Strong underwriting drives Fairfax Q3’25 net earnings, CoR improves to 92.0%

Core Insights - Fairfax Financial Holdings Limited reported net earnings of $1,151.7 million for Q3 2025, an increase from $1,030.8 million in the same period last year [1] - The increase in net earnings is attributed to higher adjusted operating income from property and casualty insurance and reinsurance operations, driven by strong core underwriting performance, increased interest and dividend income, and favorable results from profit of associates [2] Financial Performance - Gross premiums written (GPW) slightly decreased to $8,262.8 million from $8,302.2 million in Q3 2024, reflecting growth in new business across reinsurance and casualty lines and modest rate increases in key segments [3] - Property and casualty insurance and reinsurance GPW was $8,179.8 million in Q3 2025, down from $8,237.9 million in the same period last year [3] - Net premiums written increased by 2.1% to $6,555.5 million from $6,420.4 million, primarily due to increased retentions in US casualty lines [4] Underwriting and Profitability - Underwriting profit for property and casualty insurance and reinsurance operations rose to $540.3 million from $389.7 million in 2024, with an improved undiscounted combined ratio of 92.0%, down from 93.9% [5] - Key factors for positive results included decreased catastrophe losses of $150.0 million compared to $434.5 million in 2024 and growth in business volumes, despite a modest decrease in net favorable prior year reserve development [6] Adjusted Operating Income - Adjusted operating income for property and casualty insurance and reinsurance operations increased to $1,343.2 million from $1,136.8 million, reflecting stronger underwriting performance and increased interest and dividends [7] Investment Gains - Net gains on investments for the quarter were $426.2 million, primarily from net gains on common stocks of $524.6 million, with expectations for long-term performance despite quarterly fluctuations [8] Strategic Transactions - The company announced the sale of its 80.0% interest in Eurolife's life insurance operations to Eurobank for approximately $940 million and will acquire a 45.0% equity interest in Eurobank's Cyprus-based property and casualty insurance company for approximately $68 million [9] - This strategy allows the company to maintain focus on property and casualty insurance and reinsurance while benefiting from the success of the Eurolife life insurance business through its stake in Eurobank [10]