FRFHF - Earnings call transcript Q1 2022 | Fairfax Financial Holdings Limited

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Operator

Good morning and welcome to Fairfax’s First Quarter Results Conference Call.

Your lines have been placed in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions]. Today’s conference is being recorded.

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

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

Derek Bulas

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

Prem Watsa

to quarter you and Jen conference Peter ladies you, XXXX couple quarter Thank Welcome some and Chief to President, Chief financial call. provide our Officer a Clarke, additional comment then highlights give the to Allen, I to morning, gentlemen. of pass on first the plan details. to Fairfax’s Derek. and Good call Financial Officer, Operating our

it The on of under the wanted week refer some Now week to so website I ago, make we and a just and -- had so easy our to slides just about just news. last you. our to are for slides AGM

go under that can our to our news, you presentation you website, if So we had. see Fairfax

I wanted them. couple to highlight just of So a

in companies, gross quarter, just the up continued it premiums XX, but highest XX%, net page property the casualty that and up first XX our XX%. the the XX, top out says of slide on XX% premiums were growth companies in of world, So was were

Barnard Now you it might wonder the in why Andy we’ve AGM. about talked about it. talked

experienced very We this have focused management growth, profit. That’s team we’ve decentralized operations, on had significant growth. stable why underwriting

wanted I you then make rates, major low, slide X from. protected interest investments. there we our XX, very into and XX, reached trends for or basis yield. this X on And go One two we page was for getting were that point were our Second on interest to we is cash, were basis points company points rates rising

X%. this place for rates So the you XX place United down reversal just inflation dramatically. in and on have interest page high XX, to the the been that years but inflation coming taking shows is go, taking and close many High know treasury then how we rates rates rates, are in world, of very high now parts will tenure don’t the really States,

-- million our Our our Slide presentation us in and there so portfolio you is about $XX investment up. duration XX, XX, very to go basis cash million. -- approximately shows of have years, the goes points, loss XXX by interest in rates bond as page XXX that X.X AGM billion on up little XXX income number is

pre-tax short, it So shows and low higher XXX our duration higher our holdings bonds that going unrealized over because, of interest is cash up the goes on the we’ve rolling they’re a and years. income and and rates investment very losses interest income X.X we’re course, because very short-term you of are you got so the get

we have huge a and a advantage have. as looking competitors, of we that’s find I most think at duration have our as competitors You’ll that don’t low

have for the was high rising -- up. technology years the and growth stocks, have second stocks rates, Finally return now interest value is which on and in been going the to the been last first second many trend, drop

XXXX. well, growth have if changed you very taken crash the up. for trend, dramatically stocks about you’ll and at about has done as value-oriented -- value think, technology dotcom And came the the perhaps, stocks down Well, the in stocks dotcom, So and XX, see that XX stocks, line, Tech from date. red not the look stocks went longest well. XXXX and we is the slide opposite have done now, place years time XXXX in that has relatively to

is way on to its the So bridge value gap.

gone XX%, period good date. XX% they very many, is and saw friend markets to earnings from a collapse see dropped the last going is importantly we’ve week this new this return years to two remember as about the A ago, ago, many dotcom name; of XX% in the as Zoom, Cisco six down I still well sent ones that XX, Netflix -- not the remind don’t that so in got good, be and Apple revenues thing about wise, their its some value, in XX%; Microsoft correct is stocks have fast go price times we’re you seeing ago. Amazon high late never are but stock dropped now. the but time the and down many times, Microsoft stocks stock you the getting the to XX place mine XX% for again, XX%; years. high September XXXX down took XX%. XX%; sideways, dropped Shopify slide XX% dotcom and He -- years the growing and the the said the we XX%, hit, when down down In did not most are months of about are I’d have stocks fang talked crash and this to just down big up since Now, stocks earnings earnings down XX fundamentally -- dropped and were can Netflix and to that it’s me. that remember. parabolic you say a few was said Facebook alphabet Facebook XXXX, Meta, that is in high

in equities XXX%. see can slide XXXX experience down plus, of all from the up XX, were XXXX indices went to you and about XX% Our Fairfax

just to this again. before feel cowardly hands. from out now our just say After have have will them I wanted to And President on value and I be disaster will for attack end, all on at we expect I Ukraine. his Russia, and We week, no Putin ostracized AGM this mentioned prevail, last that Ukraine I doubt a

in or XXX XXXX. about X% consolidated in We have premiums Ukraine our of million

AGM. we than safe While said and I employees are small, people our are keeping our very outstanding three about and fortunate have conditions. our working that concerned as extraordinarily heroes difficult to country it XXXX is very in we Presidents are are under more They at

Clarke, President, So your this for Chief thoughts and Officer, please prayers. Peter? with Operating our keep updates. further them And pass to in Peter call I’ll that,

Peter Clarke

the million of XXX interest result Thank and of share million, net We losses net $XX from book profit adjusted of by value offset X%, of underwriting million of in investments you, Prem. bond dividends. per X% per had XXX XXXX losses of share rates. rising by million, grew primarily portfolio XXX for on the first The earnings XXX strong was value unrealized on quarter our from in our book growth

our business, up quarter the in on were compensation; first XX% of with ratio all exception continued the excellent income rate premiums in more with XX.X%. The workers combined insurance the quarter at million increased that Gross lines operating across our Our increases in of operations first was later. of major from and of casualty increase million XXXX, and profit an the property profit our first XXXX, quarter in by in quarter increased our reinsurance up of underwriting and associates. share to XXX of the XXX driven of

investment the Our first quarter return total in million. of was X.X% a return which XXX investment in resulted

quarter strong for X.X%. at unrealized the return on very losses our investment was Excluding bond portfolio, our from the

next the to years many year. these on with X.X a we duration mentioned, As fixed over portfolio, income reverse our losses Prem of unrealized of expect the

investments, We our hold XX% of and against increasing continue significant to short-term to protect cash interest today, rates. portfolio approximately

net and Commercial Kennedy Waterous, International gains in unrealized equity unrealized quarter, on from Bank. by losses million Our on were on gains XXX primarily equity-related the and Stelco, BlackBerry holdings offset Wilson, and our

return see to value. continue We to a

With carrying March companies in first with annual reinsurance At of at this the not we investments our over book or million previous of $XXX per share held XX fair basis end unrealized share our interest portfolio. a and If rates, would gains increase not XXX would short-dated per in value did value mentioned XXXX. are us point cash value million every XXX mark-to-market, we As consolidated $XX of equity insurance XX, pre-tax income. company’s of additional the basis, XX% include XXX and on investments add the quarters, provide our approximately excess quarter, of and which in investments, representing mark-to-market. in our billion does accounted the being

cash continued and We our bank billion company Fairfax the meet predominantly at X any our cash have is note face. that and holding holding securities, might Please approximately contingency to company, is to short-term line the billion every in X.X and totally undrawn. in

our We are operations. other investments and with support making insurance not this to any than reinsurance cash long-term

to rapidly XXXX. premium all mentioned, previously quarter reinsurance over gross businesses world. billion wrote of grow first We the and As in our insurance continue the X.X of

of produced our The XXX The XX.X combined major or million into companies underwriting account points, well XXX%. produced quarterly X.X was history. from ratio ratio years. largest reserve our below of development development underwriting before and included All combined prior favorable million, profit catastrophe and in an the first favorable reserve profit taking losses quarter quarter combined operating XXX marginal ratios

up XXXX approximately of that premium market from by in in particularly Brit top year. full premium first first the year Our in driven half favorable the Ki, gross XXXX, the premiums on was in continued Brit’s quarter previous and follow first XX% adding growing of million increase margins many the increase Almost quarter X.X markets, gross innovative strong conditions is an in of of billion This and this gross the the of on the prevail had quarter growth for the a XX%, were America. from versus of largest of XXXX. amount XXX XX% quarter syndicate. North growth in

gross up Group’s the Northbridge World quarter Odyssey XXXX. the with in business. XX% was Forster price A&H insurance to double-digit also its continues face pricing business. by XX% books in Brit Zenith quarter in Crum both renewed its business. the increases, timing and premiums is lines second in in increased compensation and of in Excluding and student gross from tech momentum travel from business cyber approximately up that US to as bound reinsurance Allied healthy but register Crum XX% in the continues XXX it it books with Ki, rebound were single-digit of was posted its to of direct reinsurance the in with States, crop XX% XX% as down insurance in continues continuing across to growth business. growth favorable its expansion [Phonetic] World benefit in quarter dollar strong and growth its across strong Canada, & stabilize. the new continued and segment and led of and premiums X%, business. included health although strong of in growth In the first strong see reinsurance Allied retention, first was strong up at to growth the E&S by its terms quarter, continues division in increases with XXXX business its business. at business. of its workers its gross United the market pricing Premium growth impact competitive in continued premium business Their enote most million rate

international as grow Our continued well. operations to

Europe, America, of penetrated Eastern believe strong time, under markets excluding registered Although a increases which international for growth growth economies. XX%, the experience of -- A up South first second quarter. was America, we including up rate Asia’s all from and not results Africa, by the were significant companies the hard half Re. Singapore XX%, and premiums in in seeing XXXX. year. Fairfax Re of in North operations source driven was Over XX% our million our XX local conditions market Asia’s were the premiums consolidated our into in in Singapore strong are South growth Most Central they insurance gross the be and will

level companies is while absolute Our into market may throughout to to rate reduce continue in remain increases grow attractive some overall rate favorable expected XXXX. conditions, lines,

on are companies that great building management Our our start had year the on and XXXX. focused a teams throughout to

profit of result As quarter, a and of versus we underwriting XX% a combined and with previously the a strong XX% first underwriting million posted ratio of ratio mentioned, an in XXX combined year-over-year ratio XXXX. price XX underwriting increases. compounding combined the quarter another of million benefiting profit Northbridge, XXX an with they by in first outstanding quarter Led the of from of had again

steady one results XX% happy and of a to a ratio our results. Crum continued highlight underwriting produced its combined its World XX.X, posting Forster again Group, with all quarterly acquisition, are of have Brit & Odyssey while and of We Allied had ratio best since strong combined decline Zenith

had by a XX% while XX%, with Asia tough of operations of ratio international underwriting had combined Our of a combined Fairfax quarter with posting an ratio Fairfax excellent an the loss Brazil not book; X.X throughout we will The its agriculture of this significantly activities conditions company’s driven reverse in were impacted the million, XXXX. from conflict Ukraine. in effects drought underwriting expect

Our companies very operate difficult in produced while small and in the to a quarter. a profit Ukraine working in continue environment first underwriting remotely

not the aviation, and significantly affected conflict, operations violence, credit, namely marine. reinsurance trade Our to by insurance are political other directly exposed lines the and

million up potential to approximately losses. IBNR have Our companies cover XX

soon, we still will to monitor is but situation closely. are it continue this We the end so conflict ongoing, hopeful

our development conducted combined adjusted XX reviews of For million quarter. X.X favorable XXXX. our the the actuary the ratio. recorded the first to in fourth generally in given companies or quarter, points reserve X.X quarter, have reinsurance on Prior This million thorough compares for insurance not year significantly XX reserves points in and

our Our from premium continues outpacing expenses. ratio benefit earned volume to expense

year-over-year, underwriting insurance our at expense decreasing points reinsurance overall all and ratio expense operations. lower Our is X.X the with underwriting essentially ratio

results, critical underwriting growth their system continued and on Fairfax well and results operating The strong XXXX markets. decentralized success, our the companies pass to opportunities expect with our of positioned I We capitalize local to comment Officer, the and will throughout performance, investment non our to allows very within to is overall to call Allen, Jen now conditions. our Financial react insurance Chief position. our to financial companies’ on us

Jen Allen

Peter. you, Thank

and and results hard the to supporting all wanted quarter of Ukraine families of in are who those the many employees I in during our work others seeking challenging financial these their employees Before to times. first the XXXX, very acknowledge

procedures As completed to quarterly created. uncertainty additional we a has and processes result the of Ukraine, been the conflict that in address

insurance insurance we ensured both exposures we and impacts, in policies and as reinsurance Specifically, if addressed that well had understood known company’s the through our reinsurance have on written. as that may and insurance potential operations and operations, directly located any, Ukraine, those were

in will I’ll determined report that assess of XX the we non the to our potential conflict additional Ukraine future. in impacted had on you refer page Ukraine. on non-insurance not businesses addition, by the the consolidated in operating in the the our have insurance of In were in company’s impact investments it conflict the and subsidiaries. have continue the impact to qX in our may for We interim details. conflict may the company associates quarter potential The XXXX that our results significantly monitor first

the the per growth share of Now Peter value on of book to represented the XXXX, our share in reinsurance looking detailed $XXX.XX, we at company. per common reported that first XXXX. attributed the quarter our on basic net Fairfax of dividend book in basic which in quarter share remarks value already earnings a of first begin consolidated of and XXX XX, first per of shareholders I’ll additional at XXXX so results, million March quarter commentary non-insurance, $XX our provided X%, was paid has companies, adjusted the insurance for with

the the investments by considers from operating of reflected income disclosure significant our fee which million quarter, with XXXX, performance, million from consolidated management impact inflation, of which investment at their provided result of investments X quarter XX, the excess At XXXX, loss in improved additional XXX restaurant share carrying in the is IIFL an and of XX, increased but to the performance compared absence an impact book share, in operating our million Looking XX, as operating in XXXX, compared pre-tax XXXX was regularly a the the value in million income higher or concern XX of portfolio associates XX XX is COVID-XX-related associates non-insurance of fair that improvement by of Fairfax expenses an value [Indiscernible] certain at the the lockdown for MD&A. income to by companies XXX profit segment of in of in to be XX portfolio XXXX. million. to at India’s and and March million significant fees, and Fairfax portion performance reduced and asset adjusted other first at of principally the interim Finance. as impairments if securities. non-insurance of a retail a of of XX reversal with around that in performance value from company was March at CSB million, investments excess you operating exclude the excess the XXXX subsidiaries our we XXXX, XXXX, and over million a being XXXX, million reflected look income of reflected of performance short-term of not primarily to India, With restrictions and reviewed pre-tax December continued our income the XXX That also If per non-insurance at continued investment we hold investment short-dated indicator fixed of cash, higher

During environment had in billion comprised of our years duration X company’s interest make impact first the we that quarter portfolio is billion bonds terms. one in the purchases government XXXX, two on investments $XX.X of the Treasuries, to a to income company of the while of deployed which on short-dated rising March At only principally cash XXXX, treasury remainder from in and to of investments, enabling X.X increased into the and portfolio mainly one low bond which as quarter X.X billion the that the year XXXX, that year limited rate interest our X.X from in of invested had XXXX, US proceeds Canadian to in approximately two XX, in the position used benefit in is first was short-term the billion net bonds. US maturities significantly are of bonds, Treasuries

of earned XXX higher dividend the investments. million corporate of US earned US first a XXXX income our XXXX earned from and to interest has in our changes Our quarter portfolio, million quarter in Principle income sale. stock the from other XXX income first long reflected the preferred composition interest income compared of but was in interest loan of equity bonds net stable dividend bonds, income increased changed. remained and lower mortgage first offset swap as Treasuries, from dividend total our in government and certain positions by return result This the of

As of with us billion two one will and increased term, durations XXXX. bonds had year noted, added I US provide the with X.X income Treasuries which of low interest we in government Canadian to remainder for

XX million in million share share reflected of EXCO a to consolidated profit share that profits of XXXX, of partially our Our XX in of which XX a $XX XXX Atlas from for comprised comprised results associates Eurobank from investments, were and million compared million Resources, by Atlas profit first was quarter million Corp., XX from million the XX Corp. of of of principally and of That XXXX profit of from loss a offset from strong million Eurobank. share of a primarily was of

billion. offset net US million. of million. gains backs bond bonds US bonds, investments US loss XXX equity our unrealized net the net net This were of losses on purchases that comprised exposures they and reserves, referred which on Canadian I on on earlier gains losses our XXX government XXX XXX of of the by Treasuries offset was included and forward on XX of contracts losses the losses included the of Eurolife’s XXX million, the on million bonds to which government XXXX million and net and Treasury first other of to Canadian XXX of net losses was million on of net million, It our quarter The to of our on related of corporate. million is primarily million bonds partially principally Turning by our to in of the partially Greek XX corporate related also X.X bonds, XXX

the low net $XX.X realized net X.X principally equity return swaps, short on cash voting quarter were Fairfax of on continues held are total which The in bonds company above stocks of will conference that net hold the net receipt exposures included and fixed company gains the invested, the our ability unrealized that in common only by In first the investments, prior of the interest investments on investments our XXX the had to and the controlling equity of to Digit the XXXX XX on for duration dated billion those periods. years reversed in of appreciation income partially million in future its to be that maturity, unrealized in shares. quarters, India. swap that in if a million we regulatory we Given recorded calls, to XX% ownership losses our mentioned gains total approvals upon of and return increase on offset equity comprise on subordinate loss

accounted approvals company the financial regulatory closing, its our remain company on to control equity did in the permit a the few quarter the investment In any to conditions obtain gains record in in XXXX position. pending of Digit. on XX% not comments first Digit, Given

position March $X Our holding very remains at billion of liquidity billion was and company and approximately credit fully strong our unsecured the undrawn. with XX, company, our the XXXX in at investments at facility revolving cash the X.X

insurance our cash structure holding supports our As deploy Peter to efficiently decentralized companies. reinsurance company mentioned, capital and company to the enables company’s and our and investments

XX, offset XX.X% at total XX.X at remains XX our to investments March equity, consolidated at billion non-insurance companies, XX, at in was preferred of and to reported the over shareholders’ turn slightly payments now December stable ratio, of December debt-to-total XXXX. Our shareholders common decreased March to finally, XX.X% XXXX reported XXX primarily the million first XX, XX, was compared back the which cap And XXXX, and of million. to and by it I’ll that the XXXX earnings from our are partially billion Fairfax attributed over in excluding XXX Prem. of XXXX, you it that common call just dividends Thank have the net quarter and share reflected the

Prem Watsa

give Jen. We your much, very name, forward company answering all it’s question to you name, one, now us Please try limit and to questions. the your to look Thank to your call. of fair only your so

Okay, Jelena [Phonetic], we questions. the are for ready

Operator

Thank you, with question have Watsa. [Operator Mr. we line from Sir, Tom your Instructions] Capital. MacKinnon BMO a And is open.

Tom MacKinnon

Yeah, thank you. Good morning, Prem.

Prem Watsa

Tom. Hey, good morning,

Tom MacKinnon

with respect -- the Question to

Prem Watsa

louder, Just a little Tom.

Tom MacKinnon

Oh, yeah.

Just a second better you Can Prem? Is here. hear me better? that better? Is this here,

Prem Watsa

Yeah, better. good. Sounds coming it’s

Tom MacKinnon

Okay. $XXX second Question regulatory the a the the you still quarter? close Thanks. to and you -- gain million -- million with to you respect respect get that approvals when this is in are Digit anticipating expected when with $XXX

Prem Watsa

Yeah, passed that? in sometime anything Peter, we’d to soon approved. look Tom, already parliament come as is for and should add the at want it so It soon. you gets that as it

Peter Clarke

hoping comes need expecting Yeah, approval we still no, it and and we’re it just we’re soon. regulatory consolidate to

Tom MacKinnon

Okay.

there anything noted quarter, the this quarter. wasn’t being gain, $XXX press million was that release in prior So, although although potential about noted in the

$XXX So, regulatory Is you’re that upon getting million still gain correct? approvals. the expecting a

Prem Watsa

be comes. that’s again, back looking and Tom, that, time as at but significant, the That at to going was look made we yes. it estimate are we it some Yeah, very we’ll

Tom MacKinnon

going your that the cash or of you in look now great. cash finished more more would that’s then, of putting bonds of position And forward? at deploying in are into some substantial you with Okay, terms bonds, kind

Prem Watsa

seen the went Yeah, up, the up. a rates we have gone so, the business and like rates for for fact went the went today time, interest interest have have years, be XX Tom, ‘XXs, not think risk in that down inflation -- have is long interest you rates up, in people big to how to

So it the said, go. big I know risk rates up, is going going we is high don’t how today, to and as interest

have over, So interest one term presentation. that just -- and to, in his to year what to we what taken in limiting told increase done way significant Brian years. years, one he’s bonds And rolling which in are just place max, as two limiting by we’ve is two one that’s you two our two rates Bradstreet, the it investments or Peter and years it

Tom MacKinnon

If in you rates more would continued at want you would terms see would rise, of what deploying [Multiple what Speakers]? your thinking before look be or to to

Prem Watsa

‘XXs, would XX%. than have Speakers] of you the X%, Yeah, Tom. the have [Multiple rates went good. much if Canadas rates, been It XX have X%, course, been Canadas, been would would X%, XX%, unbelievable XX% good XX%. rates. thought you’d higher good year have to were went an Long that’s what X% in were XX%, to

treasury depression the other side, went the modern the On stayed least history at – of went to X.X%, pandemic in go the treasuries treasuries ‘XXs, the X.X%, bonds they XX-year time. to did never including -- in XX-year history, of they and some for

be careful. just to very, you have very So,

happen and we’re company careful. we very preconceived XX what we’re careful. want last to We’ve very, protected very as to ideas our just going to being be for can have can’t years, years, You XXX

Tom MacKinnon

very much. the appreciate Thanks right, All colors.

Prem Watsa

Tom. you, Thank

Jelena. question, Next

Operator

RBC with Our next question Dwelle is Capital from Mark Markets.

sir. line Your is open,

Prem Watsa

Hi, Mark.

Mark Dwelle

Prem. morning, Good

you Just the rates, of have I now? of the broad rate a just annualized do in look questions Tom past. interest that building run what was that an you’ve dividend of interest estimates asking might on know like kind given similar of kind income in

Prem Watsa

Yeah.

higher, So, number XXX to million lots Peter now, rates normalized as go expect go There’s and and as said, majorities numbers are over higher. roll Mark, interest we right around that expect to go on of Mark, would but that? things change can’t Peter, anything we guarantees it you that, higher. yeah, add so you the no numbers, can and -- to that

Peter Clarke

we monitor No, are continuing look it that’s and our a at current run it today, and to basis. daily we on rate

Prem Watsa

five go or you cash have cash that little points down going very to we’ll in interest I income, our are most people X have four much, in anyone increased the business year have in, bond basis in so less our not giving if else. the to much be because others you have portfolios will cash, a income coming had than main, Mark, and but most and had guess, very they to little are So, and cash duration, the companies investment -- able going main, was and you have some

Mark Dwelle

Definitely.

you’ve job work. You been XX% great I’m did sure X% protecting as in your my guys book sheet small there’s value, competitors there, impacts seen, their a the and to of so catastrophe have balance some seen of

Prem Watsa

[Indiscernible].

Mark Dwelle

but of question the elaborate other unit I it had noticed on One it any I that? I million the capital was there guess for a capital was look like segment. off that’s you curious time. inflow a was is, It injection particular interim if been large into report, long stable And a could very losses of amount run $XXX in for didn’t fair

Prem Watsa

we it just to safe, Mark. Yeah, want keep

You as have said coming you that in unexpected in, but -- exposures type report, are know. don’t these add Peter, unexpected to we annual all that? runoff would of I our

Peter Clarke

it related Yeah, million, specifically I on think, the last XXX really to year’s results.

the just in it putting first quarter, but XXXX. were we actually related the to capital So,

Mark Dwelle

thank Understood, you.

Very my all quarter. think I clean that’s questions. Thanks.

Prem Watsa

Hey, Jelena, please. thank Mark. you very much, next question,

Operator

Our from next question comes [Indiscernible].

open, is sir. line Your

Unidentified Participant

Jen. Hi, Prem. Hi,

Prem Watsa

Good Howard. Hi. morning,

Unidentified Participant

in minor derivatives from question, interest Hi. expense some your had? come A did you drop

Prem Watsa

you Howard? to expense, we to add want it But No, break Interest down. that, Peter?

Peter Clarke

not that we so option year number. drop we bonds, had some there. -- This bought the that’s I in fees back was last year some early in reading think

Prem Watsa

Jen, add? anything to

Jen Allen

in the compared Yeah, if XX in can to I XXXX refer Howard, interest you we report, give components ‘XX. page in to maybe expense the interim

yield much coming issued you XX million, adjust loss compared last we normalized the holding that, bonds through indicated, with to that so years, XX the you was prior benefit million. on of XXX Peter the including million and for non-insurance, in But about a can the it see pretty So you’re redemption the on company companies, I’ve lower year. some year-over-year as insurance got that when

Unidentified Participant

Okay, thanks, guys.

Prem Watsa

Jelena, please. you, question Thank Howard. next

Operator

Bank Jaeme Our Instructions] question [Operator with Gloyn National comes Financial. from

line Your open. is

Jaeme Gloyn

morning. Good Yeah.

Prem Watsa

Jaeme. Good morning,

Jaeme Gloyn

question get today, one Only to little more flat lines. reserve quarter just the bit coming color most wanted of a on this pretty flat in business across and the development

relative color quarter So seeing prior less a development little what perhaps this reserve drive we’re there to to to bit more as years?

Prem Watsa

XX, for when the huge the to Peter expand make this But after six, market, ask want to just I we we had found Jaeme, in will was reserves point a next years, September to seven redundancies. here, XXXX that. add what you I and

same. the expecting We’re

redundancy XX% the significantly Because in we’re year, quarter, underwriting at that end Now hard how the these reserve don’t for reserves. redundancies look very so that last year the didn’t very so but in have grown profit pricing, been XX% first we’ve market, think will in in we -- once review long, we’ve past. focus. it and we’ll time; because XXXX, we some this our that’s of show year we But a said, at a been ask because rate experience Peter significant, significant any expanding, increases our the the the had me we’re the

We’re because expanding take that. risk, as simple we’re to the getting paid as

redundant. I over And will know that. be don’t you to so if we reserves anything to Jaeme, think, Peter, time, add want that

Peter Clarke

don’t typically we the in business. usually question your adverse specifically companies reviews I the think adjustments in developments we then. and do make tail some some unless just maybe see, current the we in on quarter, there’s too quarter, short fourth actuarial thorough we on for lines react of first our that quarter, And much all

as first movement won’t in see quarter, much quarters, unusual so as So there. why you other the that’s nothing generally the

Prem Watsa

when XX And the know, our annual report and have we after years Jaeme, development, you result expect redundancies continue was after do that. had to at significant that to year year them reserve companies see and year, you our look

Jaeme Gloyn

the Yeah, that’s for question. the basis great. Okay,

sounds is normal. I it off like just this all wanted relative to or there’s confirm otherwise guard In still nothing like that caught Thank fact, so prior inflationary you. you quarter, to year,

Prem Watsa

Jamie. question. you, next Thank Jelena,

Operator

with comes Our question Hunter next CIBC. from Payson

sir. open, Your is line

Prem Watsa

Good morning, Payson.

Payson Hunter

morning. have investment you. total your to as are policy of the use swaps. return inquiring what I Thank towards a parameters general Good question just

Peter Clarke

swaps, we on total we return to policy swaps return use do said for PRS return [Indiscernible] our or to total the past replicate but use positions we’re long some that. going no have total use longer On in swap, that

Prem Watsa

Yeah.

keep shorts, stocks, two them one for return of intend to use not index So, or the the we for more or swaps, then individual them. total but no and have and we just

Payson Hunter

any investment quantity percentage the limitations total there as Are your of portfolio in a

Prem Watsa

Peter?

Peter Clarke

we notional to that, at limited we amount our take. we of on take when and amount look equity swaps exposure can how that exposure, so capital it’s return add look total that’s we equity that charges the our total and The at exposure to the we

Payson Hunter

much. very you Thank

Prem Watsa

Payson. much, Jelena, very next you Thank question.

Operator

Our next Returns. from Bobman Ron comes question with Capital

Your open, line is sir.

Ron Bobman

quarter. another on very congrats fine very, and thanks Hi,

Prem Watsa

Ron. morning, Good

Ron Bobman

sort of Hi. had related I price stock a question. Prem,

or long enjoyed have that performing and was your good I’m are think very attribute shareholders what of performance, and are? the on what small AGM, haul of do has underwriting tool what assets I from changing pieces sort think sort comment own have companies of We’re late, despite elements some are the that of guess, you are thrust Fairfax great at over you other returned and Thanks. the enjoying and so respects that, the shareholders comment inside that the situation? pull really stock well -- to you AGM. very, portfolio focused primary wondering, the that, What not comments then, further. And of improving of at some that selling extraordinary And price, the environment, far, the levers of suppressing make And the the buybacks up some tools lead about improving think, the even been Fairfax? even the remedy in of that can you with do you’re returns your I your when stock items

Prem Watsa

Sure.

very So, good Ron, a that’s question.

years stock know, point never and these our XXX%. you that? at up you would of has back it so look if gone are do report, that never many that XX the annual time You right, we can know tell. a Did In I made price, markets, No. go

and guidance that, What that, earnings we game do don’t goes give can we our down. up we the price, that. and -- don’t or of play whether never we of So, do don’t all we done can’t quarterly and it stock predict

one and question single we comes -- we that have anywhere. so promotional, AGM, AGM every we’re you from know, not as And and that answer at

long we’re around turn so doesn’t, stock. our buy term, oriented value a and always back over stock it we and promoting when take not the But our underlying towards reflects And the stock.

million the has taken it the we possibility and is better in at So shares The shareholder we our individual each of us bought terms number the and for XXXX more to end who long the stock, one buy remaining of term continuing buy. that’s view. X who’s for

wish stock how the a I’m very you and know to will Ron, so and will large and I I knew, very react shareholder, when answer Now, be I’m interested me that, it if let going the know react, to Ron, in that,

Ron Bobman

Operationally, some just again, there’s Okay, too, been Thanks luck. continues. wondering if very, great levers. best it’s capital and it good management more of happy, well, Hope very thanks. everything’s but and

Prem Watsa

in to Thank continue comments, you. the Ron’s of Thank we and -- one the to in got reason nothing I’m of have world world, operations. because in Canada, AGM, world you, Ron. terms not not States, with best the in me, United is And the it’s of just and do insurance the the companies and the talking this that, one got the question we’ve decentralized in best at said I’ve

below is team, XX teams we’ve whole and years, our think I for company. plus us with companies management holding who’ve got and in total, experience a consistent small consistent XX very them been change, management no

in so of we X XX them And and business company of about ours, six. premium; did also run year, biggest only a is the have that out billion we these fine last of XX the presidents the

management takes that them. a to takes which excellent and right which at it our ahead I centralized experience if wonderful is come can a our and And the AGM, a time easier huge are are us people competitors, for because to is at it culture behind got got you we’ve all, to culture. a develop as you time So reacting said Fairfax, We’ve teams AGM. to long find large -- it’s tough more much our opposed grow as of they to it plus, the opportunity

Next Jelena. question,

Operator

a Mudaliar Edward Jones. Ashwin have We question Instructions] from with [Operator

is line sir. open, Your

Ashwin Mudaliar

you Thank to the from to foresee Hi, now, about subs support Do growth? from back from contributions holdco if any capital do the And bring market I the how to withdrawing soft additional think conversely, subs and insurance guess Prem. it insurance just holdco? insurance years you. arises you

Prem Watsa

are very really Yeah, capitalized, financed, so our well all well of companies all them.

money year, last today, our said but see They don’t We are very we going they’re annual any in all put more to in. have as expanding money well capitalized, significantly. we report,

saw Our earnings -- as underwriting XX% it’s combined ratio. an you profit,

of be a premium dollars. it’s thinking will profit dollars; We about than it’s a of underwriting And plus Peter, of billion billion. course, a than less $XX writing, if it’s and XX%, X% net it’s I’m even if written X billion XX%, billion more

very is up closed rough asset on is remember, then knows which on basis. income, go who -- tear. at we interest move And Thomas by went rates business saying, we’ve coming value, at earnings as restaurant Cook, investment like trading as will our quarter a a was net book have $XX, business, in Jen million, really the results what upwards, good value happen, quarterly should to profit So continue we’ve quarter, focused AGM, forward. got underwriting our India’s in a said travel, huge pandemic; which which the India, at travel running through all is we XXX time; Fairfax our a And $XX.X never

Atlas our Eurobank, interested opportunity are Ben of managers managed you’ve the talked by runs And companies Chang -- have that in David of we hopefully a there. about lot fabulously So then at we huge our and Sokol opportunity. got AGM, tremendous [Phonetic],

and we go well. see So, on not you’ll going and on, extremely and could income have in, that do value interest only you on, stocks

So you of together. all that put

but, We’re think is question? quite opportunity. all excited to to a any about problem don’t We the add capital at Peter, comment his

Peter Clarke

think I No, answered it. you

think the capital quarter, growth. And got example, We -- to will underwriting companies and You’ve answer. able I the company’s the be increased income, any additional dividend fund think insurance through for right returned profit, the first in Jen, strong through interest that

Jen Allen

About XXX that’s million, correct.

flowing So there both ways. is capital

first it’s runoff As with down the gives capital put into the Prem to on company in the us at but example holding about flexibility It XXX with back noted have also that companies, holdco needed up of and X.X access the did dividends structure, up XXXX. decentralized the capital the billion. that quarter, it’s to in take million quarter companies in the those the through come

Ashwin Mudaliar

you Thank very much.

Prem Watsa

Thank you very much.

that question, questions Jel, you any have? Ashwin. And any more

Operator

questions this time. no No, at we further Mr. Watsa, have

Prem Watsa

joining for thank coordinating thank much very then are this there Jel. question, you call for on further us Thank if you you. no and Well, it,

Operator

We thank very participating. today’s does conclude you welcome. You’re all call. This conference for

a disconnect day. have may of now rest great and You your

Fairfax Financial Holdings Limited (FRFHF) 29 Apr 222022 Q1 Earnings call transcript