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Investing.com -- Moody’s Ratings has affirmed Fairfax Financial Holdings Limited’s Baa2 senior unsecured debt rating while changing the outlook to positive from stable, the rating agency announced Wednesday.
The positive outlook reflects Fairfax’s consistent underwriting earnings and good risk-adjusted capital, according to Moody’s.
The rating agency also affirmed the A2 insurance financial strength (IFS) ratings of Odyssey Reinsurance Company and Allied World Assurance Company Holdings subsidiaries with a positive outlook. Additionally, Moody’s affirmed the A3 IFS ratings of Crum & Forster and Northbridge General Insurance Corporation with a positive outlook.
Zenith Insurance Company and ZNAT Insurance Company maintained their A3 IFS ratings with a stable outlook.
Fairfax, which ranks among the 15 largest global property and casualty reinsurers based on premiums, reported net income of $2.6 billion for the first six months of 2025, up from $1.8 billion in the same period last year. The increase primarily reflected higher net investment gains, partially offset by losses from California wildfires in early 2025.
The group posted an undiscounted combined ratio of 95.9% for the first half of 2025, which included 7.4 points of catastrophe losses. This represented an increase from 93.7% during the prior year period, which included 2.2 points of catastrophe losses.
As of June 30, 2025, Fairfax’s financial leverage was approximately 33.5%, similar to year-end 2024 levels. After adjusting for non-recourse debt of non-insurance companies, financial leverage was about 27%. The company held $3.0 billion in cash and investments at the holding company level.
Moody’s noted that Fairfax’s strengths include diversified insurance and reinsurance revenue streams, established market position, solid underwriting profitability, and significant cash holdings. These are balanced by potential earnings volatility from catastrophes, reserving risks in long-tail casualty lines, investment risks including high allocation to common stocks, and significant financial leverage.
The rating agency also highlighted that while Fairfax maintains above-average exposure to high-risk assets, its shift toward high-quality fixed income securities should produce more consistent investment income over the next several years.
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