FAIRFAX SEES HIGHER H1 INCOME DESPITE Q2 CHARGES

Canadian insurer/reinsurer Fairfax Financial Holdings has posted H1 net income of $659.4m, more than doubling the year-earlier $279m, as investment gains posted during Q1 offset several charges that cut Q2 earnings by 84% to $27.6m. For Q2, Fairfax swung to an underwriting loss of $64.7m from a year-earlier gain of $87.2m, reflecting an $84.2m pre-tax charge for the commutation of a reinsurance agreement by US p/c unit Crum & Forster and a swing to a $72.7m net loss on investments from $190.8m in investment gains last year. Net earned premiums for the quarter fell 1.1% to $1.13bn, while the combined ratio deteriorated to 105.8% from 92.4%. For the six months, investment gains more than doubled to $756.9m from the year-earlier $275.3m, offsetting the swing to an underwriting loss of $72.4m from the year-ago gain of $136.7m. Net earned premiums fell by 1.4% to $2.24bn, as the combined ratio rose to 103.2% from 94%. Fairfax’s Connecticut-based reinsurance affiliate Odyssey Re Holdings saw H1 earnings rise 35% to $317.9m, boosted by net realised investment gains of $368.6m, more than double the year-ago $169.2m. Underwriting income dropped by 71% to $14.6m on earned premiums of $1.03bn, down 2.6%, while the combined ratio rose to 98.6% from 95.2%.