Hoodlum

I think one day we and the market will be talking about KI insurance as the big surprise, similar to how the sale of the Pet insurance business surprised us. Except KI will be on a much larger scale.

I agree that it was the timing during Covid that makes this look so amazing in hindsight. We will likely see a similar situation with the Odyssey Re deal with OMERS. I suspect Fairfax is also paying relatively little to hold the TRS on their shares, as that was also done during the same period. it is quite amazing how Fairfax took advantage of the short low interest period during Covid, but also recognized that interest were going to jump and prepared for that as well. Not only in relation to their long bonds but also likely realizing how inflation and higher interest rates was going to drive growth quickly. A mini book could be created from these short years, once all is said and done.

I am beginning to think his analysis is AI generated.

Peter included this comment as a part of his presentation. I wonder if Fairfax is now leaning more towards higher constant interest rates and so may not lock in to additional long bonds until they become even more favorable. The possibility of a long period of US tariffs could also be fueling this thinking. Also, if rates stay where they are, which we think they might, interest income could be even higher over the next few years

I found this from the 2021 Annual Report. Fairfax now has the option to reacquire the minority interest in Odyssey Re. The company has the option to purchase the interests of CPPIB and OMERS in Odyssey Group at certain dates commencing in January 2025.

Yes, this is becoming a new tailwind that is not being accounted for in analyst estimates.

@Viking Would Blizzard Vacatia also fall under ‘non-insurance consolidated companies’. If so, I would presume Fairfax's investment of $835M for 50% equity would get Blizzard Vacatia close to the top 5 in this group and would add to this groups earning in 2025.

It looks like we will need to wait for the conference call to find out if there was any material change in bond duration.

Could there be Employee share purchases in Q4 that need to be accounted for?

I see the combined losses on Hurricane Milton and Helene was $304M. Less than what I expected and it would seem less than the industry as a whole based on prior hurricanes. It looks like our risk models are holding up well compared to the competition.

We did see some info on both of these previously but now we see the details of the transactions. It will be interesting to hear more about Blizzard Vacatia as that is a notable investment and at 50%, a significant share of the company. I wonder what the dividends would look like in Q1.

Maybe this is how they plan to slowly close off the TRS over time.

The Foreign Currency loss of $22/share was the surprise from Q4. Something we didn't account for and would have been difficult to determine.

For East US Hurrcicanes, Fairfax usually trends towards 1/3 of what BRK estimates. So based on the $1.3-$1.5B range estimate from BRK, I am estimating ~$450M. The gain from the Stelco sale would offset most of this. The Wildfires is more difficult to predict as the last comparable event for the industry and Fairfax was in 2018 and a lot has changed since then. I will say anywhere from $200-400M, but that could still be off.

I suspect some of this will be new to the analysts that are following Fairfax. The sale price of Peak could only be determined if they looked at Power Corp's financial. I am not sure how far they go with their analysis. The Milton Hurricane and Wildfire exposures will be interesting to see.