The Fairfax Family
Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Fairfax’s corporate objective is to achieve a high rate of return on invested capital and build long-term shareholder value. The company has been under current management since 1985. Fairfax is listed on The Toronto Stock Exchange and trades in Canadian dollars under the symbol FFH and U.S. dollars under the symbol FFH.U.
Fairfax owns the following entities:
Northbridge, based in Toronto, provides property and casualty insurance products through its Commonwealth, Federated, Lombard and Markel subsidiaries, primarily in the Canadian market as well as in selected U.S. markets. Northbridge is the largest commercial property and casualty insurance group in Canada with annual premiums of approximately $1.5 billion. In 2009, net premiums written were Cdn$1,054.4 million. At year-end, the company had shareholders’ equity of Cdn $1,410.6 million and there were 1,622 employees.
Crum & Forster (C&F)
Based in Morristown, New Jersey, is a national commercial property and casualty insurance company in the United States writing a broad range of commercial coverages. Its subsidiary Seneca Insurance provides property and casualty insurance to small businesses and certain specialty coverages. Since January 1, 2006, the specialty niche property and casualty and accident and health insurance business formerly carried on by Fairmont Insurance is being carried on as the Fairmont Specialty division of C&F. In 2009, C&F’s net premiums written were US$716.4 million. At year-end, the company had statutory surplus of US$1,628.2 million (shareholders’ equity of US$1,517.7 million on a US GAAP basis) and there were 1,345 employees.
Based in Singapore, First Capital writes property and casualty insurance primarily to Singapore markets. In 2009, First Capital’s net premiums written were SGD131.6 million (approximately SGD1.4 = US$1). At year-end, the company had shareholders’ equity of SGD262.7 million and there were 93 employees.
Based in Hong Kong, Falcon writes property and casualty insurance to niche markets in Hong Kong. In 2009, Falcon’s net premiums written were HK$288.9 million (approximately HK$7.8 = US$1). At year-end, the company had shareholders’ equity of HK$452.8 million and there were 89 employees.
Based in Stamford, Connecticut, Odyssey underwrites treaty and facultative reinsurance as well as specialty insurance business, with principal locations in the United States, Toronto, London, Paris, Singapore and Latin America. In 2009, OdysseyRe’s net premiums written were US$1,893.8 million. At year-end, the company had statutory surplus of US$3,512.8 million (shareholders’ equity of US$3,555.2 million on a US GAAP basis) and there were 721 employees.
Based in the UK, Advent is a reinsurance and insurance company operating through syndicates 780 and 3330 at Lloyd’s, focused on specialty property reinsurance and insurance risks. In 2009, Advent’s net premiums written were US$277.0 million. At year-end, the company had shareholders’ equity of US$165.6 million and there were 52 employees.
Polish Re, based in Warsaw, Poland, writes reinsurance business in the central and Eastern European regions. In 2009, Polish Re’s net premiums written were PLN244.4 million (approximately PLN2.9 = US$1). At year-end, the company had shareholders’ equity of PLN233.7 and there were 41 employees.
Group Re primarily constitutes the participation by CRC (Bermuda) and Wentworth (based in Barbados) in the reinsurance of Fairfax’s subsidiaries by quota share or through participation in those subsidiaries’ third party reinsurance programs on the same terms and pricing as the third party reinsurers. In 2009, its net premiums written were US$263.7 million. At year-end, these companies had combined shareholders’ equity of US$332.7 million.
The runoff business comprises the U.S. runoff group and the European runoff group. The U.S. runoff group consists of the company resulting from the December 2002 merger of TIG and International Insurance and the Fairmont legal entities placed in runoff on January 1, 2006. At year-end, the merged U.S. company had shareholders’ equity of US$1,110.5 million (statutory surplus of US$750.4 million). The European runoff group consists of RiverStone Insurance UK and nSpire Re. At year-end, this group had combined shareholders’ equity (including amounts related to nSpire Re’s financing of Fairfax’s U.S. insurance and reinsurance companies) of US$1,225.9 million.
The Resolution Group (TRG) and the RiverStone Group (run by TRG management) manages the U.S. and the European runoff groups. At year-end, TRG/RiverStone had 165 employees in the U.S., located primarily in Manchester, New Hampshire, and 58 employees in its offices in the United Kingdom.
Founded in 1984 and based in Toronto, provides investment management to the insurance, reinsurance and run-off subsidiaries of Fairfax.
- The foregoing lists all of Fairfax’s operating subsidiaries. The Fairfax corporate structure also includes a 26.0% interest in ICICI Lombard (an Indian property and casualty insurance company), a 24.9% interest in Falcon Thailand, an approximate 20% interest in Arab Orient Insurance (a Jordanian company), an approximate 20% interest in Alliance Insurance (a Dubai, U. A. E. company), and investments in Advent (66.6%), Cunningham Lindsey (45.7%) and Ridley (67.9%). The other companies in the Fairfax corporate structure, principally investment or intermediate holding companies (including companies located in various jurisdictions outside North America), are not part of these operating groups; these other companies had no insurance, reinsurance, run-off or other operations.
- Early in 2010, Fairfax announced an agreement to acquire Zenith National Insurance for $38 per share. The acquisition was unanimously approved by Zenith’s Board of Directors, and all of the directors and executives of Zenith have agreed to vote their shares in favor of the acquisition. The acquisition is subject to approval by Zenith’s shareholders and regulators.