Fairfax Financial Holdings Ltd. says its third-quarter earnings tripled to $973.9-million (U.S.) as gains on its investments increased even as stock markets around the world plummeted.
The Toronto-based company said Thursday the profit amounts to $46.73 per diluted share, compared with $388.1-million, or $18.44 per share, in the third quarter of 2010.
Fairfax said the improved profit was largely due to net gains on investments of $1.588-billion, significantly higher than the $316.4-million net gain a year ago.
“Our results have always been lumpy and our third quarter earnings are a case in point,” said Prem Watsa, chairman and chief executive officer of Fairfax.
“We earned almost a billion dollars in spite of significant catastrophe activity in the quarter because of almost $1.6-billion in net gains on our investment portfolio.”
Excluding acquisitions, the insurance and investment company’s net premiums written grew by 21 per cent to $1.43-billion from $1.178.1-billion in the third quarter of 2010.
However, Fairfax noted it continues to be “very concerned” about the economic outlook for the next few years, adding that it would maintain its hedging strategy to offset stock market volatility.
The company’s insurance and reinsurance business produced an underwriting loss of $105.3-million during the quarter, compared to a loss of $13.3-million a year ago.
The larger loss was largely due to $171.7-million pre-tax catastrophe losses related to Hurricane Irene, flooding in Denmark and the Japanese earthquake.
During the quarter, the company bought William Ashley China a Toronto-based tableware and gift retailer, saying that the purchase was consistent with its strategy to acquire businesses from entrepreneurial founders.
Through its subsidiaries, Fairfax is principally engaged in property and casualty insurance and reinsurance and associated investment management.Report Typo/Error
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