Hoodlum

I was actually surprised when AGT mentioned in their press release that they had over $3B in annual revenue. This could be another asset to monitor for valuation. I came across this recent interview with Grivalia Hospitality’s CEO, that provides some insight on how they develop their properties. https://www.hospitalityinvestor.com/investment/interview-grivalia

At the end of q3, asset duration was almost the same as liability duration. This gap may have shrunk further towards the end of q4. I wonder if due to IFRS reporting, we will not see much of an impact going forward with bond volatility. AGT Food mentioned that the rail sale would provide significant capital to them and was expected to close in late 2024 or early 2025. I haven’t heard anything on this, so I presume they are only waiting for regulatory approval. Fairfax may receive a special dividend from this, albeit in Q1 now.

Here is the press release from Eurobank on the Fairfax shares that were sold today. Shares closed at Euro 2.39 today. https://www.eurobankholdings.gr/en/grafeio-tupou/etairiki-anakoinosi-23-01-2025 Eurobank Ergasias Services and Holdings S.A. (“Eurobank”) announces that it has been informed by the official announcement of its shareholder, Fairfax Financial Holdings Limited (“Fairfax”) of the following: Fairfax has successfully sold 80 million ordinary shares (the “Shares”) of Eurobank, corresponding to approximately 2.2% of Eurobank’s share capital, at a price of Euro 2.33 per Share, through an accelerated book building procedure reserved for qualified investors (the “Transaction”). The total proceeds of the Transaction amount to approximately 186 million euros. Settlement is expected to occur on or around January 27th, 2025. This disposal represents a mandatory technical adjustment to Fairfax’s significant equity holding in Eurobank and does not reflect in any way a view on Eurobank’s valuation or long-term prospects. Following the Transaction, Fairfax will retain an equity stake of around, but below 33% of Eurobank’s share capital and will continue to remain a long-term, committed reference shareholder of Eurobank. Fairfax has also agreed to a 180-day lock-up period from the closing of the Transaction with respect to its remaining shares in Eurobank, subject to customary exceptions.

That would suggest their shares would be brought down to 32.4% (34.6-2.2). Fairfax may have decided to bring their ownership to below 33.3%, so they would not need to immediately adjust after any Eurobank buybacks.

It certainly looks like this was driven by compliance. The link I provided specifically mentioned that the exemption to hold over 33.3% was recently rescinded. The link you referenced displays the current voting rights for Fairfax, not the ownership of shares. This was how the regulators allowed Fairfax to own over 33.3%, by limiting their voting right. This sale will now bring their shares ownership in line with their voting rights, meeting the regulator requirements.

Fairfax is selling 2.2% of Eurobank to meet regulatory ownership requirement of minority ownership to be below 33%. Price will be announced tomorrow. https://www.tovima.com/finance/eurobank-prem-watsa-s-fairfax-reducing-stake-to-33/ Canadian billionaire investor and businessman Prem Watsa commenced the placement of 2.2% of Greek systemic lender Eurobank’s shares – some 80 million shares in total – on Wednesday, with the price per share to be announced on Thursday morning. According to sources from within the bank, the founder and CEO of Fairfax Financial Holdings was reducing the holding company’s stake in ATHEX-listed Eurobank to meet regulatory conditions – which mandate a minority stake of no more than 33.3% – and is not part of any change in the composition of the bank’s main shareholders. According to market watchers, the price per share was expected to be just under of the current market rate. According to a Reuters dispatch, demand for the placement is already oversubscribed. Watsa had previously received a special exemption from banking regulators to own a stake higher than 33.3% but without retaining board voting rights. That exemption was recently rescinded.

It is interesting how it was commented that the P&C industry regularly operates at a substantial underwriting loss. We have seen this change with Fairfax but also with much of the industry over the past decade. Is this something that is sustainable or will we eventually go back to the historical trend. The expectation of Substantial Underwriting Losses is what really stood out to me.

Eurobank sold it's 8.58% share of remaining Demetra assets for €27M, which is help offset the purchase of the Hellenic shares from Demetra. The completion of the Hellenic share acquisition from Demetra is expected to close Feb 10 and the final closing including squeeze of remaining share holders by May. Hellenic Bank acquisition of CNP Assurances is also expected to close in Q1. https://cyprus-mail.com/2025/01/17/eurobank-to-finalise-hellenic-bank-acquisition-by-may https://knews.kathimerini.com.cy/en/business/eurobank-sells-€27m-stake-in-demetra-holdings After another big dividend increase this summer, we will likely see a much higher valuation for Eurobank.

CoreLogic is the first Catastrophe Risk modeler to report estimates for the LA Wildfires. These are quite a bit higher than the earlier Analyst estimates. https://www.reinsurancene.ws/corelogic-pegs-la-wildfire-insured-loss-at-35bn-to-45bn/ Catastrophe risk modeller CoreLogic has estimated that residential and commercial insurance industry losses for the ongoing Eaton and Palisades Fires in Los Angeles, California, will fall between $35 billion and $45 billion. With the fires in Eaton and Palisades still burning as of Thursday afternoon, CoreLogic’s estimated insured loss range is preliminary. The $35 billion to $45 billion range does include losses to the California FAIR Plan, which are expected to be significant given the extent of the damage and recent exposure growth at the Plan.

It is still difficult to predict a loss range for Fairfax with the LA fires, but it should be well under $500M. https://www.insuranceinsiderus.com/article/2eakm4d1hzu3e5yytdhq9/all-topics/catastrophe-losses/reinsurers-to-take-13-3bn-share-of-30bn-la-wildfire-loss-citi Reinsurance could take a $13.3bn share of the Los Angeles (LA) wildfire costs if the industry total reaches $30bn, according to Citi Analysis.

@cwericb I was a bit embarrassed to mentioned this so I appreciate your post. I too have been gleaning from this forum here and have learned over the years on what poster/post to pay more attention to. Similar to you I also had 25% returns during 22/23, followed by a 48% return in 2024. We must be following the same threads.

They are now suggesting that the California Wildfires insured loss will be between $25-$40B. I tried to go back for comparables with Fairfax, but there are some challenges. The last closest comparable would be the Woosley and Camp Wildfires in 2018 that had a combined insurance loss of $17B, with Fairfax reporting a $233M loss related to these 2 wildfires where Brit had the greatest exposure. Fairfax is a much larger company now and we don't know if their exposure to wildfires has changed in the past 7 years. Also, a larger share of the insured losses are now covered by California's Share plan, especially in higher risk areas such as those impacted by these wildfires. I am fairly certain Fairfax's losses won't get close to $500M but it is tough to even predict a range. This should help with overall insurance pricing this year and into 2026. Edit: Fairfax just announced $1M donation to California Wildfire Relief. They did the same in 2018 with a $500K donation.

Earning is likely 4 weeks from now (Feb 15 last year), so I wasn't expecting the blackout to begin already.

Backout? How long is the blackout period?

More large blocks traded this morning

it is Interesting that Go Digit has gone in the opposite direction the past few weeks and is now back to the IPO price. I wonder what that is about.

Not likely. Keep in mind insures losses are much less that the total damage cost with primary insurers covering most of the insured losses. The remaining reinsurance losses are still less than previous similar events over the past few years. Many insurers have pulled out of California. Speaking to coworkers at work they mentioned that fire insurance is very expensive or even difficult to get now. Many had to turn to the State run FAIR plan. https://www.investors.com/news/top-california-property-insurer-earns-double-upgrade-from-goldman/ Based on a preliminary assessment of the affected area and historical events, insured losses from this fire could approach $10 billion, with primary carriers being more exposed than reinsurers, the note said. Arch Capital and RenaissanceRe are the most exposed reinsurers, but their losses should be less than for similar events prior to 2023, the JPMorgan note said. https://www.afr.com/companies/financial-services/insurers-brace-for-losses-of-up-to-32b-from-la-fires-20250110-p5l3cq Allstate and State Farm are among the insurers that have recently stopped selling new home insurance policies in the state, blaming regulatory caps on price rises that made it increasingly challenging to cover losses. Insurers have also dropped customers in the most at-risk areas. Last year, State Farm announced it would not renew policies for 72,000 homes and apartments in the state, including 69 per cent of insurance plans in the upscale Pacific Palisades area engulfed by the latest wildfires. That has left many homeowners turning to California’s state-backed Fair Plan as well as less-regulated home insurance policies, so-called “non-admitted” insurers.

Just to close of on the Peak (Bauer acquisition). It looks like both CCM and Bauer were valued at 8x earning. https://www.theglobeandmail.com/business/article-northleaf-buys-ccm-stake-hockey-equipment/

But with of most of that not covered by reinsurance. Based on a preliminary assessment of the affected area and historical events, insured losses from this fire could approach $10 billion, with primary carriers being more exposed than reinsurers, the note said. Arch Capital (ACGL) and RenaissanceRe (RNR) are the most exposed reinsurers, but their losses should be less than for similar events prior to 2023, the JPMorgan note said.

Swiss Re provides some projections for Premium growth out to 2026. It looks like we won't see much of a drop next year although this will likely be dependent on what happens this coming Cat season. Swiss Re likely used an average Cat. season in determining the 4% premium growth for 2026. https://www.insurancebusinessmag.com/ca/news/reinsurance/us-pandc-insurance-sector-set-for-stable-roe-in-2025--swiss-re-519488.aspx Swiss Re anticipates that premium growth will slow, with a forecasted 5% increase in 2025 and 4% in 2026, compared to nearly 10% in 2024.

Expected Personnel changes announced. https://www.fairfax.ca/press-releases/personnel-announcements-01-03-2025/ TORONTO, Jan. 03, 2025 – Fairfax Financial Holdings Limited (“Fairfax”) (TSX: FFH and FFH.U) is pleased to announce that, effective January 1, 2025, Brian Young has become the President of Fairfax Insurance Group and Andrew Barnard, who has held this position since 2011, has moved to the role of Chairman of Fairfax Insurance Group. Brian joined Odyssey Group in 1996 and has served as its Chief Executive Officer since 2011. Odyssey has thrived under Brian’s leadership, generating an underwriting profit for 13 consecutive years and nearly tripling in size during his tenure. Effective January 1, 2025, Carl Overy has become the Chief Executive Officer of Odyssey, leading its three operating platforms: OdysseyRe, Hudson, and Newline. Carl has served as the Chief Executive Officer of OdysseyRe since April 2023 and previously served as the Chief Executive Officer of Newline and the London branch of OdysseyRe for 15 years. Prem Watsa, Chairman and Chief Executive Officer of Fairfax, commented: “Brian and Andy have worked together for nearly 35 years, the last 28 at Fairfax. Our expansive global (re)insurance operations will benefit greatly from their collective oversight. Carl is a proven leader who has devoted more than two decades of his life to Odyssey. We have no doubt that Odyssey will scale new heights under his leadership in the years to come.”

Dividend announced at $15/share as most here expected. https://www.fairfax.ca/press-releases/fairfax-declares-annual-dividend-2025-01-03/

It looks like Fairfax helped Vacatia with the acquisition of Berkley Group (owner of 50 times share resorts). There are no details of the acquisition cost or what Fairfax's involvement is. https://www.prnewswire.com/news-releases/vacatia-acquires-the-berkley-group-and-daily-management-302341393.html MILL VALLEY, Calif. and FORT LAUDERDALE, Fla., Jan. 2, 2025 /PRNewswire/ -- Vacatia, Inc., a provider of innovative, customer-centric solutions for timeshare resorts, announced today that it has acquired The Berkley Group, Inc., one of the largest resort developers in the United States, and Daily Management, Inc., a full-service property management company of vacation ownership resorts. The transaction was financed in partnership with certain affiliates of Fairfax Financial Holdings Limited. "We are delighted to partner with Vacatia in its acquisition of Berkley and Daily Management," said Wade Burton, President and Chief Investment Officer at Hamblin Watsa Investment Counsel Ltd., the investment manager on behalf of Fairfax. "The Vacatia team, led by Caroline Shin, has a long track record of success in property acquisition, management and development, and we think they will be terrific stewards of the Berkley business in the future."

Thanks Viking for the great updates. Not surprising that the TRS was the driver for the Equity Portfolio gains in Q4.

I believe there will be new areas that will require catastrophe insurance that either lumped it in with other insurance in the past or never thought it could occur in their area. Some areas in the Carolinas got hit very hard from Hurricane Milton and I know from speaking to some of my staff from that area who lived there for over 30 years, they thought they were protected because they were far enough inland. Even the NCEI that collect hurricane data in Asheville was unprepared and was offline for almost a month. The NCEI actually moved there over 50 years ago from New Orleans believing they would be protected. Earlier this month TD Insurance requested the first ever Canada Catastrophe bond. We will see more of this globally. https://www.artemis.bm/news/td-insurance-first-ever-pure-canada-risk-cat-bond-c150m-mmifs-re-2025-1/ TD Insurance, part of Canada’s TD Bank group, is seeking C$150 million in reinsurance from the capital markets through its debut MMIFS Re Ltd. (Series 2025-1) catastrophe bond deal, which would be the first natural cat bond to solely cover perils in that country, Artemis has learned. There are other insurers in Canada that have the scale and natural catastrophe exposure to become cat bond sponsors in future, so this MMIFS Re issuance should serve to further promote the potential for accessing reinsurance through the capital markets to those companies.