(Note: All dollar amounts in this news release are expressed in U.S. dollars except as otherwise noted. The financial results are derived from unaudited interim consolidated financial statements for the three months ended March 31, 2024 prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). This news release contains certain non-GAAP and other financial measures, including underwriting profit (loss), adjusted operating income (loss), combined ratio (both discounted and undiscounted), book value per basic share, total debt to total capital ratio excluding non-insurance companies and excess (deficiency) of fair value over carrying value, that do not have a prescribed meaning under IFRS Accounting Standards and may not be comparable to similar financial measures presented by other issuers. See "Glossary of non-GAAP and other financial measures" in the company's Interim Report for the three months ended March 31, 2024.) TORONTO, May 02, 2024 (GLOBE NEWSWIRE) -- Fairfax Financial Holdings Limited (TSX:FFH) announces net earnings of $776.5 million ($30.82 net earnings per diluted share after payment of preferred share dividends) in the first quarter of 2024, primarily reflecting increased adjusted operating income of $977.1 million. Book value per basic share at March 31, 2024 was $945.44 compared to $939.65 at December 31, 2023 (an increase of 2.3% adjusted for the $15 per common share dividend paid in the first quarter of 2024). "In the first quarter of 2024 our property and casualty insurance and reinsurance operations produced adjusted operating income of $977.1 million up from $843.0 million in the first quarter of 2023 (or operating income of $1,415.5 million (2023 - $1,309.3 million) including the benefit of discounting, net of a risk adjustment on claims), primarily reflecting increased interest and dividends and strong core underwriting performance. All of our insurance and reinsurance reporting segments continued to achieve undiscounted combined ratios below 100% for a consolidated combined ratio of 93.6% and consolidated underwriting profit of $373.0 million, both on an undiscounted basis. Gross premiums written grew by 12.8% and net premiums written grew by 11.2%, reflecting the acquisition of Gulf Insurance, which added $649.5 million in gross premiums written and $334.0 million in net premiums written. Excluding Gulf Insurance gross premiums written were up 3.6% and net premiums written were up 5.3%. "Net losses on investments of $58.5 million in the quarter was principally comprised of mark to market losses on bonds of $318.8 million due to continued rising interest rates, which were largely offset by mark to market gains on common stocks of $275.1 million. "We remain focused on being soundly financed, and with our recent $1 billion 30-year debt issuance we ended the quarter with approximately $2.5 billion in cash and marketable securities in the holding company (excluding investments in associates and consolidated non-insurance companies of $1.7 billion owned by the holding company)," said Prem Watsa, Chairman and Chief Executive Officer. The table below presents the sources of the company's net earnings in a segment reporting format which the company has consistently used as it believes it assists in understanding Fairfax:     First quarter     2024     2023     ($ millions) Gross premiums written   8,056.3     7,138.5   Net premiums written   6,301.0     5,663.1   Net insurance revenue   6,087.1     5,159.9             Sources of net earnings         Operating income - Property and Casualty Insurance and Reinsurance:         Insurance service result:         North American Insurers   287.7     275.8   Global Insurers and Reinsurers   642.0     625.3   International Insurers and Reinsurers   107.8     76.6   Insurance service result   1,037.5     977.7   Other insurance operating expenses   (226.1 )   (197.6 )     811.4     780.1   Interest and dividends   500.5     311.5   Share of profit of associates   103.6     217.7   Operating income - Property and Casualty Insurance and Reinsurance   1,415.5     1,309.3   Operating income - Life insurance and Run-off   22.9     3.4   Operating income (loss) - Non-insurance companies   17.3     (0.6 ) Net finance expense from insurance contracts and reinsurance contract assets held   (166.0 )   (163.4 ) Net gains (losses) on investments   (58.5 )   771.2   Interest expense   (151.5 )   (124.3 ) Corporate overhead and other   (23.6 )   (26.5 ) Earnings before income taxes   1,056.1     1,769.1   Provision for income taxes   (286.4 )   (365.1 ) Net earnings   769.7     1,404.0             Attributable to:         Shareholders of Fairfax   776.5     1,250.0   Non-controlling interests   (6.8 )   154.0       769.7     1,404.0   The table below presents the insurance service result for the property and casualty insurance and reinsurance operations reconciled to underwriting profit, a key performance measure used by the company and the property and casualty industry in which it operates. The reconciling adjustments are (i) other insurance operating expenses as presented in the consolidated statement of earnings, (ii) the effects of discounting of losses and ceded losses on claims recorded in the period, and (iii) the effects of the risk adjustment and other, which are presented in insurance service expenses and recoveries of insurance service expenses.     First quarter     2024     2023     ($ millions) Insurance service result   1,037.5     977.7   Other insurance operating expenses   (226.1 )   (197.6 ) Discounting of losses and ceded losses on claims recorded in the period   (366.3 )   (422.4 ) Changes in the risk adjustment and other   (72.1 )   (43.9 ) Underwriting profit   373.0     313.8   Interest and dividends   500.5     311.5   Share of profit of associates   103.6     217.7   Adjusted operating income - Property and Casualty Insurance and Reinsurance   977.1     843.0   Highlights for the first quarter of 2024 (with comparisons to the first quarter of 2023 except as otherwise noted, and excluding the effects of IFRS 17 when discussing the combined ratio and adjusted operating income) include the following: Net premiums written by the property and casualty insurance and reinsurance operations increased 11.2% to $6,249.3 million from $5,619.4 million, while gross premiums written increased by 12.8%, primarily reflecting the consolidation of Gulf Insurance on December 26, 2023 that contributed $334.0 million to net premiums written and $649.5 million to gross premiums written in 2024, continued growth across most operating companies, partially offset by decreases at Odyssey Group (principally reflecting the non-renewal of a significant quota share contract which contributed nominal underwriting profit and decreased U.S. crop insurance). The consolidated undiscounted combined ratio of the property and casualty insurance and reinsurance operations was 93.6%, producing an underwriting profit of $373.0 million, compared to an undiscounted combined ratio of 94.0% and an underwriting profit of $313.8 million in 2023, driven by decreased catastrophe losses of $101.4 million or 1.7 combined ratio points in the quarter, partially offset by a higher underwriting expense ratio due to investments in personnel and technology to support continued growth in business volumes. Adjusted operating income (which excludes the benefit of discounting, net of a risk adjustment on claims) of the property and casualty insurance and reinsurance operations increased by 15.9% to $977.1 million from $843.0 million, principally due to increased interest and dividends and strong underwriting profit. The company recorded a total net benefit of $273.0 million related to IFRS 17, which was comprised of a net benefit of $439.0 million from discounting losses and ceded losses on claims recorded in the period, net of changes in risk adjustment and other, partially offset by net finance expense from insurance contracts and reinsurance contract assets held of $166.0 million (which included interest accretion from unwinding the effects of discounting associated with net losses on claim payments made of $358.3 million, partially offset by the benefit of modest increases in discount rates during the period on prior year net losses on claims of $192.3 million). The benefit of the effect of increases in discount rates on prior year net losses on claims of $192.3 million partially offset net losses recorded on the company's bond portfolio of $318.8 million. Consolidated interest and dividends increased significantly from $382.3 million to $589.8 million (comprised of interest and dividends of $500.5 million (2023 - $311.5 million) earned by the investment portfolios of the property and casualty insurance and reinsurance operations, with the remainder earned by life insurance and run-off, non-insurance companies and corporate and other). At March 31, 2024 the company's insurance and reinsurance companies held portfolio investments of $60.7 billion (excluding Fairfax India's portfolio of $2.0 billion), of which $7.8 billion was in cash and short term investments representing 12.9% of those portfolio investments. During the first quarter of 2024 the company used net proceeds from sales and maturities of U.S. treasuries to purchase cash equivalent U.S. treasury bills, $374.3 million of other government bonds and $140.0 million of short-dated first mortgage loans. Consolidated share of profit of associates of $127.7 million principally reflected share of profit of $79.3 million from Eurobank, $36.0 million from EXCO Resources and $34.8 million from Poseidon, partially offset by share of loss of $28.6 million from Helios Fairfax Partners. Net losses on investments of $58.5 million consisted of the following:   First quarter of 2024   ($ millions)   Realized gains (losses)   Unrealized gains (losses)   Net gains (losses) Net gains (losses) on:           Equity exposures 514.7   (239.6 )   275.1   Bonds 18.9   (337.7 )   (318.8 ) Other 61.8   (76.6 )   (14.8 )   595.4   (653.9 )   (58.5 ) Net losses on bonds of $318.8 million principally reflected net losses of $266.6 million on U.S. treasuries. Net gains on equity exposures of $275.1 million principally reflected a net gain of $330.6 million on the company's continued holdings of equity total return swaps on 1,964,155 Fairfax subordinate voting shares with an original notional amount of $732.5 million (Cdn$935.0 million) or $372.96 (Cdn$476.03) per share. The company's fixed income portfolio is conservatively positioned with effectively 70% of the fixed income portfolio invested in government bonds and 20% in high quality corporate bonds, primarily short-dated. At March 31, 2024 the excess of fair value over carrying value of investments in non-insurance associates and consolidated non-insurance subsidiaries was $1,185.6 million. On March 22, 2024 the company completed an offering of $1.0 billion principal amount of 6.350% unsecured senior notes due 2054. The company's total debt to total capital ratio, excluding non-insurance companies, increased to 24.4% at March 31, 2024 compared to 23.1% at December 31, 2023, principally reflecting the issuance of senior notes due 2054. During the first quarter of 2024 the company purchased 240,734 of its subordinate voting shares for cancellation at an aggregate cost of $260.3 million. At March 31, 2024 there were 22,831,173 common shares effectively outstanding. Consolidated balance sheet, earnings and comprehensive income information, together with segmented premium and combined ratio information, follow and form part of this news release. As previously announced, Fairfax will hold a conference call to discuss its first quarter 2024 results at 8:30 a.m. Eastern time on Friday May 3, 2024. The call, consisting of a presentation by the company followed by a question period, may be accessed at 1 (888) 390-0867 (Canada or U.S.) or 1 (212) 547-0141 (International) with the passcode "FAIRFAX". A replay of the call will be available from shortly after the termination of the call until 5:00 p.m. Eastern time on Friday, May 17, 2024. The replay may be accessed at 1 (866) 361-4943 (Canada or U.S.) or 1 (203) 369-0191 (International). Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. For further information, contact:  John Varnell   Vice President, Corporate Development   (416) 367-4941 CONSOLIDATED BALANCE SHEETSas at March 31, 2024 and December 31, 2023(US$ millions except per share amounts)     March 31, 2024 December 31, 2023 Assets             Holding company cash and investments (including assets pledged for derivative obligations – $240.1; December 31, 2023 – $197.7)   2,496.4       1,781.6   Insurance contract receivables   811.0       926.1                 Portfolio investments             Subsidiary cash and short term investments (including restricted cash and cash equivalents – $456.3; December 31, 2023 – $637.0)   7,801.6       7,165.6   Bonds (cost $36,213.2; December 31, 2023 – $36,511.9)   36,131.2       36,850.8   Preferred stocks (cost $892.7; December 31, 2023 – $898.3)   2,436.5