Fairfax Financial Holdings Limited has announced its financial results for the fiscal year 2023 net earnings of $4,381.8 million, compared with fiscal year 2022 net earnings of $3,374.2 million.
In Q4, the net earnings were $1,328.5 million, compared to $2,318.1 million in Q4’22.
The consolidated combined ratio of the property and casualty (P&C) insurance and reinsurance operations was 93.2% compared to the combined ratio of 94.7% in 2022. The company produced an underwriting profit of $1,522.2 million in 2023, compared to $1,105.3 million in 2022.
Adjusted operating income of the P&C insurance and reinsurance operations increased by 53.1% to a record of $3,938.5 million from $2,572.9 million
Net premiums written by the P&C insurance and reinsurance operations increased by 3.5% to a record $22.7 billion from $21.9 billion, and gross premiums written increased by 4.8%, reflecting growth across most operating companies, partially offset by decreases at Odyssey Group.
Odyssey Group posted Gross Premiums Written (GWP) of $6,332.6 million in 2023, compared to $6,559.7 million in 2022. Brit reported GWP of $3,731.7 million in 2023, down from $3,945.9 million in 2022.
“2023 was the best year in our history with net earnings of $4.4 billion, producing record adjusted operating income of $3.9 billion (or operating income of $5.7 billion including the benefit of discounting, net of a risk adjustment on claims) from our property and casualty insurance and reinsurance operations, reflecting records achieved in our core underwriting performance, interest and dividends of $1.7 billion and increased favourable results from profit of associates,” said Prem Watsa, Chairman and Chief Executive Officer.
“All of our major insurance and reinsurance companies achieved combined ratios below 100% for a consolidated combined ratio of 93.2% and underwriting profit of $1.5 billion, on an undiscounted basis.”
“Gross premiums written grew by 4.8% or $1.3 billion to $28.9 billion, while net premiums written grew by 3.5%, primarily reflecting new business and incremental rate increases in certain lines of business.”
The company’s net finance expense from insurance contracts and reinsurance contract assets held of $1.6 billion in 2023, compared to net finance income from insurance contracts and reinsurance contract assets held of $1.6 billion in 2022.
“On December 26, 2023 we acquired an additional 46.3% of Gulf Insurance, increasing the company’s total equity interest to 90.0% which will add approximately $2.7 billion of gross premiums written to our consolidated results in 2024,” Watsa noted.
“We have increased our annual interest and dividend income run-rate to approximately $2.0 billion and we anticipate it will remain at this level for approximately the next four years.”
“Our fixed income portfolio continues to be conservatively positioned with effectively 69% of the fixed income portfolio invested in government bonds, 20% in high quality corporate bonds, primarily short-dated, and 11% in first mortgage loans.”
“Our net gains on investments of $1.9 billion were principally comprised of net gains on common stocks of $1.2 billion and bonds of $0.7 billion.
“We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 billion in cash and investments in the holding company, our debt to capital ratio at 23.1%.”
