greatly, check that pandemic. Just Adjusting worked the the a to curbside they've suffered pandemic. all a last When all And it they And made guess revenues And sporting or is doing down. positive of closes, us were And results in you pandemic, that terms comes Then restaurants go year, record quarter. have recipe, much to opened the course out,

restaurants come they've [indiscernible] some I time the point very period time out this closed But made also period is, had for and and So, you negotiated others closed. strong.

as we we returns to strongly. the retail in back unprecedented here. investments But So, we've normalcy. back. come we And back, they'll come to as come all our And as my think we do that's think had closing economy think an Those our that investments. companies we a we And all are well expect area question. will good

Unidentified Analyst

Thank you.

Prem Watsa

you. Thank

question Next Ana?

Operator

is from open. is next your question Our [indiscernible]. line line coming Sir, the of Alan

may please. You raise now your question

Unidentified Analyst

Prem. Thank Jen. you. Hi, Hi,

Prem Watsa

Hey, Alan. morning Good

Unidentified Analyst

IBM, Equipment, Avon the 'XX Digital those Nifty or recall add Data Partners XX I'll the names. to you'll General,

Prem Watsa

of Yes, course.

Unidentified Analyst

know. already We

Prem Watsa

Yeah.

back Alan going You're

Unidentified Analyst

unfortunately. gone I'm

Prem Watsa

too. Me

Unidentified Analyst

your you which a feeling it got What question anyhow. have where I But to exactly. your we avoided I'd far? right, disagree. is about may Yes, know like so thoughts gold,

Prem Watsa

understand able avoided that. we've felt been never to We we've And it.

price always so gold. it to and then, but of We've looked been it. never at However we've figure able out owned never the we've

passed we've on so it. And

Unidentified Analyst

a has stock that's didn't about the you to was who that mentioned, add fellow enough down I underperformed. overnight. your Okay, the Last answer. to moaning fair And comment time

go all underperformance fields we our of no So through what these matter periods of-

Prem Watsa

previous performed do Alan. this XXth lot to understand our guy's you we've But what, are a I'll focused recently. year. And concerned. that shareholders And well he's I we we our we been. is concerned very haven't our the want shareholders. kind tell of are what ever as Well, understand and talking about as I And for

well. have weren't done last been golden, our our insurance were - are companies done value poor product of our always investing, and Why companies it. well. been doing our More and plus And that? they really changing And years Our really the company's been will well. remember, insurance recently on investments, In have XX haven't well. for all our doing investments on And more well. some our [indiscernible] insurance you focused choices companies recently, past, some

Unidentified Analyst

correct is year has this time, when Am I your that this this time in Is value? last the century book first the this stock so? below or sold first

Prem Watsa

Alan. long time Long,

Unidentified Analyst

value. not did book sell It below

Prem Watsa

on a it saw rare myself. to I that It's time And you've at - book buy been that, when able our stock below Howard, value. I I jumped

I'm So of all suffering with you.

Unidentified Analyst

Okay,

Prem Watsa

Howard. you, Thank

Unidentified Analyst

You're welcome talk soon. we'll Yeah,

Prem Watsa

Yeah, next Ella, very thank question. you much.

Operator

right. All

coming the Mike Company. Mike of Our is Davenport next line is your from Bill line from open. and question

raise may question, You your now please.

Mike Bill

short? our Prem, equity could you that the you. in give more this we little or to Exactly, on general portfolio? short So that that color what Thank the Friday short And quarterback the morning because a relative or strategy Monday think notional us are a exposure? size just explanation. there, pretty was $XXX quarter I deserves exposure, one. a third morning, I is number. big mean And million to in strong equity more on But a losses little don't

Prem Watsa

and companies want that. meaning the too pointed And out It's all unfortunately, individual of do significantly of course remnant. it we'd gone. any be of the quarter. assure And will a let future said so gone just them. This fix don't a reduced has that you in we it's not not to them we marked the not to not you names Michael, won't or as then as it. talk know, And market that it. And see TSE And soon time, we out we will don't about we've So short relatively up. publicly, will buy is third just we quite we've the all cover in the them, long And till be we short at on samples I me or as you relatively shorts, soon, over. but But, you so short indices, ever.

more And assured so will those. be there no of rest

Mike Bill

Okay.

we don't short short we short? broadly, So we guess what said You companies or S&P. I individual exactly just don't are the where The TSE and

this is - about? understand So I it's don't with hedge what designed still what

Prem Watsa

Yeah.

Michael, position we've past. the basically So had it that in what was a

this covered. to is So we've in it's an a that it. that short position position remnants covered new last had the of we've the And and not and individual past covered

Mike Bill

Okay, thank you.

Prem Watsa

Thank Michael. you,

the Next last question perhaps Ella. question, and

Operator

All right.

your coming Bank from Financial. Sir, Our line the from of Gloyn open. next is is question Jaeme the line National

raise now may You your please. question

Jaeme Gloyn

actually were about I thanks. taking up the interruption. losses Yeah, to on related business quarter. I $XX like COVID was first things, - want this just to that two million follow to on it Looks wanted

Another flowing through third And related to as Is more chunk yet to losses. then, to a on those how COVID event for this should related cancellation. quarter that items, see expect evolves? we a the that basis captures of only quarter

losses like million would really have million this was what that driving about So other those COVID quarter? to to $XX $XXX amounted

Prem Watsa

cancellation, But And later Jaeme on. you talk to can Yeah. right. Jen, now event

the business it's coming going event virus for a think don't pandemic it's insignificant. losses, event XXXX know losses in we've losses future. so from. what taken there, we - significant got to live But three to their in next the come cat. this So cancellation, have has we that's Brits We mainly the be is it's months. cancellation and And - think on you just where be continues I in But becoming a if Lloyds the there'll 'XX some from way in well, told pretty this the in

spite that's to in the cat But some way these And so year. of annual cat are the are going prices for the why an the profit we loss whole our remove business, we remove whole losses made so make adjusted expect And - are We remember the up point profit for above claims losses, the profit underwriting But prices made of the if if And nine - not underwriting you - going for we'll year. I that, always some make always the claims. there'll losses. up that these significantly. And underwriting underlying ratios. the have be you the losses, we'll - haven't COVID months.

well and ratios history is the it any well. But high. those guide, three so now, And from look loss our past. or developed When in had we've ratios that if years two very you we're loss keeping

insurance environment for a very expect insurance property so to And we as right very years that well the casualty It's companies ahead. do good business now. Jaeme

us. be So for Jaeme, thank thank end. you will hosting question. And your Thank you Ella. you, for the very this this. joining much And And I Ella, thank everyone for

Operator

And a Have that day. thank We You're today's welcome. for you concludes call. all your great participation.

Fairfax Financial Holdings Limited (FAXRF) 30 Oct 202020 Q3 Earnings call transcript