Fairfax 2026

[SafetyinNumbers]

41 minutes ago, Hoodlum said:

 

That is actually disappointing consider the share price over the past 3 weeks and the average daily volume.  Fairfax bought back only ~3% of the shares traded during this period.  I wonder if this was related to the instructions they provided to their broker prior to the backout period.
 

 

If they aren’t buying back stock then it’s safe to assume anything else they are doing at the holdco has a higher return.

[Viking]

31 minutes ago, SafetyinNumbers said:

If they aren’t buying back stock then it’s safe to assume anything else they are doing at the holdco has a higher return.

 

Fairfax also just paid a $15 dividend. Total shareholder return has been very good. 

Edited February 9 by Viking

[cwericb]

Eddie Bauer files chapter 11

[gfp]

5 minutes ago, cwericb said:

Eddie Bauer files chapter 11

 

What does that have to do with Fairfax?

[glider3834]

9 minutes ago, cwericb said:

Eddie Bauer files chapter 11

'Eddie Bauer (the clothing brand) and Bauer Hockey (the equipment manufacturer) are not related. They are two separate, distinct companies founded at different times by unrelated individuals.' source - gemini

[glider3834]

4 hours ago, SafetyinNumbers said:

Buybacks continue albeit at a slower pace.

 

 

I believe they repurchased less in '24 and '25 over same period and a little more around 62k in '23

[Hoodlum]

1 minute ago, glider3834 said:

I believe they repurchased less in '24 and '25 over same period and a little more around 62k in '23

Thanks for checking.  I also need to realize that the lower prices didn't occur until after 1/20, so there were only 7-8 days where they may have bought in January.

[cwericb]

29 minutes ago, glider3834 said:

'Eddie Bauer (the clothing brand) and Bauer Hockey (the equipment manufacturer) are not related. They are two separate, distinct companies founded at different times by unrelated individuals.' source - gemini

 

Thanks. that's what happens when you are eating out with the better half and see a crawl on TV about Eddie Bauer filing for chapter 11.  

[CharlesMunger]

So Chubb, Wrb, Brk, Markel, et all up - FFH down? Interesting lets see if this continues after earnings 

Edited February 12 by CharlesMunger

[Junior R]

1 hour ago, CharlesMunger said:

So Chubb, Wrb, Brk, Markel, et all up - FFH down? Interesting lets see if this continues after earnings 

On Canadian markets you get higher premium if you have high dividend increase cagr like IFC which trades over 2x book 

[Hoodlum]

OpenAI has approved a Spanish insurer for Home Insurance quotes through ChatGPT. 
 

https://www.reinsurancene.ws/openai-approves-first-insurer-built-ai-app-on-chatgpt/

[gfp]

4 minutes ago, Hoodlum said:

OpenAI has approved a Spanish insurer for Home Insurance quotes through ChatGPT. 
 

https://www.reinsurancene.ws/openai-approves-first-insurer-built-ai-app-on-chatgpt/

 

I don't know what this has to do with Fairfax specifically, but I don't see this as a big deal at all.  Hell, 20 years ago Progressive started showing their competitors quotes right alongside their own on the website.  Consumer / personal lines can be quoted with online forms.  ChatGPT is essentially just asking questions to fill out the same online form.  No big deal

Edited February 12 by gfp

[Junior R]

16 minutes ago, gfp said:

 

I don't know what this has to do with Fairfax specifically, but I don't see this as a big deal at all.  Hell, 20 years ago Progressive started showing their competitors quotes right alongside their own on the website.  Consumer / personal lines can be quoted with online forms.  ChatGPT is essentially just asking questions to fill out the same online form.  No big deal

Also this is more of competion for Google VS insurance underwriters as now sale will come from OpenAI, Vs Google 

[djokovic1]

Has anyone analyzed if buybacks significantly increase after closed period in the past? 

[gfp]

Fairfax investors and other property insurance investors should probably have a listen (or have their assistant summarize the comments around property pricing) to the RYAN conference call last night.  As Spek mentioned on the broker thread, property pricing has had a significant pull back.  Maybe one cat away from reversing that, but still important to be aware of.  

 

As a gulf coast property insurance customer I have heard this is starting to trickle down from reinsurance -> primary -> actual homeowners.  Can change on a dime of course.

 

--------------

• Ryan executives described the property insurance market as extremely volatile and rapidly softening, especially late in Q4. Pricing weakened meaningfully through the quarter. 

• On large accounts, average rate declines reached around 25% to 35% by December. 

• Management said this trend continued into 2026, with expectations for further declines in property pricing based on current renewals and market sentiment. 

• There were some pockets where admitted carriers returned to write smaller accounts, but these weren’t yet “meaningful” enough to reverse broader pricing softness. 

 

 

Edited February 13 by gfp

[UK]

Well, after a year with zero hurricans on land and premiums increasing for a while so much some moderation is just normal/part of the game stuff I guess. 

[hardcorevalue]

but -35%? Is that not playing right inline with the BMO report that tanked the stock?

Edited February 13 by hardcorevalue

[MMM20]

30 minutes ago, hardcorevalue said:

but -35%? Is that not playing right inline with the BMO report that tanked the stock?

Are we looking at -35% globally and across all lines? 

[gfp]

Just now, MMM20 said:

Are we looking at -35% globally and across all lines? 

 

No, that was the high end of a range for a.) large accounts and b.) property coverage (likely in cat exposed areas like gulf coast / FL)

[MMM20]

2 minutes ago, gfp said:

 

No, that was the high end of a range for a.) large accounts and b.) property coverage (likely in cat exposed areas like gulf coast / FL)

Yeah that’s what I was getting at. 

[SafetyinNumbers]

Fairfax has an advantage of being more diversified than most of the peers. They can also grow net premiums faster by using less reinsurance. My guess is they can still grow net premiums closer to 5% this year. That still leaves a lot of capital for buybacks and the purchase of minority interests. 

[Hoodlum]

This was from Fitch at end of January regarding US P&C market in 2026.  It is a gradual 2-3 point increase in CR for 2026.

 

https://www.reinsurancene.ws/fitch-ratings-us-pc-market-to-soften-further-in-2026-as-competition-intensifies/

 

Fitch projects that the US commercial lines sector will post an aggregate combined ratio of around 94% for 2025. Underwriting profitability is expected to narrow modestly in 2026, with combined ratios drifting to 96%–97%, assuming catastrophe activity returns to more typical levels.

 

In personal lines, Fitch Ratings expects homeowners’ insurance results to remain supported by prior rate increases and tighter policy terms, which have improved combined ratios. For private passenger auto, the pace of rate increases is forecast to slow further but remain positive into 2026.

 

[Hoodlum]

https://www.globenewswire.com/news-release/2026/02/13/3238353/0/en/Fairfax-Announces-Conference-Call.html

 

TORONTO, Feb. 13, 2026 (GLOBE NEWSWIRE) -- Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) will hold a conference call at 8:30 a.m. Eastern Time on Friday, February 20, 2026 to discuss its 2025 year-end results, which will be announced after the close of markets on Thursday, February 19, 2026 and will be available at that time on its website at www.fairfax.ca. The call, consisting of a presentation by the company followed by a question period, may be accessed at 1 (800) 369-2143 (Canada and U.S.) or 1 (312) 470-0063 (International) with the passcode “FAIRFAX”.  

 

A replay of the call will be available from shortly after the termination of the call until 5:00 p.m. Eastern Time on Friday, March 20, 2026. The replay may be accessed at (866) 360-3309 (Canada and U.S.) or 1 (203) 369-0164 (International).

[dartmonkey]

6 minutes ago, Hoodlum said:

https://www.globenewswire.com/news-release/2026/02/13/3238353/0/en/Fairfax-Announces-Conference-Call.html

 

TORONTO, Feb. 13, 2026 (GLOBE NEWSWIRE) -- Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) will hold a conference call at 8:30 a.m. Eastern Time on Friday, February 20, 2026 to discuss its 2025 year-end results, which will be announced after the close of markets on Thursday, February 19, 2026 and will be available at that time on its website at www.fairfax.ca. The call, consisting of a presentation by the company followed by a question period, may be accessed at 1 (800) 369-2143 (Canada and U.S.) or 1 (312) 470-0063 (International) with the passcode “FAIRFAX”.  

 

A replay of the call will be available from shortly after the termination of the call until 5:00 p.m. Eastern Time on Friday, March 20, 2026. The replay may be accessed at (866) 360-3309 (Canada and U.S.) or 1 (203) 369-0164 (International).

Strange that it is still not on their website, but ok, I guess that solves that one. A few days later than usual, but the Friday pre-announcement for the next Thursday, somewhere between the 10th and the 20th, I guess is the rule. Why it wasn't yesterday instead of next Thursday, I guess we will never know, but it doesn't really matter either.

 

Update at 17:12 - ok, it's on the website now. I guess the put out the press release before updating the website, a few minutes later.

Edited February 13 by dartmonkey

[Viking]

Performance and Valuation – Comparing Fairfax to P/C Insurance Peers - Part 1

 

As we wait for results from Fairfax later this week, this is a good time to revisit how the stock is currently being valued. 

 

Valuation Methodology: A Relative Return Framework

 

There are many ways to value a company. Here, we use a relative approach—comparing Fairfax to a select group of high-quality P/C insurers—to answer three core questions:

1. How have these companies performed?
2. How are they being valued today?
3. Does valuation align with performance?

 To provide additional context, we also compare results to the broader market as an absolute benchmark.

---

Peer Group

 

Fairfax is compared against the following companies (alphabetical order):

• Berkshire Hathaway (BRK) – Historical gold standard; now a diversified conglomerate
• Chubb (CB) – Large, global, traditional insurer
• Intact Financial (IFC.TO) – Largest P/C insurer in Canada; expanding globally
• Markel (MKL) – “Baby Berkshire”; U.S.-focused specialty insurer
• Travelers (TRV) – Large U.S. insurer; DJIA component
• W.R. Berkley (WRB) – High-quality U.S. specialty insurer

 Each company has a distinct business model. Accordingly, this analysis is intentionally high level and focused on the metrics most relevant to P/C insurers.

---

 

Measuring Performance: A Six-Year View 

 

(Dec 31, 2019 to Dec 31, 2025)

 

Buffett has often suggested that five years is a reasonable timeframe for evaluating management performance. We extend the window slightly to six years to reduce distortions caused by Covid-era volatility.

 

Performance Metrics Used

 

For decades, Buffett relied on growth in book value per share as Berkshire’s primary yardstick. In 2018, he pivoted to a simpler measure: change in share price.

 

We use both approaches:

• Change in BVPS + dividends
• Total shareholder return (TSR): share price appreciation + dividends

 Together, these provide a practical framework for evaluating how effectively management compounds shareholder capital over time.

---

 

Overview of the Process

 

Step 1: Review Past Performance

 

Relative vs. peers

• Change in BVPS + dividends
• Total shareholder return (share price + dividends)

Absolute vs. the market

• Comparison to S&P 500 total return

Step 2: Examine Valuation

• Price-to-book value (P/BV)
• Price-to-earnings (P/E)

Step 3: Connect the Dots

• Does valuation align with performance?
• What can we learn from any disconnect?
• Does this warrant further study?

---

 

Past Performance Analysis

 

1) Change in Book Value Per Share + Dividends

 

Book value per share (BVPS) growth has long been a core metric for evaluating P/C insurers. It measures how fast shareholder capital is compounding.

• BVPS captures retained value
• Dividends represent value distributed
• Both matter

6-Year Results (2020–2025):

• Fairfax ranks #1 among peers
• BVPS + dividend growth: +173%
• CAGR: 18.2%

The outperformance is material. There is a wide divergence across the group, with Travelers (9.4% CAGR) and Chubb (9.3% CAGR) at the lower end.

 

---

 

An Important Adjustment: Economic vs. Accounting Performance

 

BVPS captures accounting results. What really matters is economic performance.

 

BVPS is a strong proxy for traditional insurers. But it becomes less complete for companies with large associate and consolidated equity holdings—such as Berkshire, Markel, and Fairfax—where capital is compounding in ways not fully captured in reported book value.

 

This creates a form of “hidden value.”

 

As a result:

• BVPS + dividends understate the true performance of these companies.
• The gap between accounting value and economic value is growing over time.

Investors need to keep this in mind when interpreting results.

---

 

A Simpler Approach

 

In 2018, Buffett moved away from BVPS as Berkshire’s primary performance measure and instead emphasized share price performance (total shareholder return, as Berkshire does not pay a dividend).

 

The logic was straightforward: as Berkshire evolved, book value became a less reliable proxy for intrinsic value (that “hidden value” thing). Over time, the share price did a better job reflecting economic reality.

 

Charlie Munger captured the essence of this idea:

 

 "Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns." Charlie Munger - Wesco Financial AGM – 1994

 

Over long periods, TSR cuts through differences in accounting, capital structures, and business models, providing a clean, comparable outcome metric.

---

 

Absolute Performance Benchmark

 

Using TSR also allows comparison to the broader market.

 

S&P 500 Total Return (2020–2025):

• CAGR: 15.1%

This provides a useful absolute yardstick.

---

 

2) Total Shareholder Return (TSR)

 

TSR includes:

• Share price appreciation
• All dividends paid (including special dividends)

Results (2020–2025):

• Fairfax ranks #1 again
• Total return: +322%
• CAGR: 27.1%

Only two companies beat the S&P 500 total return over the period:

• Fairfax
• W.R. Berkley

 Most peers delivered respectable mid-teens returns. Fairfax’s performance, by contrast, has been exceptional—dramatically outpacing both the market and the peer group.

 

---

 

Keep going to read Part 2 (the next post). 

Edited February 16 by Viking