2017 Annual Report - s1.q4cdn.com

1 2017 Annual ReportContentsFairfax Corporate s Letter to s Responsibility for the FinancialStatements and Management s Report onInternal Control over Financial Reporting ..28 Independent Auditor s Report to Consolidated Financial to Consolidated Financial Statements ..39 Management s Discussion and Analysis ofFinancial Condition and Results of Operations123 Appendix Fairfax Guiding Annual ReportFairfax Corporate Performance(in US$ millions, except as otherwise indicated)(1)BookCommonEarningsvalueClos ingNetshare-Shares(loss)pershareearnings TotalInvest-Netholders out-pershareprice(1)Revenue(loss)assetsm entsdebtequity standingshareAs at and for the years ended December 31(2) (3) ( ) ( ) , , , , , , , , , , , 13, , , , 22, 12, , , , 21, 10, , , , ( ) 22, 10, , , ( ) , 22, 10, , , , 24, 12, , , , 26, 13, , , , ( ) 27, 14, , , ( )

2 , 26, 16, , , , , 27, 19, , , , , 27, 19, , , 28, 21, , , , 31, 23, , , , 33, 24, , , ( ) , 36, 26, , , , ( ) 35, 24, , , ( ) , , 36, 26, , , , 41, 29, , , , ( ) 43, 28, , , ( ) , , 64, 39, , 12, Annual (1) All share references are to common shares; Closing share price is in Canadian dollars; per share amounts are in US dollars;Shares outstanding are in millions.(2) IFRS basis for 2010 to 2017 ; Canadian GAAP basis for 2009 and prior. Under Canadian GAAP, investments weregenerally carried at cost or amortized cost in 2006 and prior.

3 (3) When current management took over in September 1985. 1 FAIRFAX FINANCIAL HOLDINGS LIMITEDC orporate ProfileFairfax Financial Holdings Limited is a holding company whose corporate objective is to build long termshareholder value by achieving a high rate of compound growth in book value per share over the long term. Thecompany has been under present management since September and ReinsuranceNorthbridge Financial, based in Toronto, Canada, provides property and casualty insurance products in theCanadian market through its Northbridge Insurance and Federated subsidiaries. It is one of the largest commercialproperty and casualty insurers in Canada based on gross premiums written.

4 In 2017 , Northbridge s net premiumswritten were Cdn$1, million. At year-end, the company had statutory equity of Cdn$1, million and therewere 1,467 , based in Stamford, Connecticut, underwrites treaty and facultative reinsurance as well as specialtyinsurance, with principal locations in the United States, Toronto, London, Paris, Singapore and Latin America. In2017, OdysseyRe s net premiums written were US$2, million. At year-end, the company had shareholders equity of US$4, million and there were 987 & Forster (C&F), based in Morristown, New Jersey, is a national commercial property and casualty insurancecompany in the United States writing a broad range of commercial, principally specialty, coverages.

5 In 2017 , C&F snet premiums written were US$1, million. At year-end, the company had statutory surplus ofUS$1, million and there were 2,298 National, based in Woodland Hills, California, is primarily engaged in the workers compensationinsurance business in the United States. In 2017 , Zenith National s net premiums written were US$ million. Atyear-end, the company had statutory surplus of US$ million and there were 1,535 , based in London, England, is a market-leading global Lloyd s of London specialty insurer and reinsurer. In2017, Brit s net premiums written were US$1, million.

6 At year-end, the company had shareholders equity ofUS$1, million and there were 558 World, based in Zug, Switzerland, provides property, casualty and specialty insurance and reinsurancesolutions, with principal locations in the United States, Bermuda, London, Singapore and Canada. In 2017 , AlliedWorld s net premiums written were US$2, million. At year-end, the company had shareholders equity ofUS$2, million and there were 1,430 employees. Allied World was acquired on July 6, AsiaFalcon Insurance, based in Hong Kong, writes property and casualty insurance in niche markets in Hong Kong. In2017, Falcon s net premiums written were HKD million (approximately HKD = US$1).

7 At year-end, thecompany had shareholders equity of HKD million and there were 66 Insurance, based in Malaysia, writes all classes of general insurance and medical insurance in Malaysia. In2017, Pacific Insurance s net premiums written were MYR million (approximately MYR = US$1). Atyear-end, the company had shareholders equity of MYR million and there were 422 , based in Indonesia, writes all classes of general insurance in Indonesia. In 2017 , AMAG s net premiumswritten were IDR billion (approximately IDR 13, = US$1). At year-end, the company had shareholders equity of IDR 3, billion and there were 769 Insurance, based in Sri Lanka, writes general insurance in Sri Lanka, specializing in automobile andpersonal accident lines of business.

8 In 2017 , Union Assurance s net premiums written were LKR 7, million(approximately LKR = US$1). At year-end, the company had shareholders equity of LKR 5, million andthere were 963 employees. Union Assurance amalgamated with Fairfirst Insurance Limited effective February 28, 2017 and the amalgamated entity continued as Fairfirst Insurance and Reinsurance OtherAdvent, based in London, England, is a reinsurance and insurance company, operating through Syndicate 780 atLloyd s, focused on specialty property reinsurance and insurance risks. In 2017 , Advent s net premiums written wereUS$ million. At year-end, the company had shareholders equity of US$ million and there were117 Re primarily constitutes the participation by CRC Re and Wentworth (both based in Barbados) in thereinsurance of Fairfax s subsidiaries by quota share or through participation in those subsidiaries third partyreinsurance programs on the same terms and pricing as the third party reinsurers.

9 Group Re also writes third partybusiness. In 2017 , Group Re s net premiums written were US$ million. At year-end, the Group Re companieshad combined shareholders equity of US$ Insurance, based in South Africa, writes property and casualty insurance in South Africa and Botswana. In2017, Bryte Insurance s net premiums written were ZAR billion (approximately ZAR = US$1). At year-end,the company had shareholders equity of ZAR 1, million and there were 765 Central and Eastern Europe comprises Polish Re and Colonnade Re, based in Warsaw, writes reinsurance in the Central and Eastern European regions. In 2017 , Polish Re s netpremiums written were PLN million (approximately PLN = US$1).

10 At year-end, the company hadshareholders equity of PLN million and there were 39 Insurance, based in Luxembourg, writes general insurance through its Ukrainian insurance company andthrough its branches in the Czech Republic, Hungary, Slovakia, Bulgaria, Poland and Romania. In 2017 , ColonnadeInsurance s net premiums written were US$ million. At year-end, the company had shareholders equity ofUS$ million and there were 461 Latin America comprises Fairfax Brasil and Fairfax Brasil, based in S ao Paulo, writes general insurance in Brazil. In 2017 , Fairfax Brasil s net premiums writtenwere BRL million (approximately BRL = US$1).