Fairfax Financial Holdings Limited

Earnings & book value: strong operating performance, but investment losses drove volatility - Operating income (insurance/reinsurance, adjusted undiscounted, before risk margin): $1.4B, up from $1.3B in Q3’25. - Underwriting income: $524M, slightly down vs $540M in Q3’25; combined ratio 92.5% (IFRS 17 combined ratio 81.7%). - Net earnings: $930M for the quarter; $3.0B for first nine months. - Book value per share: $1,349, +8.4% YoY vs year-end 2025 (after the $15 dividend). - Surprising/important dynamic: despite strong underwriting, the quarter’s P&L was pressured by investment mark-to-market losses.

Investments: big mark-to-market losses from rising rates; long-term “should be fine” stance - Consolidated net losses on investments: $859M in Q3, mainly unrealized bond losses (driven by higher interest rates). - Q3’25 had net investment gains of $426M. - Consolidated interest & dividend income: $669M, up slightly YoY ($655M in Q3’25). - Wade’s outlook/positioning: Fairfax is short duration (~2 years, average term ~3 years) with very high liquidity ($8.3B+ cash in short-term bonds); spreads described as “still narrow,” and volatility is “primarily upward in rates,” which they view as beneficial going forward. - Key investor implication: investment results are expected to fluctuate quarter-to-quarter; management frames this as normal in a volatile rate regime.

Insurance growth & profitability: international growth offsets softening markets - Gross premiums: $8.9B, +9.3% YoY. - North America premiums: modest growth (e.g., +5.1% at North American insurance; Crum & Forster +6.6% YoY). - Global insurer/reinsurer gross premiums: $4.5B, +5.3% YoY (pricing improving in parts; disciplined underwriting). - International operations: $1.9B gross, +27.1% YoY (+13% net), driven by stronger growth in multiple geographies; international ≈ 21% of overall gross premiums. - Outlook/expectations: management expects underwriting margins to remain attractive overall but remain disciplined as rates/conditions are softening, especially in parts of North America and property/cat reinsurance.