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1. Company Snapshot

1.a. Company Description

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally.The company operates through Insurance and Reinsurance, Run-off, and Non-Insurance Companies segments.It insures against losses to property from fire, explosion, earthquake, windstorm, flood, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance.


The company also offers workers' compensation, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products.In addition, it retails home improvement goods, toys and baby products, golf equipment, sports apparel and accessories, housewares and home décors, and tableware and gifts; invests in retail business; and owns and operates holiday resorts.Further, the company provides integrated travel and travel-related financial services; originates, processes, and distributes pulses and staple foods; creates, produces, and distributes entertainment content; and provision of pet medical insurance and database services, as well as media and marketing solutions.


The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987.Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

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1.b. Last Insights on FFH

Fairfax Financial Holdings' recent performance was driven by a strong first quarter earnings release, where the company reported a 17% year-over-year revenue growth to $9.43 billion. The earnings per share (EPS) also beat expectations, indicating a robust financial performance. Additionally, the company has successfully completed a senior notes offering, raising $900 million to refinance and redeem outstanding debt, equity, or other corporate obligations. This strategic move is expected to enhance the company's financial flexibility and reduce its debt burden.

1.c. Company Highlights

2. Fairfax's Q3 Earnings Shine with Strong Underwriting and Investment Income

Fairfax Financial Holdings reported a robust third quarter with net earnings of $1.2 billion, up from $1 billion in the same period last year. The company's operating income from insurance and reinsurance companies adjusted to an undiscounted basis and before risk margin was $1.3 billion, up from $1.1 billion. The interest and dividend income was $655 million, a 7.5% year-over-year increase. Earnings per share (EPS) came in at $52.04, in line with analyst estimates. The company's underwriting income was strong at $540 million, with a combined ratio of 92%, indicating a profitable underwriting business.

Publication Date: Nov -08

📋 Highlights

Insurance Operations Drive Profitability

The insurance operations had a standout quarter, with a combined ratio of 92% and an underwriting profit of $540 million. All insurance segments produced underwriting profit, with global insurers and reinsurers achieving a combined ratio of 91.3% and underwriting profit of $326 million. North American insurers also performed well, with a combined ratio of 93%, led by Northbridge with a combined ratio of 86.9%. The company's gross premium written in the third quarter was $8.2 billion, slightly down from the same period last year.

Investment Portfolio Performs Well

The investment portfolio delivered a solid quarter, with a consolidated investment return of 1.9% and net gains on investments of $426 million. The fixed income investments ended the quarter at $50.9 billion with an average yield of 5.1%. The equity accounted associates and privately owned companies ended Q3 at $11.8 billion, driven by the performance of Eurobank, Poseidon, and Recipe.

Non-Insurance Companies Contribute to Growth

The non-insurance company results reported operating income of $211 million in the third quarter of 2025, primarily reflecting the acquisition of Sleep Country and the consolidation of Peak Achievement. The company's non-insurance segment performed well in the first 9 months of 2025, driven by higher margins at AGT and higher business volumes at Grivalia Hospitality.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 1.32, the market is pricing in a relatively modest premium for Fairfax's book value. The company's Return on Equity (ROE) of 18.64% suggests a strong ability to generate profits from its equity base. Analysts estimate revenue growth of 4.1% for next year, indicating a stable outlook for the company. Given the company's strong underwriting profitability and investment income, Fairfax appears well-positioned for continued success.

3. NewsRoom

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Fairfax Announces Quarterly Dividend on Series I, J And K Preferred Shares

Dec -01

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TSX Down 140 Points at Midday With Info Tech The Worst Performer

Dec -01

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Fairfax Announces Intention to Redeem Cumulative Preferred Shares, Series I & J

Nov -28

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Is There Now an Opportunity in Fairfax Financial After Shares Jump 22% in 2025?

Nov -28

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Fairfax buys MW Eat with plans for expansion

Nov -26

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The inside story of Fairfax Financial's even bigger 'Big Short'

Nov -21

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Emirates NBD stays in IDBI Bank bidding despite $3bn RBL Bank deal – report

Nov -14

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Prem Watsa's Strategic Moves: BlackBerry Ltd Sees a -1.32% Portfolio Impact

Nov -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.14%)

6. Segments

property and casualty insurance and reinsurance - global insurers and reinsurers

Expected Growth: 6.5%

Fairfax Financial Holdings' growth in property and casualty insurance and reinsurance services is driven by increasing demand for risk management, expansion into emerging markets, and strategic acquisitions, leading to a forecast CAGR of 6.5%.

property and casualty insurance and reinsurance - international insurers and reinsurers

Expected Growth: 5.2%

Fairfax Financial Holdings Limited's international property and casualty insurance and reinsurance benefits from increasing global demand for risk management, low interest rates, and growth in emerging markets, driving a 5.2% CAGR forecast.

property and casualty insurance and reinsurance - north american insurers

Expected Growth: 4.5%

Fairfax Financial Holdings Limited’s North American property and casualty segment growth is driven by increasing demand for insurance products, consolidation in the industry, and the company’s strategic acquisitions, which will continue to fuel growth.

Non-Insurance Companies

Expected Growth: 8.3%

Fairfax's non-insurance companies, such as retail and manufacturing, are expected to grow driven by strategic acquisitions, expansion into emerging markets, and increased demand for products, contributing to a forecast CAGR of 8.3%.

Corporate and Other

Expected Growth: 5.4%

Fairfax Financial Holdings Limited's corporate and other operations are driven by strategic investments and divestitures, contributing to growth. The company's diversified business segments, including insurance, reinsurance, and investment management, also support growth.

Life Insurance and Run-Off

Expected Growth: 5.6%

Fairfax Financial Holdings' life insurance and run-off management benefits from increasing demand for insurance products, growth in emerging markets, and strategic acquisitions, driving revenue growth

Eliminations and Adjustments

Expected Growth: 4.3%

Fairfax Financial Holdings' growth is driven by its strong reinsurance business, diversified portfolio, and strategic acquisitions, which are expected to contribute to its profitability and revenue growth.

7. Detailed Products

Insurance

Fairfax Financial Holdings Limited offers a range of insurance products, including property, casualty, and specialty insurance, to individuals, businesses, and governments.

Reinsurance

Fairfax Financial Holdings Limited provides reinsurance products to other insurance companies, helping them manage risk and increase capacity.

Investments

Fairfax Financial Holdings Limited invests in a diversified portfolio of stocks, bonds, and other securities to generate returns and support its insurance operations.

Run-off Operations

Fairfax Financial Holdings Limited manages and resolves legacy insurance liabilities, providing a cost-effective solution for companies seeking to exit the insurance market.

Retail and Commercial Banking

Fairfax Financial Holdings Limited offers retail and commercial banking services, including loans, deposits, and credit cards, to individuals and businesses.

8. Fairfax Financial Holdings Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Fairfax Financial Holdings Limited operates in the financial services industry, which is characterized by a moderate threat of substitutes. While there are alternative financial products and services available, the company's diversified portfolio and strong brand recognition mitigate the threat of substitutes.

Bargaining Power Of Customers

Fairfax Financial Holdings Limited's customers have limited bargaining power due to the company's diversified product offerings and strong market position. The company's ability to provide a range of financial services and products reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Fairfax Financial Holdings Limited's suppliers have a moderate level of bargaining power. While the company relies on a network of suppliers for its operations, it has a diversified supply chain and is not heavily dependent on any single supplier.

Threat Of New Entrants

The threat of new entrants in the financial services industry is low due to the high barriers to entry, including regulatory requirements and the need for significant capital investments. Fairfax Financial Holdings Limited's established market position and brand recognition also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. Fairfax Financial Holdings Limited faces intense rivalry from other financial institutions, which can lead to pricing pressures and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 32.00%
Debt Cost 5.48%
Equity Weight 68.00%
Equity Cost 8.20%
WACC 7.33%
Leverage 47.05%

11. Quality Control: Fairfax Financial Holdings Limited passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Fairfax Financial Holdings

A-Score: 7.2/10

Value: 7.5

Growth: 6.9

Quality: 7.9

Yield: 2.0

Momentum: 9.0

Volatility: 9.7

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Manulife

A-Score: 7.0/10

Value: 6.9

Growth: 3.9

Quality: 6.7

Yield: 9.0

Momentum: 6.0

Volatility: 9.7

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Cincinnati Financial

A-Score: 6.7/10

Value: 5.4

Growth: 6.4

Quality: 7.8

Yield: 4.0

Momentum: 7.5

Volatility: 9.0

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Progressive

A-Score: 6.4/10

Value: 5.6

Growth: 8.4

Quality: 7.0

Yield: 4.0

Momentum: 4.5

Volatility: 9.0

1-Year Total Return ->

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Intact Financial

A-Score: 6.4/10

Value: 4.6

Growth: 6.7

Quality: 7.6

Yield: 4.0

Momentum: 5.5

Volatility: 10.0

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Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2321.37$

Current Price

2321.37$

Potential

-0.00%

Expected Cash-Flows