Fairfax Financial (FFH) Q4 2024 earnings summary

Executive summary

• Net earnings for 2024 were $3,874.9 million, with record underwriting profit of $1.8 billion and record interest and dividend income of $2.5 billion, supported by strong investment and associate earnings of $956 million.

• Book value per share increased 14.5% (adjusted for a $15 dividend) to $1,059.60, despite a $477 million loss in other comprehensive income from foreign currency movements.

• Gross premiums written hit an all-time high of $32.5 billion, up 12.6% year-over-year, driven by the consolidation of Gulf Insurance and organic growth.

• Major acquisitions included Sleep Country Canada, full ownership of Peak Achievement, and the remaining shares of Brit; a 33% investment in Albingia is pending regulatory approval.

• Net gains on investments totaled $1.1 billion, mainly from common stocks, offset by $731 million in unrealized bond losses due to rising interest rates.

Financial highlights

• Adjusted operating income for property and casualty insurance and reinsurance reached a record $4.8 billion, up 20.9% year-over-year.

• Float increased 5.9% to $35.4 billion.

• Interest and dividend income hit a record $2.5 billion, up 32% year-over-year.

• Cash and investments at the holding company stood at $2.5 billion, with access to a $2 billion undrawn credit facility.

• Effective tax rate increased to 24.4% from 13.8% in 2023, raising tax provision to $1,375.6 million.

Outlook and guidance

• Management expects to absorb significant catastrophe losses within underlying underwriting profit due to expanded premium base and diversification.

• Early estimate of net losses from Southern California wildfires is $500–$750 million pre-tax, expected to be covered by Q1 cat margin and underwriting income.

• Long-term prospects for international operations are strong, with continued focus on growth and management excellence.

• Management remains focused on strong financing, ending 2024 with $2.5 billion in holding company liquidity.

• Subsequent investments include a 50% stake in Blizzard Vacatia and a pending 33% stake in Albingia SA.