POOR INVESTMENT RETURNS SWING FAIRFAX TO Q1 LOSS

Canadian insurer/reinsurer Fairfax Financial Holdings swung to a Q1 net loss of $60.4m from year-earlier net earnings of $631.8m, largely reflecting deterioration in total investment returns to a loss of $153m from Q1 2008 gains of $1.07bn. The poor investment returns offset a positive quarter for the group’s p/c operations, where underwriting income jumped to $15.1m from $2.8m on earned premiums of $1.12bn, up 0.2%. The group’s consolidated combined ratio improved to 98.7% from 99.7%. The group’s Odyssey Re affiliate saw underwriting income jump to $16.3m from $7.8m, as its combined ratio improved two full points to 96.5%. US p/c unit Crum & Forster swung to an underwriting gain of $400,000 from a year-earlier loss of $22.7m, as its combined ratio improved to 99.8% from 108.3%, and Canadian p/c unit Northbridge swung to an underwriting loss of $4.1m from a gain of $10.1m, as its combined ratio rose to 101.8% from 96.4%. Chairman and chief executive Prem Watsa said that Fairfax has “maintained our disciplined underwriting standards” but warned that market volatility “may result in lumpy quarters and even years”.