Fairfax Financial Holdings has announced its financial results for the fiscal year 2023.
Gross premiums written grew by 4.8% or $1.3 bn to $28.9 bn, while net premiums written grew by 3.5%, primarily reflecting new business and incremental rate increases in certain lines of business.
The Fairfax Financial’s net finance expense from insurance contracts and reinsurance contract assets held of $1.6 bn in 2023, compared to net finance income from insurance contracts and reinsurance contract assets held of $1.6 bn in 2022.
Net earnings of $4,381.8 mn, compared with fiscal year 2022 net earnings of $3,374.2 mn.
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 mn in 2023, compared to $1,105.3 mn in 2022.
2023 was the best year in our history with net earnings of $4.4 bn, producing record adjusted operating income of $3.9 bn from our property and casualty insurance and reinsurance operations, reflecting records achieved in our core underwriting performance, interest and dividends of $1.7 bn and increased favourable results from profit of associates
Prem Watsa, Chairman and Chief Executive Officer Fairfax Financial Holdings
“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.”
In Q4, the net earnings were $1,328.5 mn, compared to $2,318.1 mn in Q4’22.
Adjusted operating income of the P&C insurance and reinsurance operations increased by 53.1% to a record of $3,938.5 mn from $2,572.9 mn
Net premiums written by the P&C insurance and reinsurance operations increased by 3.5% to a record $22.7 bn from $21.9 bn, 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 of $6,332.6 mn in 2023, compared to $6,559.7 mn in 2022. Brit reported GWP of $3,731.7 mn in 2023, down from $3,945.9 mn in 2022.
On December 26, 2023 Fairfax Financial acquired an additional 46.3% of Gulf Insurance, increasing the company’s total equity interest to 90% which will add approximately $2.7 bn of gross premiums written to consolidated results in 2024.
Fairfax increased annual interest and dividend income run-rate to approximately $2 bn and anticipate it will remain at this level for approximately the next 4 years.
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.
Net gains on investments of $1.9 bn were principally comprised of net gains on common stocks of $1.2 bn and bonds of $700 mn.
“We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 bn in cash and investments in the holding company, our debt to capital ratio at 23%”, Prem Watsa says.
