In their financial results for the first quarter of 2025, Fairfax Financial Holdings has reported net earnings of $945.7 million, which compares to the $776.5 million seen in the first quarter of 2024.

The company attributed its strong performance mainly to increased net gains on investments, partially offset by decreased adjusted operating income of $685.5 million (2024 – $977.1 million).

Fairfax’s gross premiums written also experienced an increase, rising at $8,474.0 million in Q1 2025, compared to the $8,056.3 million reported in the same period last year. Net premiums written and net insurance revenue also saw some growth in the quarter, to $6,843.1 million and $6,153.0 million, respectively.

Q1 2025 also experienced net premiums written by the property and casualty (P&C) insurance and reinsurance operations growth, by 8.4% to $6,774.6 million from $6,249.3 million in Q1 2024.

The 5.0% growth in GWP was largely fuelled by consistent expansion across most operating companies, alongside reinstatement premiums related to the California wildfires.

GWP was partially offset by a decrease at Gulf Insurance that reflected the non-renewal of a significant health insurance contract for retired citizens in the third quarter of 2024 which had been experiencing diminishing underwriting profitability.

Despite the increased current period catastrophe losses of $781.3 million primarily from the California wildfires, Fairfax’s P&C insurance and reinsurance operations produced underwriting profit of $96.9 million.

This resulted in an undiscounted combined ratio of 98.5%, compared to an underwriting profit of $373.0 million and a combined ratio of 93.6% in Q1 2024, which included more modest catastrophe losses of $101.4 million.

Adjusted operating income of the P&C insurance and reinsurance operations decreased to $685.5 million from $977.1 million, principally reflecting decreased underwriting profit as a result of the California wildfires. The company also recorded net favourable prior year reserve development, with a benefit of $219.1 million (2024 – $29.9 million).

“In the first quarter of 2025 our property and casualty insurance and reinsurance operations produced adjusted operating income of $685.5 million (or operating income of $945.5 million including the benefit of discounting, net of a risk adjustment on claims), including California wildfire losses of $692.1 million and reflecting continued strong interest and dividend income,” Prem Watsa, Chairman and Chief Executive Officer, commented.

Addine: “Despite the significant current period catastrophe losses of $781.3 million primarily from the California wildfires, our property and casualty insurance and reinsurance companies reported a consolidated combined ratio of 98.5% and consolidated underwriting profit of $96.9 million, on an undiscounted basis. Gross and net premiums written grew by 5.0% and 8.4%, reflecting new business and continued incremental rate increases in certain lines of business.

“Net gains on investments of $1,056.1 million in the quarter was principally comprised of net gains on common stocks of $779.5 million and mark to market gains on bonds of $388.4 million.

“We remain focused on being soundly financed and ended the quarter with approximately $2.1 billion of cash and marketable securities and an additional $1.7 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company.”

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