Fairfax Financial Holdings Limited has reported a dip in net earnings to $68.6 million for the third-quarter of 2019, primarily as a result of a $96.7 million loss on investments, compared with a gain of $41.2 million in the prior year quarter.
The Canada-based firm’s net earnings fell by almost 55% year-on-year from the $106.2 million reported in Q3 2019, with the investment losses partially offset by elevated operating income of $280.1 million versus $249.9 million a year earlier.
Despite the impacts of catastrophe events in the period, Fairfax’s insurance and reinsurance operations produced an underwriting profit of $81.3 million, up almost 10% on the $74.2 million posted in the third-quarter of 2018.
The firm’s re/insurance operations recorded a consolidated combined ratio of 97.5% in Q3 2019 versus 97.6% in the prior year quarter.
Prem Watsa, Chairman and Chief Executive Officer (CEO), commented: “Despite the catastrophe activity in the quarter, our insurance companies continued to have strong underwriting performance with a third quarter consolidated combined ratio of 97.5%, with Zenith National at 87.1% and all but one of our other major companies between 96.2% and 97.9%, and our operating income remained excellent, improving to $280 million.
“We continue to be soundly financed, with over $1 billion cash and marketable securities at the holding company and no significant holding company debt maturities until 2022.”
Gross premiums written increased from $3.8 billion to $4.2 billion and net premiums written grew from $2.9 billion to $3.3 billion, in Q3 2019.
Also supporting Fairfax’s earnings in the quarter was higher interests and dividends of $214.9 million, while this was somewhat offset by a higher interest expense of $121.5 million.
