Fairfax Financial Holdings Ltd ((TSE:FFH)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Fairfax Financial Holdings Ltd’s recent earnings call highlighted a robust financial performance, marked by significant increases in net earnings and strong underwriting results. Despite facing challenges such as a decline in Gulf Insurance premiums and impacts from interest rate changes, the overall sentiment was positive, with the company’s financial strength ratings receiving a boost.
Significant Increase in Net Earnings
Fairfax Financial Holdings Ltd reported a notable increase in net earnings for the third quarter of 2025, reaching $1.2 billion, up from $1 billion in the same quarter of the previous year. For the first nine months of 2025, net earnings totaled $3.5 billion, underscoring the company’s strong financial performance.
Strong Underwriting and Investment Performance
The company achieved an underwriting income of $540 million, with a commendable combined ratio of 92%. Investment performance was also strong, with net gains of $426 million, driven primarily by gains on equity exposures amounting to $525 million.
Increase in Book Value Per Share
Fairfax’s book value per share saw a significant increase of 15.1% for the first nine months of 2025, reaching $1,204 after adjusting for a $15 dividend. This growth reflects the company’s solid financial foundation and strategic management.
Positive Financial Strength Ratings
The financial strength of Fairfax’s core operating companies was recognized with an upgrade to AA- by Standard & Poor’s, while A.M. Best upgraded several subsidiaries to A+. These upgrades reflect confidence in the company’s financial stability and operational performance.
Growth in International Operations
Excluding Gulf Insurance, Fairfax experienced a 10% increase in international premiums, with notable growth in regions such as South Africa (20%), Central and Eastern Europe (11.7%), and Asia (13%). This expansion highlights the company’s successful international strategy.
Decline in Gulf Insurance Premiums
Gulf Insurance experienced a 13% decline in net premiums due to timing issues, which are expected to normalize in the fourth quarter. This temporary setback is anticipated to be resolved, aligning with the company’s overall positive outlook.
Increased Total Debt to Total Capital Ratio
The total debt to total capital ratio rose to 26.5% at the end of Q3 2025, up from 24.8% at the end of 2024. This increase reflects the company’s strategic financial management amidst a challenging economic environment.
Impact of Interest Rate Changes
Interest rate changes led to a net loss of $308 million, affecting insurance and reinsurance contracts and bonds. Despite this challenge, Fairfax’s overall financial performance remained strong.
Forward-Looking Guidance
Looking ahead, Fairfax Financial Holdings Ltd remains optimistic about its financial trajectory. The company reported strong net earnings of $1.2 billion for the third quarter and a total of $3.5 billion for the first nine months of 2025. With a focus on maintaining a robust capital position and exploring growth opportunities in international and investment operations, Fairfax is well-positioned for future success.
In summary, Fairfax Financial Holdings Ltd’s earnings call conveyed a positive outlook, driven by strong net earnings, robust underwriting and investment performance, and strategic international growth. Despite some challenges, the company’s financial strength and strategic focus provide a solid foundation for continued success.