Leaderboard

I agree we need to be open minded about how we analyze and value Fairfax. Interest rates are a great example. Yes, there is a good chance they could go lower from here. That was the big worry with Fairfax 6 months ago. And what has happened? Interest rates have moved much higher. Where do interest rates go from here? We have to options: Lower Higher My view is both possible outcomes need to be incorporated into models for Fairfax. What I find many investors (and analysts) do is think about headwinds. And ignore tailwinds. From my perspective that is not a balanced approach.

@kab60 underwriting income represents only about 22% of Fairfax's various earnings streams. This is much less than traditional P/C insurers (who are closer to 45% or more I think). Does this split matter in your analysis? PS: Moving forward investment gains will be a larger source of earnings for Fairfax than underwriting income. And we now have $3.9B in excess of FV over CV... this is a leading indicator of how strong investment gains will be in the coming years (with Q2 being a good example). Traditional P/C insurance companies do not have this income stream at all (let alone $3.9B sitting there waiting to be harvested). Of course, there are other examples of hidden value not captured in the $3.9B, with BIAL being a good example. This is a massive asset that is growing in value each year. Traditional P/C insurance companies do not have these assets as well.

What is interesting is that the Float/BV ratio for 2025 was the lowest ever for Fairfax. We may see that drop again a bit more this year. Fairfax is still able to earn ~$200US/share in this soft insurance environment by pulling back on low profit lines in certain regions. This is much different that prior soft markets where Fairfax kept a much higher Float/BV ratio and shows how their insurance businesses have improved with better managed risk to larger Cat events.