Fairfax Financial (FFH) Q1 2026 earnings summary

Executive summary

• Operating income from insurance and reinsurance companies rose to CAD 1.2 billion (or $1,213.4 million), up from CAD 686 million year-over-year, driven by better underwriting, higher profit from associates, and increased interest/dividend income.

• Net earnings for Q1 2026 were CAD 696 million ($695.7 million), with book value per share increasing 0.5% from year-end 2025, adjusted for dividend.

• Significant transactions expected in Q2: sale of half of Poseidon stake (CAD 1.9 billion/$1.9 billion, pre-tax gain CAD 837 million/$837 million) and Eurolife life operations (CAD 935 million/$935 million, pre-tax gain CAD 350 million/$350 million).

• Share buyback of 375,000 shares for CAD 631 million ($631.3 million) completed in the quarter.

• Net earnings declined from $945.7 million in Q1 2025, mainly due to investment losses despite improved underwriting and operating income.

Financial highlights

• Underwriting income reached CAD 382 million ($381.6 million); interest and dividend income CAD 561 million ($561.2 million); profits of associates CAD 271 million ($371.5 million).

• Net losses on investments of CAD 386 million ($385.9 million), mainly mark-to-market losses on bonds, compared to net gains of CAD 1.1 billion ($1,056.1 million) in Q1 2025.

• Consolidated investment return was 0.8%, driven by interest/dividend income and profits of associates.

• Gross premiums written grew 4.1% year-over-year to CAD 8.7 billion, led by growth in International and Global segments.

• Holding company cash and investments at CAD 2.5 billion ($2.5 billion) at quarter-end.

Outlook and guidance

• Management expects to close the Poseidon and Eurolife Life Operations sales in Q2 2026, generating substantial pre-tax gains.

• International operations expected to offer strong long-term growth potential due to skilled management and robust local economies.

• Combined ratio for international operations anticipated to improve, supporting overall underwriting profit outlook.

• Investment performance is expected to remain volatile quarter-to-quarter but positive over the long term.