Fairfax Financial (FFH) Q3 2024 earnings summary

Executive summary

• Net earnings for Q3 2024 exceeded $1 billion, reaching $1,030.8 million, driven by strong adjusted operating income and net investment gains.

• Book value per share rose to $1,033 at September 30, 2024, up 11.7% from year-end 2023, adjusted for dividends.

• Underwriting income from property and casualty insurance and reinsurance was $390 million, with a combined ratio of 93.9%.

• Gross premiums written reached $8.3 billion, up 13.9% year-over-year, driven by the consolidation of Gulf Insurance.

• Catastrophe losses totaled $434 million, mainly from Hurricane Helene and Canadian storms.

Financial highlights

• Interest and dividend income was $610 million, up from $513 million in Q3 2023.

• Net gains on investments were $1.3 billion, mainly from $829 million in bonds and $323 million in equities.

• Share of profits from associates was $260 million, mainly from Eurobank and Poseidon.

• Operating income from non-insurance companies fell to $49 million from $126 million year-over-year, due to lower margins and business volumes.

• Book value per share does not include $1.9 billion in unrealized gains from non-insurance investments.

Outlook and guidance

• Annual operating income is expected to remain stable at $4 billion for the next 3–4 years, with $2+ billion from interest/dividends, $1.25+ billion from underwriting, and $750 million from associates.

• Premium growth is expected to normalize, with focus on underwriting profit over growth.

• International operations, especially in Asia, Middle East, Eastern Europe, South Africa, and LATAM, are seen as significant future growth drivers.

• Management remains focused on maintaining strong financing, with $2.0 billion in cash and marketable securities at the holding company.

• Anticipates consolidating Peak Achievement and Sleep Country in the non-insurance segment in Q4 2024 following recent acquisitions.