Fairfax Financial Holdings Limited: Financial Results for the Third Quarter

Core Insights - Fairfax Financial Holdings Limited reported net earnings of $1,151.7 million ($52.04 per diluted share) for Q3 2025, an increase from $1,030.8 million ($42.62 per diluted share) in Q3 2024, reflecting strong performance in property and casualty insurance and reinsurance operations [1][2][8] - The company's book value per basic share rose to $1,203.65 as of September 30, 2025, up 15.1% from $1,059.60 at the end of 2024, adjusted for dividends [1][8] Financial Performance - Adjusted operating income from property and casualty insurance and reinsurance operations was $1,343.2 million, with a consolidated combined ratio of 92.0% and an undiscounted underwriting profit of $540.3 million [2][10] - Gross premiums written for Q3 2025 were $8,262.8 million, slightly down from $8,302.2 million in Q3 2024, while net premiums written increased to $6,623.8 million from $6,485.0 million [5][10] - Net gains on investments totaled $426.2 million, primarily from common stocks, which generated net gains of $524.6 million [3][11] Strategic Transactions - The company announced the sale of its 80% interest in Eurolife's life insurance operations to Eurobank for approximately $940 million, while acquiring a 45% equity interest in Eurobank's Cyprus-based property and casualty insurance company for about $68 million [4][20] - The transactions are expected to close in Q1 2026 and will allow the company to focus on property and casualty insurance while benefiting from the success of Eurolife [4][20] Investment and Portfolio Management - As of September 30, 2025, the company's portfolio investments totaled $70.9 billion, with $11.8 billion in cash and short-term investments and $32.7 billion in government and high-quality corporate bonds [10][16] - The total debt to total capital ratio, excluding non-insurance companies, increased to 26.5% from 24.8% at the end of 2024, primarily due to the issuance of unsecured senior notes [16][21] Shareholder Returns - The company redeemed all Series G and Series H preferred shares for $179.7 million, and has been actively repurchasing subordinate voting shares [16][20] - The total common shareholders' equity increased to $25.67 billion as of September 30, 2025, compared to $22.96 billion at the end of 2024 [21][24]