TORONTO – Fairfax Financial Holdings Ltd. (TSX:FFH) has reported first-quarter net earnings that were down by more than two-thirds from a year ago, reflecting the insurer’s improved underwriting results but sharply lower gains on investments.
The Toronto-based property and casualty insurer and investment manager said net income attributable to shareholders in the three months ended March 31 was US$225.2 million or $9.71 per diluted share, down from US$784.6 million or $35.72 per share in the same year-earlier period.
In an earnings report issued after markets closed on Thursday, Fairfax said the combined ratio of the insurance and reinsurance operations was 91.3 per cent on a consolidated basis.
That produced an underwriting profit of US$126.8 million, compared with a combined ratio of 93 per cent and underwriting profit $98.7 million respectively in 2014.
Combined ratio, a measure of profitability of an insurance company, is the sum of incurred losses and operating expenses measured as a percentage of earned premium. A ratio below 100 per cent indicates the company is making an underwriting profit. It does not include income from investments.
Net investment gains were $176.5 million, versus $1 billion in the 2014 period.