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I think people confuse how hard or soft the market impacts near term profitability because they have been trained by quants to focus on the rate of change instead of absolute profitability. It does make sense for the average quality business but insurance and Fairfax in particular doesn’t screen well. A softer insurance market will mean lower float growth as Fairfax slows premium growth to compensate. We already saw some of that last year. However, a significant benefit from the hard market in underwriting profitability is deferred via reserves. We have just started to see reserve releases tick up as we lap 4 years of a hard market. Consequently, the combined ratio might come down just as market participants who don’t appreciate this nuance are expecting it to rise. Last quarter was a good example.

https://www.ekathimerini.com/economy/1265036/fairfax-invests-further-into-metlen-group/ Fairfax Financial, one of the holding companies with the greatest exposure in Greece in recent years, is increasing its stake in leading Greek group Metlen Energy & Metals, investing a further 110 million euros, the Athens-listed company announced on Monday. In a statement, Metlen said it has reached an agreement with Canada-based Fairfax to enter a €110 million exchangeable bond, through which Fairfax will have an option to acquire 2.75 million Metlen treasury shares within two years at a price of €40 per share, representing 1.92% of the Greek group’s share capital. It added that following that acquisition, Fairfax’s total stake in Metlen will increase to 8.35%. Some additional notes: Strategic Implications This transaction aligns with Metlen’s broader strategy to fund its “Big 3” transformation program, which includes expanding into critical raw materials (e.g., bauxite, gallium) and renewable energy infrastructure. The capital infusion arrives as Metlen prepares for its London Stock Exchange listing and potential inclusion in the FTSE 25 Index, enhancing its global visibility and access to institutional investors. Historical Investment Timeline Fairfax’s relationship with Metlen (formerly Mytilineos) dates to 2012, when it first acquired shares. Subsequent milestones include: • 2022: A €50 million equity purchase and €50 million exchangeable bond at €20 per share, raising Fairfax’s stake to 4.68%. • February 2025: Exercise of prior exchangeable bonds increased Fairfax’s stake to 6.43%. • March 2025: The latest €110 million bond extends this partnership, reflecting 13 years of collaborative growth. Capital Markets Day and LSE Listing Metlen has scheduled a Capital Markets Day on April 28, 2025, at the London Stock Exchange, where it will detail its €295.5 million investment in raw material production and renewable energy projects. The Fairfax deal strengthens Metlen’s balance sheet ahead of this event, providing liquidity to advance its 530 MW Australian solar portfolio and 71.5 MW Italian solar projects. Financial Performance and Shareholder Returns • 2024 Results: Metlen reported €1,080 million EBITDA (+7% YoY) and proposed a €1.50 per share dividend. • Debt Management: Adjusted net debt stood at €1,776 million (Net Debt/EBITDA: 1.7x), manageable despite aggressive CAPEX. Valuation/Prospects • Valuation Upside: The €40 conversion price implies a 12.5x P/E multiple on 2024 earnings, below peers in the European energy sector. • FTSE 25 Prospects: Metlen’s London listing could attract $500 million–$1 billion in passive fund inflows, given FTSE 25 inclusion criteria. Edit: Attached some MS coverage of the deal METLEN_20250324_1310.pdf