Prem WATSA, Chair and Chief Executive Officer at FAIRFAX, explained:
"These are unprecedented turbulent times and we wanted to provide our shareholders with preliminary indications of some key developments for Fairfax's first quarter of 2020 financial results. Our insurance companies continued to have strong underwriting performance in the first quarter of 2020 with a consolidated combined ratio below 100%, favorable reserve development and strong growth in gross premiums written of approximately 12%. Net losses on investments currently estimated at approximately USD 1.5 billion primarily reflects unrealized losses in the fair value of our common stock and bond portfolio from the sudden shock of COVID-19 and reverses a significant amount of the USD 1.7 billion net gains on investments we reported in 2019."
The groups' press release states that Fairfax's insurance companies continued to have strong underwriting performance in1Q2020, with the consolidated combined ratio of its insurance and reinsurance operations below 100% and continued strong reserving, which will result in solid operating income during the quarter. Fairfax is fortunate to have its insurance businesses remain open, capitalizing on its past technology investments.
The Group reoriented its investment policy toward financial instruments providing for higher yields and also took a series of other financial measures to mitigate the negative impact of the COVID - 19 pandemic.
"We remain focused on continuing to be soundly financed and have drawn on our credit facility solely to ensure that we maintain high levels of liquid assets during these uncertain times. Fairfax had approximately USD 2.5 billion in cash and marketable securities in its holding company at March 31, 2020," added WATSA.
The key financial information for the first quarter of 2020 are based on preliminary indications and current estimates, but recognizing that the preparation of the Company's first quarter financial statements is not finalized.
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