FAIRFAX RESHAPES BRIT INVESTMENT PORTFOLIO

Canadian financial services giant Fairfax is reshaping the investment portfolio of Lloyd’s operation Brit following last month’s completion of the deal to acquire the insurer. In an earnings call following Fairfax’s announcement of a third quarter loss of $185.7m, chairman and chief executive Prem Watsa explained how any changes to Brit’s investment portfolio are geared towards removing credit risk. “We are very sensitive to credit spreads,” he said. “So we have reduced and eliminated credit risk in that portfolio. “With some fund managers, it can take a few months before you can get your money back. But by the end of the year we will see very little credit risk in that portfolio. We have around 25% cash in our portfolio, and over time the Brit portfolio will be very similar to our portfolio. “ Fairfax’s investment portfolio endured a difficult first half to 2015, with investment losses of $661.2m being the main driver of the company slipping to a loss in the second quarter. Unrealized losses on bonds of $677.2m were attributed to rising interest rates.