Q4 2023 Fairfax Financial Holdings Ltd Earnings Call

Operator: complementarily. Thank you for calling. Wave your passcode, please.

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Rachel Smith: Yes, hi, it's Fairfax. Thank you. And your first and last name, please?

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Thank you and your first and last name with the spelling.

Rachel Smith: This is Rachel Smith, R-A-C-H-E-L-S-M-I-T-H, and your company name. I'm at AIERA; that's A-I-E-R-A. Thank you. I will join you on listen-only, and the calls are being recorded. Thank you, www.fairfax.com. Good morning and welcome to Fairfax's 2023 Year-End Results Conference Call.

And your company name.

Thank you I will join you in on listen only and the call's being recorded.

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Good morning, and welcome to Fairfax is 2023 year end results conference call. Your lines have been placed in a listen only mode. After the presentation. We will conduct a question and answer session at that time to ask a question. Please press star one.

Operator: After the presentation, we will conduct a question and answer session. At that time, to ask a question, please press 1 on your phone keypad. For time's sake, we ask that you limit your questions to 1. This conference is being recorded. If you have any objections, you may disconnect at this time. Your host for today's call is Prem Watsa, with opening remarks from Mr. Derek Beulis. Mr. Beulis, please begin.

One on your phone keypad for time sake, we ask that you limit your questions to one today's conference is being recorded.

Any objections you may disconnect at this time.

Your host for today's call is Prem Watson with opening remarks from Mr. Derek <unk> Mr. <unk>. Please begin.

Good morning, and welcome to our call to discuss Fairfax is 2023 year end result. This call may include forward looking statements actual results may differ perhaps materially from those contained in such forward looking statements. As a result of a variety of uncertainties and risk factors. The most foreseeable of which are set out under risk factors in our base shelf.

Derek Beulis: Good morning and welcome to our call to discuss Fairfax's 2023 year-end results. This call may include forward-looking statements. Actual results may differ, perhaps materially, from those contained in such forward-looking statements as a result of a variety of uncertainties and risk factors, the most foreseeable of which are set out under risk factors in our base shelf prospectus, which has been filed with Canadian securities regulators and is available on CDAR. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements except as required by applicable securities law. I will now turn the call over to our Chairman and CEO, Prem Watson. Thank you, Derek. Good morning, ladies and gentlemen.

Prospectus, which has been filed with Canadian Securities regulators and is available on SEDAR.

Fairfax disclaims any intention or obligation to update or revise any forward looking statements, except as required by applicable Securities law I will now turn the call over to our chairman and CEO from Whatsapp.

Thank you Derek good morning, ladies and gentlemen, welcome to fair practices 2023 fourth quarter and year end conference call I plan to give you a couple of highlights and then pass the call the breeder block, our president and Chief operating officer to comment on the quarter and 2020.

Prem Watsa: Welcome to Fairfax's 2023 fourth quarter and year-end conference call. I plan to give you a couple of highlights and then pass the call to Peter Clark, our President and Chief Operating Officer, to comment on the quarter and 2023, and Jen Allen, our Chief Financial Officer, to provide some additional financial details. 2023 was the best year in our history by far.

And John and Jen Allen, our Chief Financial Officer to provide some additional financial details.

2023 was the best year in our history bite squad.

We earned $4 4 billion after taxes with a record underwriting income of one 5 billion record interest and dividend income of $1 9 billion and record income from associates of 1 billion.

Prem Watsa: We earned $4.4 billion after taxes with a record underwriting income of $1.5 billion, record interest and dividend income of $1.9 billion, and record income from associates of $1 billion. Operating income from our insurance and reinsurance operations on an undiscounted basis was $3.9 billion, a record. Our consolidated combined ratio was 93.2% as we benefited greatly from our diversification and global presence. Our book value per share increased by 25%, adjusted for our dividend, to $940. In the last three years, our book value has grown by 25%, 22%, and 34%, including our dividend. As I said last year, Fairfax has been transformed in the last few years as we doubled our premium.

Operating income from our insurance and reinsurance operations on an.

Undisc counted basis with 3.9 billion a record.

Our consolidated combined ratio was 93, 2% as we benefited greatly from our diversification and global presence.

Our book value per share increased by 25% adjusted for adjusted for our dividend to $940 in the last three is our book value has grown by 25%, 22% and 34% including dividends.

As I've said last year Fairfax has been transformed in the last few years as we doubled our premium.

Let me show you how the intrinsic value of Fairfax has increased significantly since 2017.

Prem Watsa: Let me show you how the intrinsic value of Fairfax has increased significantly since 2017, gross premium. 2017, $13.8 billion. 2023 28.9, up 109% at a combined average combined ratio of 95% with very strong reserving. Almost all of that growth was organic.

Gross premiums.

2017, 13 8 billion.

'twenty three 'twenty eight nine up 109% at a combined average combined ratio of 95% with very strong reserving.

Almost all of that growth was organic.

Prem Watsa: Float. $20.4 billion; now at $33.4 billion, up 64%. Investment portfolio $39.3 billion is now at $64.8 billion, up 65%. Common Shareholders' Equity. $12.5 billion to $21.6 billion, up 73%. Underwriting profit from a loss in 2017 to $1.5 billion profit. Share of profits and associates, $0.2 billion to $1 billion, up 410%, and operating income from a loss to $3.9 billion. Now this growth is magnified on a per share basis.

Note 24 24 billion.

Now at $33 4 billion up 64% investment portfolio $39 3 billion is now at $64 8 billion up 65% common shareholders' equity.

12 point.

$5 billion to $21 6 billion up 73% underwriting profit from a loss in 2017 to one 5 billion profit share of profits and associates.

<unk> billion, two 1 billion up 110% and operating income from a loss of $3 9 billion.

Now this growth is magnified on a per share basis.

Shares outstanding due to that time period 2017 to 23 has dropped by 17% from 2017 to 23.

Prem Watsa: Shares outstanding during that time period, 2017-23, dropped by 17% from 2017-2023. So, for example, gross premiums per share were up, per share were up 152% versus 109% on an absolute dollar basis for gross premiums, investment portfolio per share is up almost 100% versus 65% on an absolute basis, and operating income was $174 per share in 2023 versus a loss of $8 in 2017. Now, as I've said for the last number of quarters, the most important point I can make for you is to repeat what I've said in the past.

So for example, gross premiums per share were up.

<unk> per share were up 152% versus 109% on an absolute dollar basis, while gross premiums.

Investment portfolio per share is up almost 100% versus 65% on an absolute basis.

Operating income was $174 per share in 2023 versus a loss of $8 and 2017.

Now as I've said for the last number of quarters. The most important point I can make for you is still repeat what I've said in the past, but the second time in a 38 year history I can say to you we expect.

Prem Watsa: For the second time in our 38-year history, I can say to you, we expect, with, of course, no guarantees, sustainable operating income of $4 billion, operating income consisting of $2 billion-plus from interest and dividend income, $1.2 billion from underwriting profit with normalized catastrophe losses, and $750 million from associates and non-insurance companies, more than $125 per share after interest expenses, overhead, and tax. Of course, fluctuations in stock and bond prices will be on top of that. And these fluctuations only really matter over the long term.

Of course, no guarantees sustainable operating income of 4 billion.

Operating income consisting of 2 billion plus from interest and dividend income.

One 2 billion from underwriting profit with normalized catastrophe losses, and 750 million from associates of non insurance companies that's worked out.

Oh $125 per share after interest expenses overhead and taxes.

Of course fluctuations in stock and bond prices that we on top of that.

These fluctuations only really matter over the long term.

We will have a lot more for you in our annual report.

Peter Clark: We will have a lot more for you in our annual report. I will now pass this call to Peter Clark, our President and Chief Operating Officer, for further updates.

I will now pass the call to Peter Clark, Our President and Chief operating officer for further updates Brita.

Peter Clark: Thank you, Prem. We had an outstanding year with net earnings of $4.4 billion, and our book value increased to $940 per share, an increase of 25% from year-end adjusted for the $10 dividend paid in 2023. This performance was driven by record-adjusted operating income of $3.9 billion from our insurance and reinsurance operations. Our investment return for 2023 was not 8.4%, just a little above our long-term average, driven by increased interest and dividend income, a strong share of profits from associates, and net gains on equities and bonds. Consolidated interest and dividend income of $1.9 billion nearly doubled from 2022, benefiting from reinvesting at higher interest rates in 2023, primarily in government bonds.

Thank you Pam.

We had an outstanding year with net earnings of $4 4 billion and our book value increased to $940 per share an increase of 25% from year end adjusted for the $10 dividend paid in 2023.

This performance was driven by record adjusted operating income of $3 9 billion from our insurance and reinsurance operations.

Our investment return for 2023 was not it was eight 4%.

Just a little above our long term average.

Driven by increased interest and dividend income strong share of profits of associates and net gains on equities and bonds.

Consolidated interest and dividend income of $1 9 billion nearly doubled from 2022 benefiting from reinvesting at higher interest rates in 2023, primarily in government bonds.

Net gains on investments of approximately 2 billion included $1 5 billion in the fourth quarter and were driven by gains on our equity exposures of $1 2 billion and unrealized gains on our bond portfolio of $714 million, primarily from U S treasuries do.

Peter Clark: Net gains on investments of approximately $2 billion included $1.5 billion in the fourth quarter and were driven by gains on our equity exposures of $1.2 billion and unrealized gains on our bond portfolio of $714 million, primarily from U.S. Treasuries due to the decrease in interest rates late in the year. The net gains of $1.2 billion on our equity and equity-related holdings were driven by unrealized mark-to-market gains on our Fairfax TRS, Commercial International Bank, Micron, and Mitalino, offset by unrealized losses on Wateris Energy and Kennedy Wells. As mentioned in previous quarters, our book value per share of $940 does not include unrealized gains or losses on our equity-accounted investments and our consolidated investments, which are not mark-to-market. At the end of the year, the fair value of these securities is in excess of their carrying value by $1 billion, an unrealized gain position, or $44 per share on a pre-tax basis. Under IFRS 17, our net earnings are affected by the discounting of our insurance liabilities and the application of a risk adjustment. In 2023, our net earnings benefited by $210 million pre-tax from the effects of discounting losses occurring during the year. As interest rates move up and down, we will see positive or negative effects on net earnings from discounts.

The decrease in interest rates late in the year.

The net gains of $1 2 billion on our equity and equity related holdings were driven by unrealized mark to market gains on our Fairfax Trs commercial International Bank Micron and mentally notes.

Offset by unrealized losses on water and energy and Kennedy Wilson.

As mentioned in previous quarters, our book value per share of $940 does not include unrealized gains or losses in our equity accounted investments and our consolidated investments, which are not mark to market.

At the end of the year the fair value of these securities is in excess of carrying value by $1 billion, an unrealized gain position were $44 per share on a pre tax basis.

Under <unk> 17, our net earnings are affected by the discounting of our insurance liabilities and the application of our risk adjustment.

In 2023, our net earnings benefited by 210 million pretax from the effects of discounting losses occurring in the in the year.

As interest rates move up and down we will see positive or negative effects on net earnings from discounting.

Peter Clark: Our insurance and reinsurance businesses wrote a record $28.9 billion of gross premium in 2023, up 4.8% versus 2022. The growth was driven by increased pricing in our reinsurance, business, and international markets, offset by decreased premium volume in cyber and professional liability lines as market competition and capacity impacted pricing and terms in those lines. The premium growth for the year was tempered by a 3% decline in the fourth quarter compared to 5% growth in the fourth quarter of 2022 due to declines at Odyssey and Britt. More on that in a moment.

Our insurance and reinsurance businesses wrote a record $28 9 billion of gross premium in 2023 up four 8% versus 2020 to.

The growth was driven by increased pricing in our reinsurance business in international markets.

Offsetting by decreased premium volume in cyber and prep professional liability lines as market condition market.

Competition and capacity impacted pricing and terms in those lines.

The premium growth for the year was tempered by a 3% decline in the fourth quarter compared to 5% growth in the fourth quarter of 2022.

Due to declines at Odyssey, and Brett more on that in a moment.

Our North American insurance segment increased gross premiums by 797 million in 2023 or 10, 5%.

Peter Clark: Our North American insurance segment increased gross premiums by $797 million in 2023, or 10.5%. Cromme Forster had double-digit growth at 14%, driven by its surplus in specialty lines, accident and health business, and Seneca Insurance. Northbridge was up 10% in Canadian dollars, reflecting excellent customer retention and rate increases, while Xenus premiums were relatively flat year over year due to the competitive workers compensation model. Our global insurer and re-insurer segment was down slightly, with gross premiums of $16.9 billion in 2023, or a 0.5% decline versus 2022. Allied was up 5.4% in the year, led by its reinsurance segment, which had 24% growth, while its insurance segment was flat. Odyssey's premiums were down 3.5% in 2023, with its insurance business down 8%, principally at Hudson in its crop and financial lines of business, while reinsurance was flat, impacted by the non-renewal of a large quarter share in the fourth quarter. Excluding the quarter share contract, Odyssey's reinsurance business was up 10% in 2023. BRIT's premium was down 5% in the year, largely due to reductions in D&O and cyber business and the actions taken during 2023 to reduce its catastrophe exposure.

Crum <unk> Forster had double digit growth at 14% driven by its surplus in specialty lines accident health business and Seneca insurance.

North bridge was up 10% in Canadian dollars, reflecting excellent customer retention and rate increases.

While <unk> net premiums were relatively flat year over year due to the competitive workers' compensation market.

Our global insurer and Reinsurer segment was down slightly with gross premiums of $16 9 billion in 2023 or half a percent decline versus 2022.

Allied was up five 4% in the year led by its reinsurance segment, which had 24% growth.

Insurance segment was flat.

Odyssey as premiums were down three 5% in 2023 with its insurance business down 8%, principally at Hudson and its crop and financial lines of business, while reinsurance was flat impacted by the non renewal of a large quota share in the fourth quarter.

Excluding the quota share contract odyssey's reinsurance business was up 10% in 2023.

Written premium was down 5% in the year largely due to reductions in D&O and cyber business.

And the actions taken during 2023 to reduce its catastrophe exposure.

Peter Clark: Our international operations grew significantly in the year, with gross premiums written at $3.6 billion, up 21% versus 2022, or almost $620 million. Growth was strong across all companies in the segment, led by Polishree up 50%, Colonnade 27%, Fairfax Asia 22%, and Fairfax Latin America was up 18%. The closing in the fourth quarter of our acquisition of an additional 46% interest in golf insurance will add approximately $2.7 billion in gross premium annually to our international business beginning in 2025. The long-term prospects of our international operations are excellent and will be a significant source of growth over time, driven by excellent management teams, under-penetrated insurance markets, and strong local economies. Our combined ratio was 93.2 in 2023, producing a record underwriting profit of $1.5 billion. Combined ratio included catastrophe losses of almost $900 million, adding four combined ratio points, primarily from the Hawaii wildfires, the Turkey earthquake, and attritional catastrophe losses.

Our international operations grew significantly in the year with gross premiums written of $3 6 billion up 21% versus 2022.

Or almost $620 million.

Growth was strong across all company all companies in this segment led by Polish free up 50% call an 827%.

Fairfax Asia, 22% and Fairfax Latin America was up 18%.

The closing in the fourth quarter, a quarter of our acquisition of additional 46% interest in golf insurance will add approximately $2 seven plus billion in gross premium annually to our international business beginning in 2024.

The long term prospects of our international operations are excellent and will be a significant source of growth over time, driven by excellent management teams Underpenetrated insurance markets and strong local economies.

Our combined ratio was 93, 2% in 2023, producing record underwriting profit of $1 5 billion.

Combined ratio included catastrophe losses of almost $900 million, adding four combined ratio points, primarily from the Hawaii Wild fires, Turkey earthquake and attrition attritional catastrophe losses.

This compares to a combined ratio of $94 seven and catastrophe losses of six one points in 2022.

Peter Clark: This compares to a combined ratio of 94.7 and catastrophe losses of 6.1 points in 2020; the combined ratio for the fourth quarter was 89.9 percent, producing an underwriting profit of $579 million. Our global insurers and re-insurers posted a combined ratio of 91.7 in 2023, led again by Allied World with a combined ratio of 89.5, with strong results in both its global insurance segment and reinsurance segment. Brit had a great year with a combined ratio of 91.9, with $240 million of underwriting profit, by far the most since we acquired them, and Odyssey Group produced a combined ratio of 93.4, including an 89.6 combined ratio in its reinsurance business. Our North American insurers had a combined ratio of 95.2 in 2023, led by Northbridge with another strong year at 91 combined ratio from Forster, and an elevated combined ratio of Our international operations delivered a combined ratio of 95.9 for the year. Fairfax, Asia had a combined ratio of 93.9. Our Latin American operations came in at 94.9.

Okay.

Our combined ratio for the fourth quarter was 89, 9% producing an underwriting profit of $579 million.

Our global insurers and reinsurers posted a combined ratio of 91 seven in 2023.

Led again by Allied World with a combined ratio of 89 five.

Strong results in both its global insurance segment and reinsurance segment.

Brett had a great year with a combined ratio of $91 nine with $240 million of underwriting profit by far the most since we acquired them.

And Odyssey group produced a combined ratio of $93 four including an $89 six combined ratio and its reinsurance business.

Our North American insurers had a combined ratio of $95 two in 2023.

Led by North bridge with another strong year at 91 combined ratio from Forrester had an elevated combined ratio of 97.7 with two points from the fires in Hawaii.

Our international operations delivered a combined ratio of 95 nine for the year.

Fairfax Asia had a combined ratio of $93 nine our Latin American operations came in at 94 nine in our central and Eastern operations produced a 95 nine.

Peter Clark: And our Central and Eastern operations produced a 95.9. Eurolife's non-life operations had a difficult year, with an underwriting loss of $15 million due to the impact of wildfires in Greece and Storm Daniel. For the year, our insurance and reinsurance companies recorded favorable reserve development of $310 million, for a benefit of 1.4 points on our combined ratio. This is compared to 196 million for the benefit of 0.9 points in 2022; a runoff operation strengthened reserves of $260 million as part of their annual actuarial reserve process. The strengthening related primarily to asbestos liabilities on both direct and assumed portfolios, Talc, ULAE, and uncollectible reinsurance are net runoff reserves of approximately $1.5 billion, which contain almost all our asbestos and latent exposures. These are managed by Riverstone, led by Nick Bentley and Bob Sands. Nick, Bob, and the rest of the team do an outstanding job dealing with some of our most difficult claims in a very challenging U.S. legal system while continuing to deal with emerging claims.

Euro life non life operations had a difficult year.

With an underlying underwriting loss of $15 million due to the impact of wildfires in Greece and storm Daniel.

For the year, our insurance and reinsurance companies recorded favorable reserve development of $310 million or a benefit of one four points on our combined ratio.

This is compared to $196 million or the benefit of <unk> nine points in 2022.

Our run off operations strengthened reserves of $260 million as part of their annual actuarial reserve process.

The strengthening related primarily to asbestos liabilities on both direct and assumed portfolios.

UL AE and uncollectible reinsurance.

Our net run off reserves of approximately $1 5 billion, which contain almost all our asbestos and latent exposures are managed by Riverstone led.

Led by Nick Bentley and Bob Samsung.

Nick Bob and the rest of the team do an outstanding job dealing with some of our most difficult claims in a very challenging U S legal system.

We'll continue to deal with emerging claims.

Through our decentralized operations, our insurance and reinsurance companies continue to thrive.

Jen Allen: Through our decentralized operations, our insurance and reinsurance companies continue to thrive, writing close to $33 billion in gross premium, including golf insurance. Producing record underwriting profits and led by an exceptional management team, our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2021. I will now pass the call to Jen Allen, our Chief Financial Officer, to comment on our non-insurance company's performance, overall financial position, and recent transactions. Thank you, Peter. Consistent with our prior quarter's 2023 interim report, the comparative periods in the company's press release on the financial results for our year ended December 31st, 2023, have been restated and presented under IFRS 17, so that all comparative periods presented are on the same measurement basis.

Writing close to 33 billion in gross premium including golf insurance.

Producing record underwriting profit and led by an exceptional management team. Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2024.

I will now pass the call to Jen Allen, our Chief financial Officer to comment on our noninterest company's performance.

Overall financial position and recent transactions.

Peter consistent with our prior quarters 2023 interim report the comparative periods in the Companys press release on our financial results for our year ended December 31, 2023 have been restated and presented under <unk> 17, So all comparative periods presented are unsafe.

<unk> measurement basis.

In the company's press release on page three we disclosed table that reconcile insurance service results under <unk> 17.

Jen Allen: In the company's press release on page 3, we disclose tables that reconcile insurance service results under IFRS 17 for our property and casualty insurance and reinsurance operations to underwriting profits, a key performance measure used by the company and the property and casualty insurance industry in which we operate to evaluate and manage the business. As a reminder, the primary reconciling adjustments presented in these tables are first; we adjust to include other insurance operating expenses which are presented in our consolidated statement of earnings outside of the insurance service results. And second, we adjust for the effects of discounting on net losses on claims and change in risk adjustment that are included in insurance service results in the consolidated statement of earnings. Our traditional performance measures of underwriting profit and combined ratios were on an undiscounted basis, as discussed by Peter.

Our property and casualty insurance and reinsurance operations to underwriting profit.

Key performance measure used by the company in the property and casualty insurance industry in which we operate to evaluate and manage the business.

As a reminder, the primary reconciling adjustments presented in these tables are first we adjust to include other insurance operating expenses, which are presented in our consolidated statement of earnings.

Outside of the insurance service results and second we adjust for the effects of discounting on net losses on claims and change in risk adjustments that are included in insurance service results in the consolidated statement of earnings.

Our traditional performance measures of underwriting profit in combined ratios were on an undisclosed basis as discussed by Peter.

Jen Allen: So I'll begin my comments for the fourth quarter and full year of 2023 on the impact IFRS 17 had on our financial results. In the fourth quarter of 2023, the net earnings of $1.3 billion included a pre-tax net expense of $781 million, and the net earnings for the full year of 2023 of $4.4 billion included a pre-tax net benefit of $210 million related to IFRS 17. The pre-tax amounts are reported on two financial statement lines in the Consolidated Statement of Earnings.

So I'll begin my comments in the fourth quarter and full year 2023 on the impact of <unk> 17 had within our financial results.

In the fourth quarter of 'twenty three the net earnings of $1 3 billion included pre tax net expense of $781 million.

And the net earnings in the full year 2023 of $4 4 billion included a pre tax net benefit of $210 million related to <unk> 17.

The pre tax amounts are reported within key financial statement lines in the consolidated statement of earnings.

Jen Allen: First included in the insurance service result line is the benefit of discounting losses and seeded losses on claims, net of the change in the risk adjustment reported in the fourth quarter of $230 million and $1.8 billion for the year, respectively. It was partially offset by the second component that's presented in a separate financial line in our financial statements, which is the net finance expense from insurance and reinsurance contracts of $1 billion in the quarter and $1.6 billion for the full year. Those are comprised of interest accretion or an expense of $340 million in the quarter and approximately $1.4 billion for the first year, full year, resulting from unwinding the effects of discounting associated with net claims paid made during the year and an effective decrease in discount rates during the fourth quarter and full year of 2023, which was a net expense of $670 million and $218 million, respectively.

First included in the insurance service result line is the benefit of discounting losses and ceded loss on claims net of the change in the risk adjustment recorded in the fourth quarter of $230 million and $1 8 billion for the year respectively.

It was partially offset by the second component that's presented in a separate financial line in our financial statements, which is the net finance expense from insurance and reinsurance contract of $1 billion in the quarter and $1 6 billion in the full year.

Those are comprised of interest accretion or an expense of $340 million in the quarter and approximately $1 4 billion for the first year full year, resulting from unwinding the effects from discounting associated with net claims paid made during the year and effective decrease in discount rates during the fourth quarter and full year two.

<unk> thousand 23, which was a net expense of $670 million and $218 million respectively.

This compared to a pre tax net benefit in the fourth quarter of 'twenty Q of $536 million and $3 billion and the full year of 2022 that was comprised of the same components I just commented on for 'twenty, three which was mainly included in the insurance service result, the benefit of discounting losses and ceded loss on.

Jen Allen: This compared to a pre-tax net benefit in the fourth quarter of 2022 of $536 million and $3 billion in the full year of 2022 that was comprised of the same components I just commented on for 2023, which was namely included in the insurance service result, the benefit of discounting losses and seeded loss on claims of $491 million in the quarter, $1.4 billion for the full year. But unlike 2023, due to the increase in the interest rates in 2022, 2022's results also benefited from net finance income versus an expense in 2023 from our insurance and reinsurance contracts of $45 million and $1.6 billion for the full year, and that reflected the benefit in the increased discount rates in those respective periods of $125 million and $1.9 billion as a result of the change in the interest rate environment being more pronounced in the full year of 2022 compared to 2023.

Claims of $491 million in the quarter $1 4 billion, okay. The full year.

But unlike 2023 due to the increase in the interest rate in 2020, Q 'twenty Two's results also benefited from net finance income versus an expense in 'twenty three from our insurance and reinsurance contracts of $45 million and $1 6 billion for the full year.

And that reflected the benefit and increased discount rates in those respective periods of $125 million and $1 9 billion as a result of the change in the interest rate environment and more pronounced in the full year of 22 compared to 23 it.

Jen Allen: It was partially offset by interest accretion or an expense of $80 million in the fourth quarter and $311 million in the full year of 2022 that relates to the unwinding of the effects of the discounts associated with our net claims payments made during the period. Now, I will make a few comments on our non-insurance company results for the quarter and full year of 2023. Our non-insurance companies reported an operating loss of $40 million in the fourth quarter of 2023, compared to operating income of $61 million in the fourth quarter of 2022.

It was partially offset by the interest accretion or an expense of $80 million in the fourth quarter and $311 million in the full year 'twenty two that relates to the unwinding of the effects of that discount associated with our net claims payments made during the period.

Turning to a few comments on our non insurance company results in the quarter and full year of 2023 or.

Our non insurance companies reported an operating loss in the fourth quarter of 'twenty three of $40 million compared to operating income of $61 million in the fourth quarter 'twenty two.

Jen Allen: These exclude the impacts of Fairfax India's performance fees to Fairfax, which was an accrual of $28 million and $9 million in the fourth quarter of 2023 and 2022, respectively, which are offset upon consolidation, and non-cash goodwill impairment charges of $64 and $24 million recorded in the fourth quarters of 2023 and 2022 related to our non-insurance companies. The operating income for the non-insurance company reporting segment was $52 million in the fourth quarter of 2023, and that compared to operating income of $94 million in the fourth quarter of 2022. Our operating income in the non-insurance reporting segment decreased to $122 million in the full year of 2023 from $222 million in the full quarter of 2022, excluding the impact of Fairfax India's performance fee, which is offset again on consolidation and the impact of the non-cash impairment charges of $108 million recorded throughout the year related to non-insurance companies, including Farmer's Edge. Operating income decreased modestly to $299 million for the full year of 2023 and $318 million for the full year of 2022.

We exclude the impact of Fairfax, India performance fees to Fairfax, which was an accrual of $28 million and $9 million in the fourth quarter 'twenty, three and 'twenty, two respectively, which are offset upon upon consolidation and noncash goodwill impairment charges of $64 million and $24 million recorded in the fourth.

Quarters of 'twenty, three and 'twenty two related to our non insurance companies.

The operating income for the non insurance company reporting segment was $52 million in the fourth quarter 'twenty, three and that compared to operating income of 94 in the fourth quarter of 'twenty two.

Our operating income in the non insurance reporting segment decreased to $122 million in the full year of 23 from <unk>.

$222 million in the full quarter of 'twenty two.

Excluding the impact of Fairfax, India performance fee.

Which are offset again on consolidation and the impact of the noncash impairment charges of $108 million recorded throughout the year related to non insurance companies, including farmers edge operating income decreased modestly to $299 million for the full year of 'twenty, three and $318 million for the full year.

Of 22.

The decrease of $19 million reflected operating loss from our other reporting subsegment of $1 million in 2023 compared to an operating income of $44 million and 22, reflecting higher operating expenses at ADT, primarily related to foreign exchange and go value hospitality.

Jen Allen: The decrease of $19 million reflected an operating loss from our other reporting sub-segment of $1 million in 2023 compared to an operating income of $44 million in 2022, reflecting higher operating expenses at AGT, primarily related to foreign exchange, and Grevalia Hospitality. Lower operating income in restaurant and retail of $20 million, primarily due to higher operating expenses, was partially offset by higher operating income at Fairfax India of $21 million related to their increase in share from their profits of associates, and higher operating income at Thomas Cook India of $25 million related to higher business volumes in all segments resulted from increased domestic and international travel as the hospitality industry continued to show a significant recovery throughout 2023. At December 31, 2023, the holding company had a performance fee receivable of $110 million pursuant to its investment advisory agreement with Fairfax India for the period from January 1, 2021 to December 31, 2023.

Lower operating income in restaurant and retail of $20 million, primarily due to higher operating expenses.

It was partially offset by higher operating income at Fairfax, India is $21 million related to the increase in share from their profits of associates.

And higher opt.

Operating income at Thomas Cook, India of $25 million related to higher business volumes and all segments resulted from increased domestic and international travel as the hospitality industry has continued to show significant recovery throughout 2023.

At December 31, 23, the holding company had a performance fee receivable of $110 million pursuant to its investment advisory agreement with Fairfax, India for the period January one 2021 to December 31 2023.

Jen Allen: Fairfax has elected to receive the performance fee payable in cash and expects receipt of payment within the first six months of 2024. Looking at our shared profits from our investments in associates for the fourth quarter and full year, share profit of Associates decreased in the fourth quarter to $128 million compared to $258 million in the prior quarter, 2022. Standby, the conference will resume momentarily. Hold. Your conference will resume.

Fairfax has elected to receive performance fee payable in cash and expects receipt of payment within the first six months of 2024.

Looking at our share of profits from our investments in associates for the fourth quarter and full year.

Share of profit of associates decreased in the fourth quarter to $128 million compared to $258 million in the prior quarter 'twenty Q.

Yes.

Please standby the conference will resume homelink materially.

Thank you for continuing to hold your conference will resume momentarily.

You may resume.

Jen Allen: You may resume, profits. This is related to our fourth quarter 2023 compared to 2022. We had increased share profits from Eurobank of 94 million compared to 33 million in the prior year, and Stelco at $12 million compared to no share in profit in the prior year due to the commencement of the equity method of accounting on Stelco on August 31, 2022. Share profit of our investments in Associates remains steady for the full year of 2023 compared to the full year of 2022, with the share profit of Associates of approximately $1 billion in each respective It relates to no share profit from Resolute in 2023 as a result of our disposition of the investment compared to 2022, which included $159 million; reduced share profits from Atlas of $150 million compared to $258 million in the prior period, reflecting higher interest expense and transaction costs related to the first quarter 23 privatization of Atlas or Poseidon. The company expects Poseidon's earnings will normalize over time.

Yeah.

Profits this is related to our fourth quarter 2023 compared to 2022.

<unk> increased share of profits from eurobank of $94 million compared to $33 million in the prior year.

And telco at $12 million compared to no share in profit in the prior year due to commencement of equity method of accounting on Stelco on August 31 22.

Sure profit about our investments in associates remained steady for the full year 23 compared to the full year 'twenty two with share profit of associates of approximately $1 billion in each respective period and it related queued no share profit from resolute in 2023 as a result of our disposition of the investment compared to 22 that included.

$159 million.

Reduced share profits from Atlas of $150 million compared to 258 in the prior period, reflecting higher interest expense and transaction costs related to the first quarter 'twenty three privatization of Atlas or beside.

The company expects those items earnings will normalize over time.

Jen Allen: This was offset by increased share of profits from the following Eurobank 438 million compared to 263 million in the prior year, Exco Resources 129 million compared to 82 million in the prior year, and Digit Share of Profit of 43 million compared to share of losses of 11 million in the prior year. Turning to a few comments on transactions, on December 26, 2023, we acquired an additional 46.3% interest in Gulf Insurance for $756 million, which increased the company's interest to a controlling equity interest of 90%. On closing the transaction, the company, in accordance with IFRS, remeasured its previously held accounted investment in Gulf Insurance and recognized a pre-tax gain of $280 million, and commenced consolidating the assets and liabilities of Gulf Insurance within the property and casualty operations that are being consolidated in the international insurer and reinsurer reporting segment, and the life insurance operations will be consolidated within the life insurance and runoff reporting segment. The remaining 10% equity interest in golf insurance not held by Fairfax is subject to a mandatory tender offer.

This was offset by increased share of profits from the following eurobank $480 million to $38 million compared to $263 million in the prior year ex.

Exco resources of 129 million compared to $82 million in the prior year and digits share profit of $43 million compared to share of losses of $11 million in the prior year.

Turning to a few comments on transactions on December 26, 23, we acquired an additional 46, 3% interests in golf insurance for $756 million, which increased the company's interest to a controlling equity interest of 90%.

On closing the transaction the company in accordance with IRS re measured its previously held accounted investment in Gulf insurance and recognized a pretax gain of $280 million and.

And commence consolidating the assets and liabilities of golf insurance within the property and casualty operations that are being consolidated in the international insurer and reinsurer reporting segment.

In our life insurance operations will be consolidated within the life insurance and runoff reporting segment.

The remaining 10% equity interest in Gulf insurance, not held by Fairfax is subject to a mandatory tender offer.

Jen Allen: Fairfax intends, in accordance with the regulations of the Capital Market Authority in Kuwait, to initiate the mandatory tender offer to all other holders of golf insurance shares and expects the transaction will close in the second quarter of 2024. I will close with a few comments on our financial condition. On December 7, 2023, we completed an offering of $400 million principal amount of 6% unsecured senior notes due in 2033 for net proceeds of $394 million. And then, subsequent to December 31, 2023, on January 12, 2024, the company completed the reopening of those same notes for $200 million principal amount on January 29, 2024. We're using a portion of those aggregate net proceeds from the issuances to redeem our remaining $279 million principal amount senior notes that are due in 2024 for cash consideration of $286 million.

Fairfax intense in accordance with the regulations of the capital market authority in Kuwait to initiate the mandatory tender offer to all other holders of golf insurance shares and expect the transaction will close in the second quarter of 2024.

I will close with a few comments on our financial condition.

On December seven 2023, we completed an offering of $400 million principal amount of 6% unsecured senior notes due in 2033.

For net proceeds of $394 million and then subsequent to December 31, 23 on January 12 to 24. The company completed the reopening of those same notes for 200 million principal amount on January 29 2024.

What are you using a portion of those aggregate net proceeds from the issuances to redeem our remaining 279 million principal amount senior notes that are due in 2024 for cash consideration of $286 million.

Jen Allen: And then on February 14, 2024, we announced that on March 15, 2024, we will use the remainder of the net proceeds to redeem our Canadian $348.6 million principal amount of our senior notes that are due in 2025. The liquidity position of the company remains strong, with our cash and investments at the holding company at $1.8 billion at December 31, 2023, principally held in cash and short-dated investments, and access to our facility of $2 billion fully undrawn. At December 31, 2023, the excess of fair value over carrying value of our investments in non-insurance associates and a market-traded consolidated non-insurance subsidiary was $1 billion, compared to $310 million at December 31, 2022, with $315 million of that increase related to publicly traded Eurobanks.

And then on February 14th 2024, we announced that on March 15, 2024, you will use the remainder of the net proceeds to redeem our Canadian $348 6 million principal amount of our senior notes that are due in 2025.

The liquidity position of the company remains strong with our cash and investments at the holding company at $1 8 billion at December 31, 2023, principally held in cash and short dated investments and access to our facility of 2 billion fully undrawn.

At December 31, 2023, the excess of fair value over carrying value of our investments in non insurance associates and market traded consolidated non insurance subsidiary was 1 billion compared to $310 million at December 31, 22 with.

With $315 million of that increase related to publicly traded eurobank.

Jen Allen: The pre-tax excess of $1 billion is not reflected in the company's book value per share but is regularly reviewed by management as an indicator of investment performance. The company's debt-to-cap ratio, excluding our non-insurance companies, improved to 23.1% at December 31, 2023, compared to 23.7% at December 31, 2022, reflecting increased common shareholders' equity as a result of the record net earnings that we reported in 2023. And this was partially offset by the issuance of $400 million principal amount of the 6% unsecured note and the recognition of a note payable of $579 million relating to the golf acquisition.

Pre tax assets of 1 billion is not reflected in the company's book value per share, but is regularly reviewed by management as an indicator as investment performance.

The companys debt to cap ratio, excluding our non insurance companies improved to 23, 1% at December 31, 23, compared to 23, 7% at December 31 22.

<unk> increased common shareholders' equity as a result of the record net earnings that we reported in 'twenty three.

And this was partially offset by the issuance of our 400 million principal amount of the 6% unsecured notes and the recognition of a note payable of 579 million relating to the golf acquisition.

And lastly, our common shareholders' equity increased by $3 8 billion to $21 6 billion at December 31, 23 from $17 8 billion at December 31 22.

Prem Watsa: And lastly, our common shareholders' equity increased by $3.8 billion to $21.6 billion at December 31, 2023 from $17.8 billion at December 31, 2022, principally as a result of the company's record net earnings attributable to shareholders of Fairfax for the full year of 2023 of $4.4 billion. That was partially offset by the payments of common share and preferred dividends of $291 million and the purchase of approximately 111,000 subordinate voting shares for Treasury and $365,000 for cancellation for an aggregate cash consideration of $363 million, or approximately $764 per share. I conclude my remarks for the fourth quarter and full year 2023. I'll now turn the call back over to Prem. Thank you, Jan. Now, a few comments on the Muddy Waters report before we open it up for questions. The management team and the board of Fairfax have now reviewed all 72 pages of the Muddy Waters report and reviewed its allegations and insinuations. We categorically deny and refute all of them, without exception, as false and misleading.

Principally as a result of the company's record net earnings attributable to shareholders of Fairfax for the full year 'twenty three or $4 4 billion that was partially offset by the payment of common share and preferred dividends of $291 million and the purchase of approximately 111000 of subordinate voting.

Shares for Treasury, and 365000 for cancellation for an aggregate cash consideration of $363 million or approximately at $764 per share.

That concludes my remarks for the fourth quarter and full year 2023, I'll now turn the call back over to Pat. Thank you.

Thank you Jan now a few comments on the muddy waters report before we open it up for questions. The management team and the board of Fairfax has now reviewed all the 72 pages of the muddy waters report and reviewed the allegations and insinuations, we'd categorically deny and refute all of them.

Without exception as false and misleading.

Prem Watsa: To the best of our knowledge, MoneyWaters never attended our conference calls, never asked a question, never called us, or written to us, but instead went to CNBC during our quiet period with these one-sided, ill-informed allegations and insinuations in a transparent attempt to profit by short-selling our stock. They may have successfully done this with other companies, but they have woefully misjudged the strength of Fairfax Financial and Prospect We are confident the marketplace will reflect our strong fundamentals. But, as you can see, the market has already spoken. The stock price dropped by 12% last Thursday after the Muddy Waters report came out.

The best of our knowledge muddy waters that never attended our conference calls never asked a question called us or written written to us, but instead went to CNBC during our quiet period.

These one sorry, one sided ill informed allegations and insinuations and a transparent attempt to profit by short selling our stock.

They may have successfully done this with other companies, but they have woefully misjudged the strength of Fairfax financial and prospects.

We are confident that marketplace will reflect our strong fundamentals.

As you can see the market has already spoken a stock price dropped by 12% last Thursday. After the muddy waters report came out Rick laid out we are back of the price we were trading before their report.

Prem Watsa: A week later, we are back at the price we were trading before their report. A couple of points on their report before I pass it on to Jen Allen, our Chief Financial Officer. The short seller says Fairfax has not made a 15% return since 2008. We have discussed this repeatedly in our annual reports. This is not news.

Couple of points on their report before I pass it on to Jen Allen, our Chief Financial Officer.

The short seller says Fairfax has not made a 15% return since 2008.

I've discussed this repeatedly in our regular reports.

News.

Prem Watsa: Also, over 38 years, our book value has compounded at a rate of 18.9% annually, and our stock price has increased by 18%. More recently, in the last three years, our book value has increased by 25%, 22%, and 34%, and our stock price has doubled. Muddy Waters says Allied World was a poor investment.

So over 38 years, our book value has compounded at a rate of 18, 9% annually and our stock price by 18% more recently in the last three years, our book value has increased by 25%, 22% and 34% and our stock price is.

Doubled.

Marty waters saves Allied World was up for investment.

We know they're short, but allied world's gross premium was up 2.2 times since 2017 cumulative underwriting profit of $740 million and net income of $2 5 billion. Despite the.

Prem Watsa: We know they're short, but Allied World's gross premium is up 2.2 times since 2017, cumulative underwriting profit of $740 million, and net income of $2.5 billion, despite catastrophe losses of $2 billion. In our minds, Allied World is a star performer. Lastly, in the report, Muddy Waters questions the valuation of some of our companies. As many of you are aware, for companies, we have between 20% and 50% ownership re-equity accounts for these investments. At any point in time, the carrying value can be below market value or above market value. And quarterly, we review these investments for impairments.

<unk> re losses of $2 billion.

In our minds Allied world as a star performer.

Lastly, in the report Mortimore waters quest of the valuation of some of our investors as many of you are aware for companies rehab between 20, and 30% ownership reactivity account for these investments at any point in time, but carrying value can be below market value or above market value and quarterly.

We reviewed.

These investments were impairment at December 31, two.

Prem Watsa: At December 31, 2023, as Jen Allen just pointed out, equity accounted investments and consolidated non-insurance investments, in aggregate, exceed carrying values on our balance sheet by $1 billion. My Waters highlights a number of these investments in its report, all with carrying values above market value, never mentioning one that is carried below, clearly a one-sided argument. I will now pass this on to Jed Allen.

2023 that Dan Island, just pointed out.

Equity accounted investments and consolidated non insurance investments in aggregate exceed carrying values on our balance sheet by $1 billion.

Marty waters highlights a number of these investments in its report all with carrying value.

Above market value never mentioning one.

It's carried below.

Clearly a one sided argument.

We now pass it onto Jen Allen thank.

Jen Allen: Thank you, Prem. The Muddy Water 72-page short investment position report is principally focused on allegations involving inappropriate accounting and an unsupported view on valuations of select investments within Fairfax's portfolio. First, to set the stage, we remind everyone that Fairfax's financial reporting framework is IFRS and not US GAAP; as a Canadian public company, Fairfax adopted IFRS in 2010. I want to emphasize that to ensure the accuracy and integrity of our consolidated financial statements and related disclosures, Fairfax has robust processes for complex transactions and valuations that document our accounting positions, valuation methodology, and underlying support, which are then incorporated into the financial results of As a public company for over 38 years, Fairfax has always taken this responsibility very seriously. I will comment on the allegations contained in the Muddy Waters Report by grouping them into four categories and will provide further comments on some of the allegations.

Thank you prep the muddy water 72 page short investment position report is principally focused on allegations involving inappropriate accounting and unsupported view on valuations of select investments within Fairfax This portfolio.

First just at this stage, we remind everyone that Fairfax has financial reporting framework is <unk> and not U S. GAAP.

As a Canadian public company Fairfax adopted <unk> in 2010.

I want to emphasize that to ensure the accuracy and integrity over our consolidated financial statements.

And related disclosures Fairfax has robust processes for complex transactions and valuations.

Document, our accounting positions valuation methodology and underlying support which are that incorporated into the financial results of the Companys interim reports and audited annual reports.

As a public company for over 38 years Fairfax has always taken this responsibility very seriously.

I will comment on the allegations contained in the muddy waters reports by grouping them into four categories and will provide further comments and some of the allegations.

First is the fair value of Fairfax is an investment in digital insurance as disclosed in our prior period report. The company holds convertible preferred shares that are carried at fair value as well as common shares that are equity accounted for at a 49% investment in associates.

Jen Allen: The first is the fair value of Fairfax's investment in Digit Insurance. As disclosed in our prior period reports, the company holds convertible preferred shares that are carried at fair value as well as common shares that are equity accounted for as a result of our 49% investment in Associates. The mark to market gain recorded on Fairfax's investment in Digit Convertible Preferred Shares back in 2021 was based on third-party capital raises valuing Digit at $3.5 billion, with the capital raised led by Sequoia Capital, a large venture capital firm in the US. Fairfax's fair value of the investment in the Digit Convertible Preferred Shares is supported by a very robust quarterly review process that includes the company's discounted cash flow model that incorporates the cash flows received directly from Digit's management.

The Mark to market gain recorded on Fairfax is investment in digit convertible preferred shares back in 2021 was based off of third party capital raises valuing digit at three 5 billion with the capital raise led by so quiet capital a large venture capital firm in the U S.

Fairfax is fair value of the investment in the digit convertible preferred shares is supported by a very robust quarterly review process that includes the company's discounted cash flow model that incorporates the cash flows received directly from digits management. We then collaborate the results of that.

Jen Allen: We then collaborate the results of the DCF model by factoring in market specifics, such as the current growth in India, where Digit has increased its market share, and as well as compared to applicable market transactions. Contrary to the Muddy Waters report, Digit was profitable in 2021 under IFRS, as disclosed on its website, where they provide a reconciliation to the Indian Gap. Digit also was profitable, reporting net income of $30.6 million for the 12 months ended March 31, 2023 and for the nine months ended December 31, 2023 of $38.2 million.

DCF model by factoring in market specifics such as the current growth in India, where digit has increased its market share and as well as compare to applicable market transactions.

Contrary to the muddy waters report digit was profitable in 2021 under <unk>.

As disclosed on digits website, where they provide a reconciliation to Indian GAAP.

<unk> also was profitable reporting net income of $36 million for the 12 months ended March 31, 2023 and for the nine months ended December 31, 23 of $38 2 million.

Second valuations.

Jen Allen: Second, Valuations. I comment on our robust process for Level 3 private investments as demonstrated with Digit, and similar processes are followed to support the carrying values of our investments in Associates, and Goodwill and Intangibles recorded on our consolidated subsidiaries. Fairfax prepares value-in-use or discounted cash flow models that include cash flow projections obtained directly from management of the operating companies.

Commented on a robust process for level three private investments as demonstrated with digit and similar processes are followed to support the carrying values of our investments in associates and.

And goodwill and intangibles recorded on a consolidated subsidiaries.

Fairfax prefer prepares value in use or discounted cash flow models that include cash flow projections.

Came directly from management of the operating companies.

We then collaborate the results with models by factoring in market metrics, and compare where applicable to market transactions and peer comparable.

Jen Allen: We then collaborate the results with models by factoring in market metrics and, where applicable, comparing where applicable to market transactions and peer comparables. As an example, for the Recipe Take Private transaction, Fairfax prepared an accounting memo that was reviewed by our auditors, where it noted the arrangement agreement followed the recommendation of an independent Special Committee of Recipes' Board of Directors. The Special Committee had obtained an independent valuation prepared by Greenhill and Company Canada Limited and a Fairness Opinion which opined that the purchase price was fair and unanimously recommended the transaction.

As an example for the recipe take private transaction Fairfax prepared an accounting memo that was reviewed by our auditors where its noted the arrange the arrangement agreement followed the recommendation of an independent Special Committee of recipes board of directors.

The Special Committee had obtained an independent valuation prepared by Greenhill and company, Canada Ltd, and fairness opinion, which opined that the purchase price was fair and have unanimously recommended the transaction.

Jen Allen: Finally, on Recipe, it is to state that the difference between Recipe's local goodwill and intangibles, as audited by KPMG, and the goodwill and intangibles at the Fairfax level, audited by PwC, primarily relates to Fairfax's original 2015 acquisition of Recipe, or back then known as CARA, before the rebranding. Under IFRS 3, on acquisition of Recipe or CARA at the time, Fairfax was required to record the assets and liabilities of Recipe at fair value, including any recognized and unrecognized intangible assets. However, Recipe had created a number of very successful restaurant brands for which the brand names had not been ascribed any value on its local ballot sheet, given they had been internally created and therefore not permitted to be recognized under IFRS. These well-known brands included Swiss Chalet, Harvey's, and Montana's, three of Recipe's largest operations that represented 62% of Recipe's system sales at that time.

Recipes board of Directors, then determined that pursuing that transaction was best interest of recipe and recommended recipe shareholders to vote in favor of it.

Finally on recipe is to state that the difference between recipes local goodwill and intangibles as audited by KPMG and the goodwill and intangibles at the Fairfax level audited by Pwc.

Primarily relates to Fairfax is original 2015 acquisition of recipe or back then known as Kara before the rebranding.

Under <unk> III, an acquisition of recipe or care at the time Fairfax was required to record the assets and liabilities of recipe at fair value, including and any recognized and unrecognized intangible assets.

That could be had created a number of very successful restaurant brands for which the brand names had not been ascribed any value on recipes local balance sheet, given they had been internally created and therefore not permitted to be recognized under <unk>.

These well no known brands included Swiss Chalet, Harveys and Montana's three of recipes largest operations that represented 62% of recipe system sales at that time.

Jen Allen: Fairfax's carrying value of recipe is approximately six times EBITDA based on an enterprise value of eight times EBITDA, with system sales in 2023 of Canadian $3.6 billion. A few comments on Exco. Since its emergence from bankruptcy protection in 2019, the common shares of Exco only trade on the Pink Open Market or OTC Pink. The OTC Pink Market is recognized as one of the lowest tiers of the available marketplaces for trading over-the-counter stocks.

Fairfax is carrying value of recipe is approximately six times EBITDA based on an enterprise value of eight times EBITDA.

With system sales in 2023 of Canadian three 6 billion.

A few comments on exco since its emergence from bankruptcy protection in 2019, the common shares of XO Exco only trade in the pink open market or OTC pink.

The OTC pink market is recognized as one of the lowest tier of the available market places for trading over the counter stock the.

Jen Allen: The OTC traded value is not representative of fair value as the stock is very thinly traded in an illiquid market. This is on the basis that executed transactions are limited and lack sufficient frequency, bid-ask spreads for trades are not readily available, and price quotations are not developed using current information as Xcode's financial information is not publicly available and only accessible by shareholders. Share profit of Associates earned from Expo in 2023 was $129.1 million, or $564 per share, and $81.9 million, or $3.58 per share, in 2022.

The OTC traded value is not representative of fair value as the stock is very thinly traded in an illiquid market.

This is on the basis that executed transactions are limited and lacked sufficient frequency bid ask spreads for trades are not readily available and price quotations are not developed using current information as exports financial information is not publicly available and only accessible by shareholders.

Share of profit of associates earned from Mexico in 2023 was $129 1 million or $5 64 per share.

And $81 9 million or $3 58 per share in 2022.

At December 31, 23, a fair value of Exco was approximately $19 per share compared to Fairfax is carrying value of $418 million or approximately $18 per share reflecting growth in exco. When you look at Fairfax is carrying value at December 31, 20 to about $12 50.

Jen Allen: At December 31, 2023, the fair value of Exco was approximately $19 per share, compared to Fairfax's carrying value of $418 million or approximately $18 per share, reflecting growth in Exco when you look at Fairfax's carrying value at December 31, 2022 of about $12.50 per share, carrying value in 2023 net earnings is just over three times. Looking at Quest, in accordance with IFRS in the fourth quarter of 2023, the company followed the quarterly value in use which resulted in a calculated value in use below equity method carrying value and as a result an impairment of approximately $53 million was recorded on Fairfax's investment in Quest, impairment have been reported on the company's invest when back in 2019, consisted of 190.6 million impairments related to Tomas Cook's Non-Cash Spinoff of Quest with a further 98.3 impairments recorded in 2020.

<unk> per share.

Carrying value in 2023 net earnings of just over three times.

Looking at quest and accordance with ire for us in the fourth quarter of 23. The company followed the quarterly value in use which resulted in a calculated value in use below equity method carrying value and as a result, an impairment of approximately 53 million was recorded on Fairfax is inverse.

<unk> and quest.

Additional impairments have been recorded on the Companys and back when back in 2019, a $190 6 million impairment was recorded related to Thomas Cook, India in all noncash spinoff of quest with a further $98 three impairment recorded in 2020.

Jen Allen: In 2021, Fairfax sold 3 million shares of Quest at Indian rupees 900 per share, above our carrying value. And then in 23, when the share price dropped, we bought 6.6 million shares at 384 Indian rupees per share. Quest's carrying value to EBITDA is approximately 15.8 times. The third category is accounting for transactions with third parties. The Odyssey, BRIT, and Allied World transactions were done with large, sophisticated, third-party investors with their own rigorous due diligence and government processes. I will provide some remarks on the Odyssey transaction where Fairfax sold 10% ownership in Odyssey, and the shares are classified as equity under IFRS. Fairfax has no obligation to redeem those shares, and the investors do not have the right to put the shares back to Fairfax. Fairfax is under no obligation to exercise its call option.

In 2021, Fairfax sold 3 million shares of quest at Indian rupees 900 per share above our carrying value.

And then in 'twenty three when the share price dropped we bought $6 6 million shares at 384 Indian rupee per share.

Quest is carrying value to EBITDA is approximately $15 eight times.

The third category is accounting for transactions with third parties.

The Odyssey Britt Allied World transactions were done with large sophisticated third party investors with their own rigorous due diligence and government processes.

I will provide some remarks on the Odyssey transaction, where Fairfax sold 10% ownership in Odyssey and the shares are classified as equity under a craft.

Fairfax has no obligation to redeem those shares the investors do not have the right to put the shares back to Fairfax and Fairfax is under no obligation to exercise its call options.

Jen Allen: After Fairfax's call options expire, a minority investor may IPO their shares or, failing that, request sale of the operating company with a priority on the proceeds. In 2021, Fairfax was balancing buying back its own shares, which the company viewed as being undervalued, and providing capital to its insurance operations to take advantage of the significant growth from the hard market. In December 21, Fairfax decided to sell a 10% stake in Odyssey Group at approximately 1.7 times book value to third-party participants, where the $900 million proceeds were used for a tender offer to buy back 2 million shares of Fairfax at 0.9% of book value or US$500 per share. When a minority stake in a subsidiary is sold to a third party, IFRS requires any difference between the sale price and the carrying value of only the shares sold, This applies whether it's a gain or a loss. There's no accounting policy choice to defer that gain or loss.

After Fairfax as call options expire a minority investor may IPO of their shares or failing that we'll cross sale of the operating company with a priority on the proceeds.

In 2021, Fairfax was balancing buying back our own shares, which the company viewed as being undervalued and providing capital to our insurance operations to take advantage of the significant growth from the hard market.

In December 'twenty, one Fairfax decided to sell a 10% stake in Odyssey group at approximately one seven times book value.

Two third party.

Participants.

We're at the 900 million proceeds were used for a tender offer to buy back 2 million shares of Fairfax at 0.9% price to book or U S $500 per share.

When a minority stake in a subsidiary is sold to a third party <unk> requires any difference between the sale price and the carrying value of only the share sold.

As an example, only the 10% Folden Odyssey to be recorded directly in equity <unk>.

Applies whether it's a gain or a loss, there's no accounting policy choice to defer that gain or loss.

Jen Allen: And my final remarks will be on the new accounting standard for insurance contracts, IFRS 17. Fairfax's transition impact for IFRS 17 as of January 1, 2022, the transition date, amounted to $150.2 million, or 1% of the common shareholder's equity. When compared to the correct peer group data points referenced in the E&Y report, Fairfax is well within the range of the peer group, which had transition impacts within the range of negative 2% to positive 3% of common shareholders' equity. However, fiscal 2023 included a free tax benefit of only $210 million related to IFRS 17.

And my final remarks will be on the new accounting standard for insurance contract Iff's 17.

Fairfax this transition impact thrive for 17 as of January 1st 2022, the transition date.

$90 million to $152 million or 1% of the common shareholders' equity.

When compared to the correct peer group data points referenced in the NY report Fairfax is well within the range of the peer group, which had transition impacts within the range of negative 2% to positive 3% of common shareholders equity.

Fiscal 2023 included a pretax benefit of only $210 million related to <unk> 17.

Irrespective incorrect data points used in the allegations. It's also not appropriate to compare Fairfax. This transition impact to other Canadian peers as many of those peers had elected to discount claims liabilities prior to the adoption of <unk> 17 to align with the reporting requirements of Asti.

Jen Allen: Irrespective of the incorrect data points used in the allegations, it's also not appropriate to compare Fairfax's transition impact to other Canadian peers, as many of those peers had elected to discount claims liabilities prior to the adoption of IFRS 17 to align with reporting requirements of OSPI. In contrast, pre-adoption of IFRS 17, Fairfax was not required to discount its claims liabilities as the holding company is not regulated by OSPI. Under IFRS 4 pre-adoption of IFRS 17 reporting on an undiscounted basis allowed us to remain comparable to our peers in the U.S., our largest market. A straight comparison is also not a true reflection of the underlying drivers, as Fairfax's business and claims maturity profiles are materially different than the comparables. Given more than 70% of the company's net reserves are from longer-tailed casualty classes, predominantly from risks written in the U.S. During 2022, interest rates moved significantly, therefore impacting Fairfax's net reserves to a greater degree due to the reserves having a longer duration of 3.8 years compared to Fairfax's very short duration on the fixed income portfolio at 1.6 years, which had resulted in the company recording unrealized losses on our bonds in 22 of 1.1 billion.

In contrast freed option of <unk> 17, Fairfax was not required to discount its claims liabilities as the holding company is not regulated by us Aussie.

Under <unk> for pre adoption of <unk> 17 reporting on an undisputed basis allowed us to remain comparable to our peers in the U S. Our largest market.

A straight comparison is also not a true reflection of the underlying drivers as Fairfax is business and claims maturity profiles are materially different than the comparable <unk>.

Given more than 70% of the Companys net reserves are from longer tail casualty classes predominantly from risks written in the U S.

During 2022 interest rates, new significantly therefore impacting Fairfax is net reserves to a greater degree due to the reserves, having a longer duration of three eight years compared to Fairfax is very short duration on the fixed income portfolio at 1.6 years, which had resulted in the company recording none.

Realized losses on our bonds and 20 to a $1 1 billion.

Under Ifr 17, discounting net reserves now more closely matches the fair value accounting required on the fixed income portfolio.

Jen Allen: Under IFRS 17, discounting net reserves now more closely matches the fair value accounting required for the fixed income portfolio. That concludes my remarks, and I'll pass the call back over to Prem. Thank you very much, Jed, for your very comprehensive comments. As you can see, Muddy Waters, a short seller, is using one-sided, uninformed allegations and insinuations to profit by short-selling our stock.

That concludes my remarks, and I'll pass the call back over to Prem.

Thank you very much Jed for your very comprehensive comments as you can see muddy waters, a short seller is using one sided in informed allegations and insinuation to profit by short selling our stock.

<unk> built our company over 38 years on honesty and integrity, Poland complete disclosure in our report to our shareholders Our board and management will protect our shareholders from false and misleading information.

Prem Watsa: We have built our company for 38 years on honesty and integrity, full and complete disclosure in our reports to our shareholders. Our board and management will protect our shareholders from false and misleading information. We will continue to focus on building our company over the long term. We now look forward to answering your questions. Please give us your name, your company name, and try to limit your questions to only one so that it's fair to all on the call.

To focus on building our company over the long term.

We now look forward to answering your questions. Please give us your name your company name and try to limit your questions to only one so that it's fair to all on the call.

Fabric, we're ready for the questions.

Thank you as a reminder, if you'd like to ask a question. Please press star followed by one on your phone keypad.

On mute your phone and record your name and company clearly when prompted.

Operator: Cedric, we're ready for the questions. Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your phone keypad. Unmute your phone and record your name and company clearly when prompted.

If you'd like to withdraw that question you first start to again to ask a question. Please press star followed by one.

Okay and our first question comes from Tom Mackinnon with BMO capital. Your line is open.

Thanks, very much good morning.

Tom McKinnon: If you'd like to withdraw that question, you may press star 2. Again, to ask a question, please press star followed by 1. Okay, and our first question comes from Tom McKinnon with GMO Capital. Your line is open. Thanks very much. Good morning.

I wanted to talk a little bit about the top.

Top line and what's happening at Odyssey in Brit, we had a non renewal.

Of our quota share agreement at Odyssey. If you can talk about what drove the decision to not renew that what are you seeing with respect to property cat.

Peter Clark: I want to talk a little bit about the top line and what's happening at Odyssey and Britt. We had a non-renewal of a quarter share agreement at Odyssey. If you can talk about what drove the decision not to renew that, what are you seeing with respect to PropertyCat and businesses with BRIT where you seem to be taking a bit more of a cautious stand, the kind of outlook with respect to D&O and cyber, and any other areas of concern? Markets seem to remain pretty firm, but there's always, you can always exercise some caution in some areas. So where do you see the best opportunities and kind of where do you see other areas where you should be cautious? Yeah, thank you, Tom. Peter, do you want to take that question? Sure. Thanks, Tom.

Businesses with Brit, where you seem to be taking a bit more of a cautious stand kind of outlook with respect to D&O and cyber.

And are any other areas of concern.

The markets seem to remain pretty firm, but Ah.

Theres always you can always exercise some caution in some lines so.

Where do you see the best opportunities and kind of where do you see other areas, where you should be cautious. Thanks.

Yes. Thank you Tom Peter you want to take that question.

Sure. Thanks, Tom.

Just I guess to address the Odyssey question first yes in the fourth quarter Odyssey Nonrenewed or large.

Residential property quota share around the.

Peter Clark: Just, I guess, to address the Odyssey question first, yeah, in the fourth quarter, Odyssey Non-Renewed, a large residential property quota share, around $340 million of unearned premium. They returned it to the client, and that reduced their premium in the fourth quarter. But for us, it just shows the discipline Odyssey has and the focus on underwriting profit. And for us, that's a great thing. They wrote that quarter share for about two years. In their minds, the margins were not there going forward, and they took the action necessary.

$340 million of unearned premium they returned to the.

To the client and that reduce their premium in the fourth quarter, but for US. It's it's it just shows the discipline Odyssey has and the focus on underwriting profit and Thats.

For us that's a that's a great thing.

And.

Dave They wrote that quota share for about two years in their mind the margins Werent there going forward and they took the action necessary. So that was very good on the bridge side.

Peter Clark: So that was very good. On the BRIT side, we mentioned in prior quarters that they were reducing their catastrophe exposure, rebalancing it, and you continue to see that coming through the top line in the premium. And a lot of the exposure they're dropping is in the binder business, which takes a little longer to run off, and that's why you've seen it come through a number of quarters. On the pricing side, on the reinsurance side, we're still seeing double-digit pricing from most of our companies, mainly on the property side. And then in insurance, mid-single digit price increases, with the exception, as you highlighted, D&O and Cyber, which had a lot of price increases over the last number of years, have been slowing down and actually reducing. So we haven't been growing in those lines as much. Next question, Cedric.

We mentioned in prior quarter quarters that they were reducing their cap other catastrophe exposure rebalancing yet.

And you continue to see that coming through the top line in the premium end.

And a lot of the exposure they are dropping as in the binder business, which takes a little longer to run off and that's why you've seen it come through a number of quarters.

On the pricing side.

You know on the reinsurance side, we're still seeing from most of our companies double digit.

Pricing.

Mainly on the property side.

And then in insurance you know me.

Mid mid single digit.

Price increases with the exception as you highlighted the DNO and cyber.

Which which had a lot of price increases over the last number of years has been slowing down and actually reducing.

So we haven't been growing in those lines as much.

Next question.

Cedric.

Nick Pree: Thank you. Our next question comes from Nick Pree with CIBC Capital Markets. Your line is open.

Thank you and our next question comes from Nik Priebe with CIBC capital markets. Your line is open.

Okay. Thanks for the question.

Peter Clark: Okay, thanks for the question. Maybe just staying in the same vein as Tom's question, sounds like the Odyssey Group non-renewal was a bit of a one-off in the quarter. With respect to BRIT, it sounds like the action taken to reduce property CAD exposure was the culprit of the lower top line there. Do you see that having a dampening effect on top line growth into 2024, or was that more of a Q4 phenomenon? Yeah, no; I think it was it was more of a 2023 effect.

Maybe just staying in the same vein as Toms question.

It sounds like the Odyssey group.

Non renewal was a bit of a one off in the quarter.

With respect to bridge it sounds like the action taken to reduce <unk>.

Pretty cat exposure was.

The culprit of lower topline there do you see that having a dampening effect on top line growth into 2024 or was that more of a Q4 phenomenon.

Yeah, No I think it was a it was it was more of a 2023.

Perfect.

Peter Clark: You'll see most of that has gone gone through their numbers already. And you can see the benefits in their combined ratio, you know, posting a record combined ratio since since we've owned BRIFT at around 91%. Mind you, they did benefit from, you know, catastrophes being lower this year than in past years. But, you know, we're very happy to see the actions that they've taken affect the bottom line and on the underwriting profit. But yeah, I think you'll see, you won't see a significant effect or see that effect coming through in 2020.

You'll see most of that have gone on gone through their numbers already and you can see the benefits in their combined ratio posting record combined ratio since since we've owned breath.

Ground, 91%.

Mind, you they did benefit from <unk>.

Catastrophes were lower this year than in past years, but.

We're very happy to see.

The actions that they've taken are affected on on the bottom line and on the underwriting profit.

Yeah, I think you'll see you won't see as significant effect or see that effect coming through in 2024.

Peter Clark: Okay. Thank you. Our next question comes from Carson Block with Muddy Waters. Your line is open. Hi. I appreciate you calling on me.

Understood. Okay. Thank you thanks Edwin.

Thank you and our next question comes from Carson block with Muddy waters. Your line is open.

I appreciate you all calling on me.

I guess with only one question.

Carson Block: I guess with only one question. We published five questions yesterday, and the first one that we're asking is for disclosure regarding associates that have been on the balance sheet at any time since Jan 1 of 2020. To summarize, what we're looking for is basically disclosure by associates of cash that's been invested versus cash that's come back, and also profits that have been booked, as well as contingent liabilities arising, say, with the disposal. Will you be disclosing these associate transactions? Thank you very much, Mr. Block, for your question. Jen, would you answer that?

We published we published five questions yesterday, and the first one that we're asking is for disclosure.

Regarding associates like it did on the balance sheet at any time since Jan one of 2022.

To summarize what we're looking for is basically disclosure by associates of cash that's been invested versus cash that's come back and also profits that have been booked as well as contingent liabilities.

Arising to stay with the disposals will you be clothing these associated transactions.

Thank you very much up as the block for your question.

Jen would you add to that sure.

Jen Allen: Sure. Our disclosure with respect to the associates is disclosed in respect of those transactions as applicable in our annual reports and in accordance with the IFRS framework that Fairfax follows. Well, rather than go for the bare minimum that IFRS requires, I mean, why not provide transparent, enhanced disclosure, you know, to be very investor-friendly? I mean, obviously, you could do the bare minimum, but why leave it there?

Our disclosure with respect to the associates is disclosed in respect of those transactions as applicable in our annual reports and in accordance with the IRS framework that Fairfax follows.

Well rather than going for the bare minimum that ifr's requires I mean, why not provide transparent enhanced disclosure you know it can be very investor friendly I mean, that's obviously you can do the bare minimum but.

Why why leave it there.

So Mr Block just for your information we have taken a lot of time to go through the allegations.

Prem Watsa: So, Mr. Block, just for your information, we've taken a lot of time to go through the allegations you've made. We've made the point very clearly that we will not tolerate false and misleading information. That's the reason we took time to explain all that to our shareholders. And so we appreciate your question. Next question, please. Thank you. Our next question comes from James Gorn with National Bank Financial. Your line is open.

We've made the point very clearly that we will not tolerate false and misleading information. That's the reason we've taken time to explain all but to our shareholders.

And so we appreciate your question next question. Please.

Thank you and our next question comes from James <unk> with National Bank Financial Your line is open.

Okay.

James Gorn: Yeah, thanks. Just on the interesting component forward. Yep. Good morning. Can you hear me?

Yeah. Thanks, just on the <unk>.

Interest income good morning, Jeremie moving forward.

Yes. Good morning can you hear me.

Yes.

Prem Watsa: Yeah. No problem. Okay. On the interest income side, the run rate is just over $2 billion today. How should we think about upside on that outlook for interest and dividend income on a consolidated basis? Is there more juice to squeeze, let's say, from extending duration, from expanding more into the corporate bonds asset allocation? Where can we see some upside? So, Jamie, that's a very good question. That's a big change for us. As I mentioned, that's where intrinsic value comes from.

Okay.

On the interest income outlook, a run rate of just over $2 billion today.

How should we think about upside on that on that outlook for the for interest and dividend income on a consolidated basis is there more is there more juice to squeeze, let's say from extending duration.

From expanding more into the corporate bonds.

Asset allocation, where can we see some upside.

So Jamie that's a very good question, that's a big change for us as I mentioned, that's where intrinsic value comes from that's the fact that we've got such a big bond portfolio now we've got an investment portfolio almost 65 billion.

Prem Watsa: That's the fact that we've got such a big bond portfolio now. We have an investment portfolio of almost $65 billion. Interest in dividend income, we basically locked in with treasuries, government bonds all over the place at $2 billion a year for the next four years, approximately. What can happen is if we get a soft landing, as people expect, then we'll be able to continue to renew these rates. But if you have a hard landing, interest rates, and government bond rates could come down, but the spread on corporates, as I've said previously, could increase, and our interest and dividend income could actually decrease. We don't know that, but we've got 2 billion pretty well locked up.

Interest and dividend income, we basically locked with treasuries.

Government bonds all over the place.

At $2 billion a year for the next four years approximately.

What can happen is if we get a soft landing as people expect then we'll be able to continue to.

Renew these grades.

But if you have a hard landing interest rates government bond rates could come down.

But the spread.

On corporates as I've said previously could increase and NII interest and dividend income can actually decrease we don't know that but we.

I've got.

2 billion pretty well locked up those lots of possibilities for US and then you add the interest our video AD the underwriting profit and the associated income by the way I Associate income Atlas has provided the.

Prem Watsa: There are lots of possibilities for us, and then you add the interest, then you add the underwriting profits, and the associate income. By the way, our associate income Atlas has provided disclosure because of the new bill program before they were taken private. They gave you a forecast of 300 million going to 600 million by 2025, and as of today, we still think that forecast is appropriate. So when you put all of that together, we look at that operating income of 4 billion as a pretty conservative number. So, Jamie, perhaps we could take one last question. Cedric, is there one more question? Uh, Tim, your line is still open. If not, we'll move on. Our next question comes from Scott Helenic with RBC Capital Markets. Your line is open. Oh yeah, good morning. Yeah, just a quick question on the reserve releases. They were a pretty meaningful quarter. You kind of compare that to some of the peers that are reporting weaker reserve levels. I just wonder if you could give more detail on that.

Disclosure.

Because of the new build program before they were taken private they give you in our forecast $300 billion going to 600 million by 2025 and as of today, we still think that forecast is appropriate.

So when you put all of that together.

We look at that operating income of 4 billion is pretty conservative number.

Yeah.

So Jamie.

Perhaps we could take one last question.

Cedric.

One more question.

Jeremy Your line is still open.

If not we'll move on our next question comes from Scott <unk> with RBC capital markets. Your line is open.

Yeah, Good morning, Scott.

Yes, just a quick question on the reserve releases, they were pretty meaningful quarter.

Kind of compare that to some of the peers that are reporting weaker reserving.

I was wondering if you could give detail on that I'm sure you did a year end reserve review, but I'm. Just wondering if you can give some detail on the either segment or line or accident, your or anything that kind of drove that in the quarter.

Scott Helenic: I'm sure you did a year-end reserve review, but just wondering if you can give some detail on either the segment or line or accident year or anything that kind of drove that in the quarter. Was it widespread, or were there specific areas that we got the benefit from? Yes, Scott, that's a good question, and before Peter answers, let me just say that we have had a long history of reserve redundancies. And we're very conservative in our reserve setting, as we should be, and we think over time that our reserve releases could well be significant. But with that, Peter, do you want to address that question?

It was widespread or are there specific areas, where you got the benefit from.

Yes, Scott that's a good question then.

Peter So let me just say that.

We've got a long history of reserve redundancies and.

We're very conservative reserving as they should be and we.

We think over time that.

Our reserve releases.

Could well be significant but with that.

Peter you want to address that question.

Sure Yeah no.

Prem Watsa: Sure. As we've mentioned before, during the fourth quarter, all our insurance and reinsurance operations go through thorough actuarial reviews. Some do them more often, but the fourth quarter is when we do our full reviews.

As we've mentioned before during the fourth quarter, our all our insurance and reinsurance operations go through thorough actuarial reviews.

Some do it more often but in the fourth quarter is when we do our full reviews.

Peter Clark: We continue to see, in aggregate, favourable developments like we've seen in the past. You know, similar to the industry, there has been some development in Allied and Krumm Forster in the 2016 and 2018 years, but more than offset or offset by favorable developments on other lines of business and in the more recent years. I think our companies are still being very prudent in the hard market years 2020, 2021, 2022, holding back from a lot of the favorable development that they are seeing in those lines and just waiting that through to see how it ultimately plays out. We are very focused on the effects of inflation and claims inflation in particular, but generally speaking, we think our reserve is in a very good position, which we're hoping going forward will benefit us.

And yeah, we continue to see in aggregate.

Favorable development.

Like we've seen in the past and.

Similar to the industry there has been some development in.

In the Allied and Crum <unk> Forster under 2016, and 2018 years, but more than offset or offset by favorable development on other lines of business and the more recent years.

I think our companies are still being very prudent on the hard market years, the 2020, 2021 2022.

Holding back from a lot of the.

A lot of the.

Favorable.

Development that they're seeing in those lines and just waiting that weighting that through for the.

To see how it ultimately plays out we're very focused on.

On the.

The effects of inflation and in claims inflation in particular, so but generally speaking we think our reserves in a very good position in them and.

We're hoping going forward will benefit us.

Peter Clark: Thank you, Peter. It's just past 9.30 now, so we thank you all for joining us on this call. We particularly thank our loyal long-term shareholders who have supported us for so many years.

Thank you Peter this past 930 now so we thank you all for joining us on this call, we particularly thank our loyal long term shareholders, who supported us for so many years.

Prem Watsa: We're looking forward to our annual report coming out and then to see you all at our annual general meeting in Toronto on April 11th. So thank you very much, Cedric, and this will end the call. Thank you. Thank you, and that concludes today's conference. Speakers, you may stand by for post-conference. Okay, you guys are in post-conference.

Looking forward to our annual report coming out and then for <unk>.

See you all at our annual General meeting in Toronto on April 11, but thank you very much Cedric and this will end the call. Thank you.

Thank you and that concludes today's conference you may all disconnect at this time.

Speakers you may standby for post conference.

Okay, you guys are in post conference.