(Note: All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from unaudited interim consolidated financial statements for the three and nine months ended September 30, 2024 prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") applicable to the preparation of interim financial statements, including International Accounting Standard 34 Interim Financial Reporting. This news release contains certain non-GAAP and other financial measures, including underwriting profit (loss), adjusted operating income (loss), combined ratio (both discounted and undiscounted), book value per basic share, total debt to total capital ratio excluding non-insurance companies and excess (deficiency) of fair value over carrying value, that do not have a prescribed meaning under IFRS Accounting Standards and may not be comparable to similar financial measures presented by other issuers. See "Glossary of non-GAAP and other financial measures" at the end of this news release and in the company's Interim Report for the three and nine months ended September 30, 2024 for further details.)

TORONTO, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) announces net earnings of $1,030.8 million ($42.62 net earnings per diluted share after payment of preferred share dividends) in the third quarter of 2024, primarily reflecting increased adjusted operating income of $1,136.8 million and net gains on investments. Book value per basic share at September 30, 2024 was $1,033.18 compared to $939.65 at December 31, 2023 (an increase of 11.7% adjusted for the $15 per common share dividend paid in the first quarter of 2024).

"In the third quarter of 2024 our property and casualty insurance and reinsurance operations produced adjusted operating income of $1,136.8 million up from $967.2 million in the third quarter of 2023 (or operating income of $1,516.3 million (2023 - $1,424.4 million) including the benefit of discounting, net of a risk adjustment on claims), primarily reflecting continued strong core underwriting performance and increased interest and dividends. Our underwriting performance in the third quarter of 2024 was outstanding, with our property and casualty insurance and reinsurance companies reporting a consolidated combined ratio of 93.9% and consolidated underwriting profit of $389.7 million, on an undiscounted basis, despite higher current period catastrophe losses of $434.5 million. Gross and net premiums written grew by 13.9% and 10.0%, reflecting the acquisition of Gulf Insurance, which added $778.4 million in gross premiums written and $420.5 million in net premiums written. Excluding Gulf Insurance, gross and net premiums written grew by 3.2% and 2.8%.

"Net gains on investments of $1,287.3 million in the quarter was principally comprised of mark to market gains on bonds of $828.6 million and mark to market gains on common stocks of $322.9 million.

"We remain focused on being soundly financed and ended the quarter with approximately $2.0 billion of cash and marketable securities and an additional $2.1 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company," said Prem Watsa, Chairman and Chief Executive Officer.

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The table below presents the sources of the company's net earnings in a segment reporting format which the company has consistently used as it believes it assists in understanding Fairfax:

 Third quarter First nine months
 2024  2023  2024  2023 
 ($ millions)
Gross premiums written8,302.2  7,272.2  25,276.7  22,453.2 
Net premiums written6,485.0  5,879.1  19,684.4  17,742.1 
Net insurance revenue6,503.6  5,724.5  18,537.1  16,276.5 
        
Sources of net earnings       
Operating income - Property and Casualty Insurance and Reinsurance:       
Insurance service result:       
North American Insurers216.2  186.4  799.9  711.4 
Global Insurers and Reinsurers698.2  667.6  2,011.3  2,113.3 
International Insurers and Reinsurers125.5  78.6  319.5  229.9 
Insurance service result1,039.9  932.6  3,130.7  3,054.6 
Other insurance operating expenses(270.7) (183.8) (746.0) (575.3)
Interest and dividends544.2  453.7  1,591.8  1,172.6 
Share of profit of associates202.9  221.9  508.4  608.2 
Operating income - Property and Casualty Insurance and Reinsurance1,516.3  1,424.4  4,484.9  4,260.1 
Operating income - Life insurance and Run-off1.2  33.0  16.7  42.7 
Operating income - Non-insurance companies48.8  125.9  91.3  162.2 
Net finance expense from insurance contracts and reinsurance contract assets held(1,112.6) (7.9) (1,483.3) (595.3)
Net gains on investments1,287.3  56.0  1,470.4  485.1 
Gain on sale of insurance subsidiary-  -  -  259.1 
Interest expense(164.4) (124.8) (476.3) (379.5)
Corporate overhead and other(82.6) (15.3) (142.4) (29.4)
Earnings before income taxes1,494.0  1,491.3  3,961.3  4,205.0 
Provision for income taxes(374.5) (304.3) (1,016.3) (784.9)
Net earnings 1,119.5  1,187.0  2,945.0  3,420.1 
        
Attributable to:       
Shareholders of Fairfax1,030.8  1,068.9  2,722.7  3,053.3 
Non-controlling interests88.7  118.1  222.3  366.8 
 1,119.5  1,187.0  2,945.0  3,420.1 

The table below presents the insurance service result for the property and casualty insurance and reinsurance operations reconciled to underwriting profit, a key performance measure used by the company and the property and casualty industry in which it operates. The reconciling adjustments are (i) other insurance operating expenses as presented in the consolidated statement of earnings, (ii) the effects of discounting on losses and ceded losses on claims incurred in the period, and (iii) the effects of the risk adjustment and other, which are presented in insurance service expenses and recoveries of insurance service expenses.

 Third quarter First nine months
Property and Casualty Insurance and Reinsurance2024  2023  2024  2023 
 ($ millions)
Insurance service result1,039.9  932.6  3,130.7  3,054.6 
Other insurance operating expenses(270.7) (183.8) (746.0) (575.3)
Discounting of losses and ceded losses on claims incurred in the period(391.3) (391.4) (1,267.9) (1,419.9)
Changes in the risk adjustment and other11.8  (65.8) 16.3  (116.5)
Underwriting profit389.7  291.6  1,133.1  942.9 
Interest and dividends544.2  453.7  1,591.8  1,172.6 
Share of profit of associates202.9  221.9  508.4  608.2 
Adjusted operating income1,136.8  967.2  3,233.3  2,723.7 

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