Fairfax 2025

[Parsad]

19 hours ago, gary17 said:

I was reading an article that says if BC has a M9 earthquake, all insurers in Canada could become insolvent.  I suppose Fairfax would be severely affected too

 

I would say a large number would become insolvent and there could be a domino effect with losses to banks and other financial institutions.  In a case like that, it is similar to the GFC and the government would have to act as a partial backstop.

 

Also, deductibles for earthquake property losses have risen dramatically over the last decade.  I think insurers are wising up to the risks of a 9.0 earthquake hitting the West Coast.  

 

it's likely the strongest financial institutions would have to absorb some of the insolvent institutions...be it insurance, banking, lending, etc.  With government injecting a huge amount of capital to rebuild, recapitalize the large institutions that are absorbing the losing institutions and to stabilize markets and the economy.

 

While I don't want to see such an earthquake, surviving insurers will probably enjoy crazy pricing pressure for a solid decade!  It's why I want to see Fairfax be the gold standard and be the last insurer standing in such scenarios.  

 

In theory, Fairfax is built to withstand something like a 9.0 earthquake hitting a city like LA, a F5 hurricane hitting square in the middle of Florida and a 50% drop in the S&P500 all in the same year!  So it's extremely unlikely...you have a far better chance of being killed while driving your car!  Cheers!

[Viking]

1 minute ago, Parsad said:

 

I would say a large number would become insolvent and there could be a domino effect with losses to banks and other financial institutions.  In a case like that, it is similar to the GFC and the government would have to act as a partial backstop.

 

Also, deductibles for earthquake property losses have risen dramatically over the last decade.  I think insurers are wising up to the risks of a 9.0 earthquake hitting the West Coast.  

 

it's likely the strongest financial institutions would have to absorb some of the insolvent institutions...be it insurance, banking, lending, etc.  With government injecting a huge amount of capital to rebuild, recapitalize the large institutions that are absorbing the losing institutions and to stabilize markets and the economy.

 

While I don't want to see such an earthquake, surviving insurers will probably enjoy crazy pricing pressure for a solid decade!  It's why I want to see Fairfax be the gold standard and be the last insurer standing in such scenarios.  

 

In theory, Fairfax is built to withstand something like a 9.0 earthquake hitting a city like LA, a F5 hurricane hitting square in the middle of Florida and a 50% drop in the S&P500 all in the same year!  So it's extremely unlikely...you have a far better chance of being killed while driving your car!  Cheers!

Fairfax has been building additional resiliency into its business model in recent years.
 

One example is the build out of the non-insurance consolidated group of holdings. This is now a significant group of companies (number and size). This is a fifth income stream for Fairfax that is starting to break out (my estimate is $450 million in 2026) - that is not correlated with P/C insurance and will not be affected by stock market volatility. Holdings could also an important source of liquidity should Fairfax need some cash. My guess is this bucket of holdings will continue to grow in size in the coming years.

 

[Parsad]

5 hours ago, Viking said:

Fairfax has been building additional resiliency into its business model in recent years.
 

One example is the build out of the non-insurance consolidated group of holdings. This is now a significant group of companies (number and size). This is a fifth income stream for Fairfax that is starting to break out (my estimate is $450 million in 2026) - that is not correlated with P/C insurance and will not be affected by stock market volatility. Holdings could also an important source of liquidity should Fairfax need some cash. My guess is this bucket of holdings will continue to grow in size in the coming years.

 

 

That's true!  Many people would like Fairfax to just focus on insurance, but adding non-insurance businesses gives it that stability in cash flow during an insurance crisis.  Berkshire's huge and diversified cash flows, not to mention fortress balance sheet, gives it that gold standard status..."the check always clears at Berkshire"..."last one standing".  Cheers!

[JJR]

I recently added to my position, so it is now a top 3 position (1500 shares).  I consider Fairfax a 'core' position along with MCEM and JOE.  We all know stock prices go both up and down, so I'm curious if the lack of Fairfax posts is because the stock price has headed south this year or are shareholders posting elsewhere this year, as not one post in 2026.

[Junior R]

20 minutes ago, JJR said:

I recently added to my position, so it is now a top 3 position (1500 shares).  I consider Fairfax a 'core' position along with MCEM and JOE.  We all know stock prices go both up and down, so I'm curious if the lack of Fairfax posts is because the stock price has headed south this year or are shareholders posting elsewhere this year, as not one post in 2026.

Everyone one is just letting the plants grow lol 

[Hoodlum]

37 minutes ago, JJR said:

I recently added to my position, so it is now a top 3 position (1500 shares).  I consider Fairfax a 'core' position along with MCEM and JOE.  We all know stock prices go both up and down, so I'm curious if the lack of Fairfax posts is because the stock price has headed south this year or are shareholders posting elsewhere this year, as not one post in 2026.

it looks like you didn’t transition to the 2026 thread. There are also other Fairfax threads in the Fairfax sub-forum. You have a lot of reading to catch up on. 
 

 

[JJR]

"it looks like you didn’t transition to the 2026 thread. There are also other Fairfax threads in the Fairfax sub-forum. You have a lot of reading to catch up on."

 

Thanks Hoodlum.   I had this 2025-thread in my favorites, which I have also done for the JOE and ELF threads, but I did not know the Fairfax thread switched annually.  I also did not know there are additional Fairfax forums to check out.  It'll be a wonderful day of reading today!