Fairfax Financial Holdings Ltd. reported financial results for the first quarter of 2026, with net profit of $695.7 million, compared with $945.7 million in the same period last year.
The company’s property and casualty (P&C) insurance and reinsurance business had adjusted operating income of $1,213.4 million, a significant increase from $685.5 million in the first quarter of 2025.
Fairfax chairman and chief executive Prem Watsa said the results reflected improved underwriting results, an increase in associates’ share of profits and higher interest and dividend income.
Gross written premiums (GWP) increased 4.1% to $8,809.3 million, and net written premiums increased 4.2% to $8,474 million, both reflecting growth at Fairfax International Insurance and Reinsurance.
Fairfax’s property and casualty insurance and reinsurance business’ GWP rose to $8,739.4 million in the quarter. Brit’s GWP is US$810.5 million, Odyssey’s is US$1,524.1 million, Ki’s is US$227.6 million, and Allied World’s is US$2,240.5 million.
Net written premiums in the Property & Casualty and Reinsurance business increased 4.2% to $7,058.0 million from $6,774.6 million.
The growth was primarily attributable to strong performance in the International Insurers and Reinsurers reporting segment, driven primarily by Gulf Insurance’s expansion into medical and motor lines through new business and rate hikes.
In addition, the Global Insurance and Reinsurance segment contributed significantly, reflecting growth in key segments of Allied World and Brit.
Brit’s net premiums for the first quarter of 2026 were US$627.8 million, Odyssey’s US$1,465.4 million, Ki’s US$181.2 million, and Allied World’s US$1,740.5 million.
The company’s property and casualty and reinsurance underwriting profits increased significantly in the first quarter of 2025, from $96.9 million in 2025 to $381.6 million.
Fairfax said this improvement was driven by an improvement in the undiscounted combined ratio, which fell to 94.1% from 98.5% in 2025, mainly due to lower catastrophe losses in the current period ($119.3 million compared with $781.3 million in 2025, the latter mainly due to the California wildfires) and higher business volumes.
This was partially offset by less favorable prior year reserve development of $86.1 million in the first quarter of 2026, compared with $219.1 million of reserve development reported in the same period last year.
In the first quarter of 2026, Fairfax’s Brit combined ratio was 93%, Odyssey’s was 91.1%, Ki’s was 94.7%, and Allied World’s was 93.4%.
CEO Watsa said: “Net investment losses in the first quarter of 2026 were $385.9 million, primarily consisting of mark-to-market losses on bonds of $363.9 million due to rising interest rates. This compared to net investment gains of $1,056.1 million in the first quarter of 2025. As we have stated in the past, we expect our investments to perform well over the long term, but our net income will fluctuate from quarter to quarter.
“During the quarter, we purchased 374,883 subordinate voting shares for cancellation for cash consideration of $631.3 million, or $1,684 per share.
“We expect to complete two major transactions in the second quarter of 2026 – the sale of a 23.1% stake in Poseidon for approximately $1.9 billion, with pre-tax proceeds of approximately $837 million; and the proposed sale of Eurolife Life Operations to Eurobank for approximately $935 million, with pre-tax proceeds of approximately $350 million. We will retain 22.2% ownership of Poseidon.”