Financial Results for the Year Ended December 31, 2020

(Word: All greenback quantities on this information launch are expressed in U.S. {dollars} besides as in any other case famous. The monetary outcomes are derived from monetary statements ready utilizing the popularity and measurement necessities of Worldwide Monetary Reporting Requirements as issued by the Worldwide Accounting Requirements Board besides as in any other case famous, and are unaudited.)

TORONTO, Feb. 11, 2021 (GLOBE NEWSWIRE) — Fairfax Monetary Holdings Restricted (TSX: FFH and FFH.U) proclaims fiscal 12 months 2020 web earnings of $218.4 million ($6.29 web earnings per diluted share after cost of most well-liked share dividends) in comparison with fiscal 12 months 2019 web earnings of $2,004.1 million ($69.79 web earnings per diluted share after cost of most well-liked share dividends). Ebook worth per fundamental share at December 31, 2020 was $478.33 in comparison with $486.10 at December 31, 2019 (a rise of 0.6% adjusted for the $10 per frequent share dividend paid within the first quarter of 2020).

“In 2020 all of our insurance coverage and reinsurance corporations besides Brit achieved a mixed ratio beneath 100%. Our consolidated mixed ratio of 97.8% in 2020 included disaster losses of $644.3 million or 4.7 mixed ratio factors and COVID-19 losses of $668.7 million or 4.8 mixed ratio factors. Core underwriting efficiency continued to be very robust with a mixed ratio excluding COVID-19 losses of 93.0%, continued beneficial reserve growth and progress in gross premiums written of 12.5%, leading to working revenue of $915.8 million regardless of the disaster and COVID-19 losses.

“Our web losses on investments of roughly $1.5 billion at March 31, 2020 reversed over the rest of the 12 months and we completed 2020 with web beneficial properties of $313.1 million. We proceed to concentrate on being soundly financed and ended the 12 months with roughly $1.3 billion in money and investments within the holding firm. We count on that by finish of the primary quarter, with the closing of the RiverStone Barbados transaction described beneath, we may have in extra of $1.0 billion of money and investments within the holding firm, with our credit score facility totally paid off.

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“All through a lot of final 12 months, I made public statements to the impact that our perception was that Fairfax shares had been buying and selling out there at a ridiculously low-cost worth. Following our worth investing philosophy, because the latter a part of 2020 we’ve bought complete return swaps with respect to 1,407,864 subordinate voting shares of Fairfax with a complete market worth on the time of these agreements of $484.9 million ($344.45 (Cdn$443.93) per share),” mentioned Prem Watsa, Chairman and Chief Government Officer.

The desk beneath presents the sources of the corporate’s web earnings in a phase reporting format which the corporate has persistently used because it believes it assists in understanding Fairfax:

Highlights for fiscal 12 months 2020 (with comparisons to fiscal 12 months 2019 besides as in any other case famous) embody the next:

• The consolidated mixed ratio of the insurance coverage and reinsurance operations was 97.8%, producing an underwriting revenue of $309.0 million regardless of COVID-19 losses of $668.7 million (primarily at Brit, Odyssey Group and Allied World, and representing 4.8 mixed ratio factors) and disaster losses of $644.3 million (representing 4.7 mixed ratio factors), in comparison with a mixed ratio of 96.9% and an underwriting revenue of $394.5 million in 2019. The insurance coverage and reinsurance operations continued to expertise web beneficial prior 12 months reserve growth, with a good thing about $454.9 million or 3.3 mixed ratio factors.

• Internet premiums written by the insurance coverage and reinsurance operations elevated by 11.0% to $14,717.7 million from $13,261.1 million, whereas gross premiums written elevated by 12.5%.

• Float of the insurance coverage and reinsurance operations elevated by 10.1% to $22,705.0 million at December 31, 2020 from $20,631.1 million at December 31, 2019.

• Working revenue of the insurance coverage and reinsurance operations decreased to $915.8 million from $1,107.5 million, principally reflecting decrease underwriting revenue, primarily on account of COVID-19 losses of $668.7 million and better disaster losses, and decrease curiosity and dividends.

• COVID-19 losses of the insurance coverage and reinsurance operations of $668.7 million derived primarily from coverages associated to enterprise interruption (roughly 35%, principally from worldwide enterprise) and occasion cancellation (roughly 34%). Incurred however not reported losses comprised roughly 51% of complete COVID-19 losses.

• Working losses of the non-insurance corporations of $178.7 million was primarily comprised of losses, considerably COVID-19 associated, from the Eating places and retail phase of $69.5 million, losses from Thomas Prepare dinner India of $66.5 million and losses from the Different phase of $53.7 million (principally losses of $110.1 million at Fairfax Africa, partially offset by revenue at Dexterra Group and AGT).

• Consolidated curiosity and dividends of $769.2 million decreased from $880.2 million, primarily reflecting decrease curiosity revenue earned, principally on U.S. treasury bonds and money and quick time period investments, partially offset by increased curiosity revenue earned on prime quality U.S. company bonds.

• Consolidated share of lack of associates of $112.8 million principally mirrored impairment losses of $240.3 million (principally associated to investments in Quess, Resolute, Atlas Mara and Astarta) and share of lack of Sanmar of $48.6 million and Bangalore Airport of $30.5 million, partially offset by share of revenue of Atlas Corp. of $116.4 million and RiverStone Barbados of $113.0 million.

• Curiosity expense of $475.9 million (inclusive of $62.8 million on accretion of lease liabilities) was primarily comprised of $286.3 million incurred on borrowings by the holding firm and the insurance coverage and reinsurance corporations and $126.8 million incurred on borrowings by the non-insurance corporations (that are non-recourse to the holding firm).

• At December 31, 2020 the corporate’s insurance coverage and reinsurance corporations held roughly $16.1 billion in money and short-dated investments representing roughly 38.3% of portfolio investments (web of by-product obligations), comprised of $13.2 billion of subsidiary money and short-term investments and $2.9 billion of short-dated U.S. treasuries.

• Internet beneficial properties on investments of $313.1 million ($1,235.8 million within the fourth quarter) consisted of the next:

• Internet beneficial properties on bonds of $562.2 million principally mirrored unrealized appreciation of top quality company bonds. Internet losses on quick fairness exposures of $528.6 million resulted from closing out the corporate’s remaining quick fairness complete return swaps. Internet losses on Different of $92.4 million primarily mirrored the corporate’s funding in U.S. treasury bond ahead contracts.

• At March 31, 2020 the corporate had drawn $1,770.0 million on its credit score facility as added liquidity help for its insurance coverage and reinsurance corporations ought to or not it’s wanted on account of the results of the COVID-19 pandemic. The corporate subsequently repaid $1,070.0 million, leaving $700.0 million excellent at December 31, 2020. The corporate expects that by the top of the primary quarter, with the closing of the RiverStone Barbados transaction, it is going to have in extra of $1.0 billion of money and investments within the holding firm, with its credit score facility totally paid off.

• Throughout 2020, the corporate supplied $1,381.4 million of money and marketable securities in capital help to its subsidiaries, all to its insurance coverage and reinsurance corporations to help progress in a beneficial pricing atmosphere and to help fluctuations of their funding portfolios from the financial results of the COVID-19 pandemic.

• On December 8, 2020, Fairfax Africa accomplished its transaction with Helios Holdings Restricted and was renamed Helios Fairfax Companions (“HFP”). The corporate deconsolidated Fairfax Africa and commenced accounting for its curiosity in HFP as an funding in affiliate, leading to a lack of $61.5 million that included recycled international forex translation losses of $26.9 million and a partial reversal of the preliminary impairment lack of $164.0 million recorded within the third quarter of 2020 because of a rise out there traded share worth of Fairfax Africa between then and shutting.

• On December 2, 2020 the corporate entered into an settlement with CVC Capital Companions (“CVC”) whereby CVC will purchase 100% of RiverStone Barbados Restricted (“RiverStone Barbados”). OMERS, the pension plan for Ontario’s municipal workers, will promote its 40% three way partnership curiosity in RiverStone Barbados as a part of the transaction. On closing the holding firm expects to obtain consideration of roughly $730 million for its 60% three way partnership curiosity in RiverStone Barbados and a contingent worth instrument for potential future consideration of as much as $235.7 million. Closing of the transaction is topic to numerous regulatory approvals and is predicted to happen within the first quarter of 2021. Pursuant to the settlement with CVC, previous to closing the corporate entered into an association with RiverStone Barbados to buy (until bought earlier) sure investments owned by RiverStone Barbados at a hard and fast worth of roughly $1.2 billion previous to the top of 2022.

• On February 10, 2021 the corporate entered into an settlement pursuant to which OMERS will purchase an approximate 14% curiosity in Brit for money proceeds of roughly $375 million. The transaction is topic to customary closing situations, together with regulatory approvals, and is predicted to shut within the second quarter of 2021. After closing, the corporate will retain the pliability to repurchase OMERS’ curiosity in Brit over time.

• On November 12, 2020 the corporate and Allied World entered into an settlement to promote its majority possession curiosity in Vault Insurance coverage, with Allied World to retain a ten% stake in Vault following the sale. Scott Carmilani was instrumental in creating and rising Vault and has pivoted from his function with Fairfax to Chairman of the Board of Vault. We’re very grateful to Scott for all of his contributions to Fairfax, particularly at Allied World, an organization which he led from being a start-up to turning into an business main and extremely profitable worldwide insurance coverage and reinsurance enterprise. Closing of the transaction is topic to numerous regulatory approvals and is predicted to happen within the first quarter of 2021.

• The corporate held $1,252.2 million of money and investments on the holding firm stage ($1,229.4 million web of by-product obligations) at December 31, 2020, in comparison with $975.5 million at December 31, 2019.

• The corporate’s complete debt to complete capital ratio, excluding non-insurance corporations, elevated to 29.7% at December 31, 2020 from 24.5% at December 31, 2019, primarily reflecting the $700.0 million drawn on the credit score facility and the issuance of $650.0 million principal quantity of 4.625% unsecured senior notes due April 29, 2030.

• Throughout 2020 the corporate bought 457,603 subordinate voting shares for treasury and 343,871 for cancellation at an combination price of $238.8 million. From the fourth quarter of 2017 as much as December 31, 2020, the corporate has bought 1,121,085 subordinate voting shares for treasury and 965,075 subordinate voting shares for cancellation at an combination price of $874.9 million.

• At December 31, 2020, frequent shareholders’ fairness was $12,521.1 million, or $478.33 per fundamental share, in comparison with $13,042.6 million, or $486.10 per fundamental share, at December 31, 2019. The lower in frequent shareholders’ fairness per fundamental share was primarily as a result of cost within the first quarter of the annual frequent share dividend of $275.7 million and unrealized international forex translation losses, partially offset by web earnings attributable to shareholders of Fairfax of $218.4 million.

There have been 26.4 million and 26.9 million weighted common frequent shares successfully excellent throughout 2020 and 2019 respectively. At December 31, 2020 there have been 26,176,506 frequent shares successfully excellent.

Unaudited consolidated steadiness sheet, earnings and complete revenue data, along with segmented premium, mixed ratio, prior 12 months reserve growth and disaster and COVID-19 loss data, comply with and kind a part of this information launch.

In presenting the corporate’s outcomes on this information launch, administration has included working revenue (loss), mixed ratio, float and guide worth per fundamental share measures. Working revenue (loss) is used within the firm’s phase reporting. The mixed ratio is calculated by the corporate because the sum of claims losses, loss adjustment bills, commissions, premium acquisition prices and different underwriting bills, expressed as a share of web premiums earned. Float is calculated by the corporate because the sum of insurance coverage contract liabilities and insurance coverage contract payables, much less the sum of insurance coverage contract receivables, recoverable from reinsurers and deferred premium acquisition prices. Ebook worth per fundamental share is calculated by the corporate as frequent shareholders’ fairness divided by the variety of frequent shares successfully excellent.

As beforehand introduced, Fairfax will maintain a convention name to debate its 2020 year-end outcomes at 8:30 a.m. Japanese time on Friday February 12, 2021. The decision, consisting of a presentation by the corporate adopted by a query interval, could also be accessed at 1 (888) 390-0867 (Canada or U.S.) or 1 (212) 547-0141 (Worldwide) with the passcode “FAIRFAX”. A replay of the decision might be out there from shortly after the termination of the decision till 5:00 p.m. Japanese time on Friday, February 26, 2021. The replay could also be accessed at 1 (800) 759-4964 (Canada or U.S.) or 1 (203) 369-3596 (Worldwide).

Fairfax Monetary Holdings Restricted is a holding firm which, by its subsidiaries, is engaged in property and casualty insurance coverage and reinsurance and the related funding administration.

Sure statements contained herein could represent forward-looking statements and are made pursuant to the “secure harbour” provisions of the USA Personal Securities Litigation Reform Act of 1995. Such forward-looking statements are topic to recognized and unknown dangers, uncertainties and different components which can trigger the precise outcomes, efficiency or achievements of Fairfax to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by such forward-looking statements. Such components embody, however are usually not restricted to: a discount in web earnings if our loss reserves are inadequate; underwriting losses on the dangers we insure which are increased or decrease than anticipated; the prevalence of catastrophic occasions with a frequency or severity exceeding our estimates; modifications in market variables, together with rates of interest, international trade charges, fairness costs and credit score spreads, which may negatively have an effect on our funding portfolio; dangers related to the worldwide pandemic brought on by COVID-19, and the associated international discount in commerce and substantial downturns in inventory markets worldwide; the cycles of the insurance coverage market and normal financial situations, which may considerably affect our and our opponents’ premium charges and capability to jot down new enterprise; inadequate reserves for asbestos, environmental and different latent claims; publicity to credit score threat within the occasion our reinsurers fail to make funds to us underneath our reinsurance preparations; publicity to credit score threat within the occasion our insureds, insurance coverage producers or reinsurance intermediaries fail to remit premiums which are owed to us or failure by our insureds to reimburse us for deductibles which are paid by us on their behalf; our lack of ability to keep up our long run debt rankings, the shortcoming of our subsidiaries to keep up monetary or claims paying potential rankings and the affect of a downgrade of such rankings on by-product transactions that we or our subsidiaries have entered into; dangers related to implementing our enterprise methods; the timing of claims funds being sooner or the receipt of reinsurance recoverables being later than anticipated by us; dangers related to any use we could make of by-product devices; the failure of any hedging strategies we could make use of to realize their desired threat administration goal; a lower within the stage of demand for insurance coverage or reinsurance merchandise, or elevated competitors within the insurance coverage business; the affect of rising declare and protection points or the failure of any of the loss limitation strategies we make use of; our lack of ability to entry money of our subsidiaries; our lack of ability to acquire required ranges of capital on beneficial phrases, if in any respect; the lack of key workers; our lack of ability to acquire reinsurance protection in enough quantities, at cheap costs or on phrases that adequately shield us; the passage of laws subjecting our companies to extra hostile necessities, supervision or regulation, together with extra tax regulation, in the USA, Canada or different jurisdictions through which we function; dangers related to authorities investigations of, and litigation and unfavourable publicity associated to, insurance coverage business observe or another conduct; dangers related to political and different developments in international jurisdictions through which we function; dangers related to authorized or regulatory proceedings or vital litigation; failures or safety breaches of our laptop and information processing methods; the affect exercisable by our vital shareholder; hostile fluctuations in international forex trade charges; our dependence on unbiased brokers over whom we train little management; impairment of the carrying worth of our goodwill, indefinite-lived intangible belongings or investments in associates; our failure to comprehend deferred revenue tax belongings; technological or different change which adversely impacts demand, or the premiums payable, for the insurance coverage coverages we provide; disruptions of our data expertise methods; assessments and shared market mechanisms which can adversely have an effect on our insurance coverage subsidiaries; and hostile penalties to our enterprise, our investments and our personnel ensuing from or associated to the COVID-19 pandemic. Further dangers and uncertainties are described in our most just lately issued Annual Report which is offered at www.fairfax.ca and in our Base Shelf Prospectus (underneath “Danger Elements”) filed with the securities regulatory authorities in Canada, which is offered on SEDAR at www.sedar.com. Fairfax disclaims any intention or obligation to replace or revise any forward-looking statements, whether or not on account of new data, future occasions or in any other case, besides as required by relevant securities legislation.

Data on
CONSOLIDATED BALANCE SHEETS
as at December 31, 2020 and December 31, 2019
(unaudited – US$ thousands and thousands)

Data on
CONSOLIDATED STATEMENTS OF EARNINGS
for the fourth quarters and years ended December 31, 2020 and 2019
(unaudited – US$ thousands and thousands besides per share quantities)

Data on
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the fourth quarters and years ended December 31, 2020 and 2019
(unaudited – US$ thousands and thousands)

SEGMENTED INFORMATION
(unaudited – US$ thousands and thousands)

Gross premiums written, web premiums written and mixed ratios for the insurance coverage and reinsurance operations (excluding Run-off) within the fourth quarters and full years ended December 31, 2020 and 2019 had been as follows:

Gross Premiums Written

Internet Premiums Written

Mixed Ratios

Prior 12 months reserve growth and present interval disaster and COVID-19 losses of the insurance coverage and reinsurance operations (excluding Run-off) within the fourth quarters and full years ended December 31, 2020 and 2019 had been as follows:

Internet (Beneficial) Opposed Prior 12 months Reserve Improvement

Present Interval Disaster and COVID-19 Losses

___________

(1) Internet of reinstatement premiums.
(2) Expressed in mixed ratio factors.