Q2 2024 Fairfax Financial Holdings Limited Earnings Call

Operator: Good morning, and welcome to Fairfax's 2024 second quarter results conference call. Your lines have been placed in a listen-only mode.

Good morning, and welcome to Fairfax 2024 second quarter results Conference call. Your lines have been placed in a listen only mode. After the presentation. We will conduct an answer question and answer session at that time I'd like if you'd like to ask a question press star one on your phone keypad for time sake, we ask that you limit.

Operator: Good morning and welcome to Fairfax 2024 second quarter results conference call. Your lines have been placed in a listen-only mode. After the presentation, we will conduct an answer session. At that time, I'd like, if you'd like to ask a question, press star one on your phone keypad. For time's sake, we ask that you limit your questions to one. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Derek <unk>: Your questions to one today's conference is being recorded if you have any objections you may disconnect. At this time your hosts for today's call is Peter Clark with opening remarks from Mr. Derek <unk>.

Operator: After the presentation, we will conduct a question and answer session. At that time, if you'd like to ask a question, press star 1 on your phone keypad. For time's sake, we ask that you limit your questions to one. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Your host for today's call is Peter Clarke, with opening remarks from Mr. Derek Bulas.

Peter Clarke: Your host for today's call is Peter Clarke, with opening remarks from Mr. Derek Bulas.

Mr. Bula: Mr. Bula please begin.

Derek Bulas: Mr. Bulas, please begin.

Derek Bulas: Good morning and welcome to our call to discuss Fairfax's 2024 second quarter 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 perspectives, which has been filed with Canadian securities regulators and is available on C-DAR.

Derek Bula: Good morning, and welcome to our call to discuss Fairfax is 2024 second quarter 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.

Derek Bulas: Good morning, and welcome to our call to discuss Fairfax's 2024 second quarter 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'll now turn the call over to our President and COO, Peter Clarke. Thank you, Derek.

<unk>, 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 and now I'll turn the call over to our President and C O O Peter Clark.

Derek Bulas: Fairfax describes any intention or obligation to update or revise any forward-looking statements, except as required by applicable securities law.

Peter Clarke: I'm now turning the call over to our President and COO, Peter Clarke. Thank you, Derek.

Derek.

Peter Clarke: Good morning and welcome to Fairfax's 2024 second quarter conference call. I plan to give you some highlights and then pass the call to Wade Burton, our President and Chief Investment Officer of Hamblawatsa, to comment on investments, and Jen Allen, our Chief Financial Officer, to provide some additional financial details. In the second quarter of 2024, we had net earnings of $915 million, with strong operating income from our insurance and reinsurance operations, adjusted to a discounted basis and before risk margin of $1.1 billion.

Peter Clarke: Good morning and welcome to Fairfax's 2024 second quarter conference call. I plan to give you some highlights and then pass the call to Wade Burton, our president and chief investment officer of Hamilu, Odsa, to comment on investments in general and our chief financial officer to provide some additional financial details. In the second quarter of 2024, we had net earnings of 915 million with strong operating income from our insurance and reinsurance operations adjusted to an undiscounted basis and before risk margin of 1.1 billion. This is up 23% or it's approximately 200 million from the second quarter of 2023.

Peter Clark: Morning, and welcome to Fairfax is 2024 second quarter Conference call I plan to give you some highlights and then pass the call to Wade Burton, our President and Chief investment Officer of Pam Lavazza to comment on investments and Jen Allen, our Chief financial officer to provide some additional financial details.

Peter Clarke: This is up 23%, or it's approximately $200 million from the second quarter of 2020. Driving this result was underwriting income from our property and casualty insurance and reinsurance companies of $370 million in the quarter and a combined ratio of 93.9. Consolidated Interest and Dividend Income was $614 million in the quarter, up from $465 million in the second quarter of 2023. Benefiting from an increased investment portfolio, now approximately $66 billion, increasing rates over the last number of years, and from our mortgage portfolio.

In the second quarter of 2024, we had net earnings of $915 million with strong operating income from our insurance and reinsurance operations adjusted to an on discounted basis and before risk margin of $1 1 billion.

Peter Clark: This is up 23% or approximately $200 million from the second quarter of 2023.

Peter Clarke: Driving this result was underwriting income from our property and casualty insurance and reinsurance companies of 307 million in the quarter and a combined ratio of 93.9. Insolidated interest and dividend income was 614 million in the quarter, up from 465 million in the second quarter of 2023. Benefiting from an increased investment portfolio now approximately 66 billion, increasing rates over the last number of years and from our mortgage portfolio. Insolidated share profits of associates in the second quarter was 221 million. This is down from 269 million in the second quarter of 2023. Primarily relating to associate income of golf insurance, which is now consolidated, and Fairfax India's IIFL finance now marked a market accounting and losses of Fairfax India's landmark chemicals.

Peter Clark: Driving this result was underwriting income from our property and casualty insurance and reinsurance companies up $370 million in the quarter and a combined ratio of $93 nine.

Peter Clark: Consolidated interest and dividend income was $614 million in the quarter up from $465 million in the second quarter of 2023.

Peter Clark: Benefiting from an increased investment portfolio now approximately 66 billion increasing rates over the last number of years and from our mortgage portfolio.

Consolidated share of profits of associates in the second quarter was 221 million. This is down from $269 million in the second quarter of 2023.

Peter Clarke: Consolidated share of profits of associates in the second quarter was $221 million. This is down from $269 million in the second quarter of 2023, primarily relating to associate income of golf insurance, which is now consolidated, and Fairfax India's IIFL Finance, now mark-to-market accounting, and Losses at Fairfax, India, and Mar-a-Camara. Our two most significant associate investments, Eurobank and Poseidon, continue to perform very well and make up a significant amount of our associate earnings.

Peter Clark: Primarily relating to associate income of golf insurance, which is now consolidated and Fairfax, India is I I F. L finance now mark to market accounting.

Peter Clark: And losses at Fairfax, India's Denmark chemicals.

Peter Clarke: Our two most significant associate investment Euro Bank and Poseidon continue to perform very well and make up a significant amount of our associate earnings. Net gains on investments of 242 million in the quarter comprised realized and marked a market gains on equity exposures of 377 million. variant. That losses on bonds of $191 million due to increasing interest rates and other gains of $55 million, primarily preferred shares. The net gains on investments do not include the expected pre-tax gain of $390 million on the sale of Stelco that was announced in July and is subject to shareholder and regulatory approvals and other customary closing conditions.

Peter Clark: Our two most significant associate investments eurobank and precise and continue to perform very well and make up a significant amount of our associate earnings.

Peter Clark: Net gains on investments of $242 million in the quarter comprised realized and mark to market gains on equity exposures of $377 million.

Peter Clarke: Net gains on investments of $242 million in the quarter, comprised realized and marked-to-market gains on equity exposures of $377 million, net losses on bonds of $191 million due to increasing interest rates, and other gains of $55 million, primarily preferred shares. The net gains on investments do not include the expected pre-tax gain of $390 million on the sale of Stelco that was announced in July and is subject to shareholder and regulatory approvals and other customary closing conditions.

Peter Clark: Net losses on bonds of $191 million due to increasing interest rates and other gains of $55 million primarily preferred shares.

Peter Clark: The net net gains on investments do not include the expected pretax gain of $390 million on the sale of Stelco that was announced in July.

Peter Clark: And is subject to shareholder and regulatory approvals and other customary closing conditions.

Peter Clarke: We have said many times in the past net gains or losses on investments only make sense over the long term and will fluctuate quarter to quarter and, for that matter, year to year. As mentioned in previous quarters, our bulk value per share of $980 does not include unrealized gains or losses in our associated investments and our consolidated investments, which are marked at market. At the end of the second quarter, the fair value of these securities is an excess of carrying value by $1.5 billion in unrealized gain position or $68 per share on a pre-tax basis.

We have said many times in the past net gains or losses on investments only make sense over the long term and will fluctuate quarter to quarter and for that matter year to year.

Peter Clarke: As we have said many times in the past, net gains or losses on investments only make sense over the long term and will fluctuate quarter to quarter and, for that matter, year to year. As mentioned in previous quarters, our book value per share of $980 does not include unrealized gains or losses on our associate investments and our consolidated investments, which are not mark-to-market. At the end of the second quarter, the fair value of these securities is in excess of carrying value by $1.5 billion, an unrealized gain position, or $68 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 the risk adjustment.

Peter Clark: As mentioned in previous quarters, our book value per share up $980 does not include unrealized gains or losses in our associate investments and our consolidated investments, which are not mark to market.

Peter Clark: At the end of the second quarter. The fair value of these securities is in excess of carrying value by $1 5 billion and unrealized gain position position or $68 per share on a pretax basis.

Peter Clarke: Under IFRS 17, our net earnings are affected by the discounting of our insurance liabilities and the application of a risk adjustment. In the second quarter of 2024, our net earnings benefited by $230 million pre-tax from the effects of discounting losses during the quarter, changes in the risk margin, the unwinding of the discount from previous years, and changes in the discount rate on prior year insurance liabilities. As interest rates move up and down, we will see positive or negative effects on net earnings from discounting. The benefit in the second quarter of 2024 on discounting includes a gain of 161 million from the effect of changes in interest rates.

Under Ifr at 17, our net earnings are affected by the discounting of our insurance liabilities and the application of the risk adjustment.

Peter Clarke: In the second quarter of 2024, our net earnings benefited by $230 million pre-tax from the effects of discounting losses occurring in the quarter, changes in the risk margin, the unwinding of the discount from previous years, and changes in the discount rate on prior year insurance liability. As interest rates move up and down, we will see positive or negative effects on net earnings from discounting.

Peter Clark: In the second quarter of 2020 for our net earnings benefited by 230 million pretax from the effects of discounting losses occurring in the quarter changes in the risk margin the unwinding of the discount from previous years and changes in the discount rate.

Peter Clark: Prior year insurance liabilities.

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

Peter Clarke: The benefit in the second quarter of 2024 on discounting includes a gain of $161 million from the effect of changes in interest rates. We've benefited from increasing rates. This partially offsets the mark-to-market losses on our bond portfolio of $191 million, which is included in our net gains on investment. Our book value per share at June 30, 2024 was $980 compared to $940 per share at December 31, 2023, an increase of 6% adjusted for the $15 dividend paid in the first quarter.

Peter Clark: The benefit in the second quarter of 2024 on discounting includes a gain of $161 million from the effect of changes in interest rates, we benefited from increasing rates.

Peter Clarke: We've benefited from increasing rates. This partially offsets the mark-to-market losses on our bond portfolio of $191 million, which is included in our net gains on investments. Our book value per share at June 30, 2024, was $980 compared to $940 per share at December 31, 2023, an increase of 6% adjusted for the $15 dividend paid in the first quarter.

Peter Clark: This partially offsets the mark to market losses on our bond portfolio of $191 million, which is included in our net gains on investments.

Peter Clark: Our book value per share at June 32024 was $980 compared to 940 per share at December 31, 2023.

Peter Clark: An increase of 6% adjusted for the $15 dividend paid in the first quarter.

Peter Clarke: As we said for the last number of quarters, the most important point we can make for you is to repeat what we've said in the past. For the first time in our 38-year history, we can say to you, we expect, of course, no guarantees, sustainable operating income of $4 billion. Operating income consisting of $2 billion plus from interest and dividend income, $1.25 billion plus from underwriting profit with normalized catastrophe losses, and $750 million from associates and non-interference companies. Fluctuations in stock and bond prices will be on top of that, and this only really matters over the long term.

Peter Clark: As we said for the last number of quarters. The most important point, we can make for you is to repeat what we've said in the past.

Peter Clarke: As we said in the last number of quarters, the most important point we can make for you is to repeat what we've said in the past. For the first time in our 38-year history, we can say to you we expect, of course, no guarantees, sustainable operating income of $4 billion, operating income consisting of $2 billion plus from interest and dividend income, one and a quarter billion plus from underwriting profit, with normalized catastrophe losses, and $750 million from associates and non-insurance companies. Fluctantities in stock and bond prices will be on top of that. And this only really matters over the long term.

Peter Clark: For the first time in our 38 year history, we can say to you. We expect of course, no guarantees sustainable operating income of $4 billion operating income consisting of $2 billion plus from interest and dividend income.

Peter Clark: One in a quarter billion plus from underwriting profit.

Peter Clark: With normalized catastrophe losses and.

Peter Clark: $750 million from associates and non insurance companies.

Peter Clark: Fluctuations in stock and bond prices will be on top of that.

Peter Clark: And this only really matters over the long term.

Peter Clarke: In the second quarter, we announced Gobi Aptipin has been appointed Chairman and Chief Executive Officer of Fairfax Asia. Gobi has done an outstanding job over his 23 years with Fairfax and Fairfax Asia. Asia. Over this time period, Gobi has been the Chief Executive Officer of each of Fairfax's Falcon Insurance in Hong Kong and Pacific Insurance in Malaysia, and has been the Vice Chairman of Fairfax Asia since 2015. Also in the quarter, we were pleased to announce that, effective January 1, 2025, Davidson Patisse will become President and Chief Executive Officer of Zenith Insurance, and Kari Van Dundee will move to Executive Chair.

Gobi Pathy: In the second quarter, we announced Gobi out to Penn has been appointed Chairman and Chief Executive Officer of Fairfax Asia.

Peter Clarke: In the second quarter, we announced Gobi Atthaphan has been appointed Chairman and Chief Executive Officer of Fairfax, Asia. Gobi has done an outstanding job over his 23 years with Fairfax and Fairfax Group. Over this time period, Gobi has been the chief executive officer of each of Fairfax's Falcon Insurance in Hong Kong and Pacific Insurance in Malaysia, and has been the vice chairman of Fairfax Asia since 2015. Also in the quarter, we were pleased to announce that, effective January 1, 2025, Davidson Patis will become President and Chief Executive Officer of Zenith Insurance, and Kari Van Gundy will move to Executive Chair.

Speaker Change: <unk> has done an outstanding job over his 23 years with Fairfax and Fairfax Asia.

Gobi Vaidiswaran: Over this time period <unk> has been the chief Executive officer of each of Fairfax as Falcon insurance in Hong Kong and Pacific Insurance in Malaysia, and has been the vice chairman of Fairfax Asia since 2015.

Speaker Change: Also in the quarter, we were pleased to announce that effective January one 2025, Davidson put teeth will become president and Chief Executive officer of Zenith insurance.

Peter Clarke: Over the last 20 years, Davidson has held increasing, broader leadership roles at Zenith, most recently as president, and has helped build Zenith into the great company it is today. Kari, who has done an outstanding job leading Zenith over the past 10 years, will remain as Executive Chair.

Speaker Change: And car, even gundy will move to executive chair.

Peter Clarke: Over the last 20 years, Davidson has held increasingly broader leadership roles at Zenith, most recently as President, and has helped build Zenith into the great company it is today. Kari, who has done an outstanding job leading Zenith over the past 10 years, will remain as Executive Chair.

Speaker Change: Over the last 20 years Davidson has held the increasing broader leadership roles at Zenith. Most recently as president and has helped build <unk> into the great company. It is today.

Speaker Change: Karri, who has done an outstanding job, leading <unk> seen that over the past 10 years will remain as executive chair.

Peter Clarke: As mentioned last quarter with the internal succession at Odyssey Group, these are all great examples of the internal succession we want to achieve at all our companies. Moving on to our insurance and re-enturance operations, our insurance and re-enturance business wrote 8.9 billion of gross premium in the second quarter of 2024, up 10.8% versus the second quarter of 2023. The growth was driven by the consolidation of Gulf Insurance, whose operating results were consolidated into our results beginning January 1, 2024. Excluding Gulf's premium of 860 million, gross premium was up approximately 1%. Our North American insurance segment increased gross premiums by 122 million in the second quarter of 2024, or 5.5% from forced or grew 7.8%.

Speaker Change: As mentioned last quarter with the internal succession that Odyssey group. These are all great. Examples of the internal succession, we wanted to achieve at all our companies.

Peter Clarke: As mentioned last quarter with the internal succession at Odyssey Group, these are all great examples of the internal succession we want to achieve at all our companies. Moving on to our insurance and reinsurance operations, Our insurance and reinsurance business wrote $8.9 billion of gross premium in the second quarter of 2024, up 10.8% versus the second quarter of 2024. The growth was driven by the consolidation of Gulf Insurance, whose operating results were consolidated into our results beginning January 1, 2024, excluding Golf's premium of $816 million. Gross premium was up approximately $1. Our North American insurance segment increased gross premiums by $122 million in the second quarter of 2024, or five and a half percent. Crumb Forestry grew by 7.8%.

Speaker Change: Moving onto our insurance and reinsurance operations.

Peter Clarke: Northbridge was up 5.1% in Canadian dollars, while ZNS Gross Premiums were down 3.3% in the second quarter of 2024 compared to the second quarter of 2023 due to the continued competitive workers' compensation market. Our global insurer and reinsurer segment decreased modestly, with gross premiums written at $4.8 billion in the quarter, down 2.1% versus the second quarter of 2023. Odyssey's gross premiums were down 9.5% due to lower premium volume in its crop business and the impact of the previously disclosed non-renewal of a large quarter share in the fourth quarter of 2023. Excluding the quarter share contract, Odyssey's reinsurance business was up 13% in the second quarter of 2024.

Speaker Change: Our insurance and reinsurance business wrote $8 9 billion of gross premium in the second quarter of 2024 up 10, 8% versus the second quarter of 2024.

Speaker Change: The growth was driven by the consolidation of golf insurance, whose operating results were consolidated into our results beginning January one 2024.

Speaker Change: Excluding golf's premium up $816 million gross premium was up approximately 1%.

Speaker Change: Our North American insurance segment increased gross premiums by $122 million in the second quarter of 2024, or five 5% Crum <unk> Forster grew seven 8%.

Peter Clarke: Northbridge was up 5.1% in Canadian dollars, while Zenith's gross premiums were down 3.3% in the second quarter of 2024 compared to the second quarter of 2023 due to the continued competitive workers' compensation market. Our global insurer and re-enture segment decreased modestly, with gross premiums written of 4.8 billion in the quarter, down 2.1% versus the second quarter of 2023. Odyssey's gross premiums were down 9.5% due to lower premium volume in its crop business and the impact of the previously disclosed non-renewal of a large quarter share in the fourth quarter of 2023. Excluding the quarter share contract, Odyssey's re-entrance business was up 13% in the second quarter of 2024.

Speaker Change: North Bridge was up five 1% in Canadian dollars.

Speaker Change: While zns gross premiums were down three 3% in the second quarter of 2024 compared to the second quarter of 2023.

Speaker Change: Due to the continued competitive workers' compensation market.

Speaker Change: Our global insurer and Reinsurer segment decreased modestly with gross premiums written of $4 8 billion in the quarter down two 1% versus the second quarter of 2023.

Odyssey: Odyssey's gross premiums were down nine 5% due to lower premium volume minutes crop business and the impact of the previously disclosed non renewal of a large quota share in the fourth quarter of 2023.

Odyssey: Excluding the quota share contract odyssey's reinsurance business was up 13% in the second quarter of 2024.

Peter Clarke: Bridge's premium was down 6.5% or 72 million in the quarter through the trimming of positions in financial lines, cyber and casualty business, and property at T. While Ally world was up 8%, led by its re-enturance segment which had double digit quotes. Our international insurance and re-enturance operations gross premium was up significantly in the second quarter of 2024, with gross written premium of 1.8 billion, up over 90 percent or 844 million. The growth was primarily the result of the consolidation of golf insurance that added 816 million of gross premium in our international operations. Excluding golf insurance, our international operations, gross premiums were up 3%.

Odyssey: Written premium was down six 5% or $72 million in the quarter through the trimming of positions in financial lines, cyber and casualty business and property at Ts.

Peter Clarke: Brits premium was down six and a half percent, or 72 million in the quarter, due to the trimming of positions in financial lines, cyber, and casualty business, and property, while Ally World was up 8%, led by its reinsurance segment, which had double digit quotes. Our international insurance and reinsurance operations gross premium was up significantly in the second quarter of 2024, with gross written premium of $1.8 billion, up over 90%, or $844 million.

Odyssey: While Allied World was up 8% led by its reinsurance segment, which had double digit growth.

Odyssey: Okay.

Odyssey: Our international insurance and reinsurance operations gross premium was up significantly in the second quarter of 2024.

Odyssey: With gross written premium of $1 8 billion up over 90% or $844 million the.

Peter Clarke: The growth was primarily the result of the consolidation of golf insurance that added $860 million of gross premium in our international operation. Excluding golf insurance, our international operations gross premiums were up 3%. With the closing in the fourth quarter of 2023 of our acquisition of an additional 46% of golf insurance and an additional 7% we bought in April of 2024, approximately 20% of our consolidated gross premium is now coming from our international operation.

Odyssey: The growth was primarily the result of the consolidation of golf insurance that added $816 million of gross premium in our international operations.

Odyssey: Excluding golf insurance, our international operations gross premiums were up 3%.

Peter Clarke: With the closing in the fourth quarter of 2023 of our acquisition of an additional 46% in golf insurance and an additional 7% we bought in April of 2024. Approximately 20% of our consolidated gross premium is now coming from our international operations. The addition of golf insurance in our consolidated results provides further diversification and scale within our insurance and re-enturance operations. We continue to be very excited about the long-term prospects of our international operations, and we expect they will be a significant source of growth over time. Led by excellent management teams, we have a strong footprint in Asia, the Middle East, Eastern Europe, South Africa, and Latin America.

Odyssey: With the closing in the fourth quarter of 2023 of our acquisition of an additional 46% in golf insurance and then an additional 7% we bought in April of 2020 for approximately 20% of our consolidated gross premium is now coming from our international operations.

Peter Clarke: The addition of golf insurance to our consolidated results provides further diversification and scale within our insurance and reinsurance operations. We continue to be very excited about the long-term prospects of our international operations, and we expect they will be a significant source of growth over time. Led by excellent management teams, we have a strong footprint in Asia, the Middle East, Eastern Europe, South Africa, and Latin America.

Odyssey: The addition of golf insurance in our consolidated results provides further diversification and scale within our insurance and reinsurance operations.

Odyssey: We continue to be very excited about the long term prospects of our international operations.

Odyssey: And we expect they will be a significant source of growth over time.

Odyssey: Led by excellent management teams, we have a strong footprint in Asia, the Middle East Eastern Europe, South Africa, and Latin America.

Peter Clarke: Our combined ratio was 93.9 in the second quarter of 2024, producing underwriting profit of 370 million. The combined ratio included catastrophe losses of 164 million, adding 2.7 combined ratio points, with the Dubai floods costing 58 million and the remaining primarily from traditional catastrophe losses. This compares to the same combined ratio of 93.9 in the second quarter of 2023, which included catastrophe losses of 2.4 points. Our global insurance and re-entures posted a combined ratio of 93% and underwriting profit of 231 million in the second quarter. Brit had another good quarter with a combined ratio of 92.7 and 45 million of underwriting profit, reflecting the positive underwriting actions taken the last number of years.

Odyssey: Our combined ratio was $93 nine in the second quarter of 2024, producing underwriting profit of $370 million.

Peter Clarke: Our combined ratio was 93.9 in the second quarter of 2024, producing underwriting profit of $370 million. The combined ratio included catastrophe losses of $164 million, adding 2.7 combined ratio points, with the Dubai floods costing $58 million and the remaining primarily from attritional catastrophe losses. This compares to the same combined ratio of 93.9 in the second quarter of 2023, which included catastrophe losses of 2.4%. Our global insurers and reinsurers posted a combined ratio of 93% and underwriting profit of $231 million in the second quarter.

Odyssey: The combined ratio included catastrophe losses of $164 million, adding two seven combined ratio points with the Dubai floods costing $58 million and the remaining primarily from Attritional catastrophe losses.

Odyssey: This compares to the same combined ratio of $93 nine in the second quarter of 2023, which included catastrophe losses of two four points.

Odyssey: Our global insurers and reinsurers posted a combined ratio of 93%.

Odyssey: And under an underwriting profit of $231 million in the second quarter.

Peter Clarke: Britt had another good quarter with a combined ratio of 92.7 and $45 million of underwriting profit, reflecting the positive underwriting actions taken over the last number of years. Odyssey Group produced the largest underwriting profit in our group, with an underwriting profit of $101 million in the quarter and a combined ratio of 93.1, led by a strong performance again from its reinsurance business.

Britt: Britt had another good quarter with a combined ratio of $92 seven and $45 million of underwriting profit.

Britt: Reflecting the positive underwriting actions taken in the last number of years.

Peter Clarke: Odyssey Group produced the largest underwriting profit in our group, with underwriting profit of 101 million in the quarter and a combined ratio of 93.1, led by a strong performance again from its reinsurance business. While Allied World also had a strong quarter with a combined ratio of 93.2 and underwriting profit of 84 million. Our North American insurers had a combined ratio of 93.9 in the second quarter of 2024 and underwriting profit of 108 million. North Bridge had an outstanding quarter with underwriting income of 62 million and a combined ratio of 88.5, benefiting from strong margins and below average large losses in the quarter.

Britt: Odyssey group produced the largest underwriting profit in our group with underwriting profit of $101 million in the quarter and a combined ratio of 93 one.

Britt: Led by a strong performance again from its reinsurance business.

Peter Clarke: While Allied World also had a strong quarter with a combined ratio of 93.2 and underwriting profit of $84 million, our North American insurers had a combined ratio of 93.9 in the second quarter of 2024 and underwriting profit of 108. Northbridge had an outstanding quarter with underwriting income of $62 million and a combined ratio of 88.5, benefiting from strong margins and below average large losses in the quarter.

Britt: While Allied World also had a strong quarter with a combined ratio of 93 to an underwriting profit of $84 million.

Britt: Our North American insurers had a combined ratio of $93 nine in the second quarter of 2024 and underwriting profit of $108 million.

Britt: North Bridge had an outstanding quarter with underwriting income of $62 million and a combined ratio of $88 five.

Britt: Benefiting from strong margins and below average large losses in the quarter.

Peter Clarke: Chrome forced her out a combined ratio of 95.8 and underwriting profit of 44 million, while Zenith had a combined ratio of 98.9 with the benefit of favorable reserve development. Our international operations delivered a combined ratio of 96.6 and an underwriting profit of 32 million. Calinate Insurance in Eastern Europe had another excellent quarter with a combined ratio of 91.7, and our Latin American operations continued to pose strong underwriting results with a combined ratio of 94.6. Fairfax Asia and Bright both contributed to our underwriting profit, with a combined ratio of 95.6 and 97.3 respectively. Eurolight's non-life business had a difficult quarter with an underwriting loss of 2 million, driven by losses in its motorbook.

Britt: Crum <unk> Forster at a combined ratio of 95, eight and underwriting profit of $44 million, while Xena had a combined ratio of $98 nine with the benefit of favorable reserve development.

Peter Clarke: Crumb Forster had a combined ratio of 95.8, and an underwriting profit of $44 million, while Zenith had a combined ratio of 98.9, with the benefit of favorable reserve development. Our international operations delivered a combined ratio of 96.6 and an underwriting profit of $32 million. Colonnade Insurance in Eastern Europe had another excellent quarter with a combined ratio of 91.7, and our Latin American operations continued to post strong underwriting results with a combined ratio of 94.6.

Britt: Our international operations delivered a combined ratio of 96, six and an underwriting profit of $32 million.

Britt: Colonnade insurance and east Eastern Europe had another excellent quarter with a combined ratio of $91 seven and our Latin American operations continue to post strong underwriting results with a combined ratio of $94 six.

Peter Clarke: FairfaxAsia and Bright both contributed to our underwriting profit with a combined ratio of 95.6 and 97.3, respectively. Eurolite's lawn light business had a difficult quarter with an underwriting loss of $2 million, driven by losses in its motor book.

Britt: Fairfax Asia and bright both contributed to our underwriting profit with a combined ratio of 95, 6% 97 three respectively.

Britt: Your life non life business had a difficult quarter with an underwriting loss of $2 million driven by losses in its motor book.

Peter Clarke: And golf insurance had an elevated combined ratio in the quarter of 100.2, reflecting purchase price adjustments from the acquisition, higher losses on their gig, co-weight, medical program, business, motor business in Saudi, and hyperinflation accounting in Turkey. Excluding the PPA adjustments, golf combined ratio was approximately 98%. We expect over the course of the year, golf will continue to post normalized combined ratios similar to previous years. Our insurance and insurance companies continue to manage their business, and performance continues to be measured on underwriting profit on an undiscounted basis.

Peter Clarke: And Golf Insurance had an elevated combined ratio in the quarter of 100.2 reflecting purchase price adjustments from the acquisition, higher losses on their Gig Kuwait medical program, motor business in Saudi Arabia, and hyperinflation accounting in Turkey. Excluding the PPA adjustments, Golf's combined ratio was approximately 98%. We expect over the course of the year, Golf will continue to post normalized combined ratios, similar to previous years. Our insurance and reinsurance companies continue to manage their business, and performance continues to be measured on underwriting profit on an undiscounted basis.

Britt: And golf insurance had an elevated combined ratio in the quarter of $100 to re.

Britt: <unk> purchase price adjustments from the acquisition higher losses on their gig Kuwait Medical program.

Britt: <unk> sat business motor business in Saudi and hyperinflation accounting in Turkey.

Britt: Excluding the PPA adjustments golf combined ratio was approximately 98%.

Britt: We expect over the course of the year golf will continue to post normalized combined ratios similar to previous years.

Britt: Our insurance and reinsurance companies continue to manage their business and performance continues to be measured on underwriting profit on a on discounted basis for.

Peter Clarke: For disclosure purposes, we have provided in our press release an interim report for discounted combined ratio. For the second quarter, the discounted combined ratio was 82.2 compared to the undiscounted combined ratio of 93.9. In the quarter, our insurance and re-insurance companies had prior year favorable development of 132 million, or a benefit of 2.2 points on our combined ratio. This compares to 72 million in the second quarter of 2023, or 1.3 points on the combined ratio. Typically, there's not a lot of movement on reserves in the first half of the year, as full actuarial reserve reviews are done in the fourth quarter.

Peter Clarke: For disclosure purposes, we have provided in our press release and interim report the discounted combined ratio. For the second quarter, the discounted combined ratio was 82.2 compared to the undiscounted combined ratio of 93.9. In the quarter, our insurance and reinsurance companies had prior year favorable development of $132 million, or a benefit of 2.2 points on our combined ratio. This compares to $72 million in the second quarter of 2023, or 1.3 points on the combined ratio. Typically, there's not a lot of movement on reserves in the first half of the year as full actuarial reserve reviews are done in the fourth quarter.

Britt: For disclosure purposes, we have provided in our press release and interim report the discounted combined ratio.

Britt: For the second quarter, the discounted combined ratio was $82 two compared to the on discounted combined ratio of $93 nine.

Britt: In the quarter, our insurance and reinsurance companies had prior year favorable development of $132 million or a benefit of two two points on our combined ratio.

Britt: This compares to $72 million in the second quarter of 2023 or one three points on the combined ratio.

Britt: Typically there's not a lot of movement on reserves in the first half of the year as full actuarial reserve reviews are done in the fourth quarter.

Peter Clarke: Our overall reserves remain very strong.

Peter Clarke: Our overall reserves remain very strong, and the performance of our insurance and reinsurance operations has not gone unnoticed by the rating agency. In the quarter, our financial strength ratings and debt ratings were upgraded to A-plus and triple B-plus by S&P with a positive outlook. Allied World's A Financial Strength Rating and Fairfax's BBB Plus Debt Rating were put on a positive outlook by AMS, and Fitch revised the outlook on their triple B rating for Fairfax debt to positive. Through our decentralized operations, our insurance and reinsurance companies continue to thrive, consistently producing 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 Wade Burton to provide some additional comments on our investment.

Britt: Our overall reserves remain very strong.

Peter Clarke: The performance of our insurance and re-insurance operations have not gone unnoticed by the rating agencies. In the quarter, our financial strength ratings and debt ratings were upgraded to A plus and triple B plus by S&P with a positive outlook. Allied World's A financial strength rating and Fairfax's triple B plus debt rating were put on positive outlook by AMBAST, and FITCH revised the outlook on their triple B rating for Fairfax debt to positive. Through our decentralized operations, our insurance and re-insurance companies continue to thrive. Consistently producing solid underwriting profit and led by exceptional management teams. Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2024.

Britt: The performance of our insurance and reinsurance operations have not gone unnoticed by the rating agencies in the quarter, our financial strength ratings and debt ratings were upgraded to a plus and triple B plus by S&P with a positive outlook.

Britt: Allied world's a financial strength rating and Fairfax is triple B plus debt rating were put on positive outlook by a M best.

Britt: And Fitch revised the outlook on their triple B rating for Fairfax that to positive.

Britt: Through our decentralized operations, our insurance and reinsurance companies continue to thrive consistently producing solid underwriting profit and led by exceptional management teams. Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2024.

Wade Burton: I will now pass the call to Wade Burton to provide some additional comments on our investments. Thank you, Peter, and good morning, everyone. I would start by classifying things on the investment side of Fairfax is very stable. The investment portfolio stands at 66 billion at the end of the quarter. 37 billion is in fixed income, including 18 billion in US dollar and Canadian Treasuries. And another 4.9 billion in mortgages. In addition, we have approximately 9 billion in cash in short-term investments. The duration is 2.7 years, including cash, and the yield is 5.1%. With the short duration, very little credit risk, and given that we are in mostly liquid securities, we think the fixed income portfolio is in great shape to protect on the downside, to provide a good return, and to give us good flexibility to capitalize on opportunities as they come up.

Britt: I will now pass the call Wade Burton to provide some additional comments on our investments.

Wade Burton: Thank you Peter and good morning, everyone.

Wade Burton: Thank you, Peter. And good morning, everyone.

Wade Burton: I would start by classifying things on the investment side of Fairfax is very stable.

Wade Burton: I would start by classifying things on the investment side of Fairfax as very stable. The investment portfolio stands at $66 billion at the end of the quarter, $37 billion of which is in fixed income, including $18 billion in U.S. dollar and Canadian Treasuries and another $4.9 billion in mortgages. In addition, we have approximately $9 billion in cash in short-term investments. The duration is 2.7 years, including cash, and the yield is 5.1%

Wade Burton: Investment portfolio stands at 66 billion at the end of the quarter 37 billion is in fixed income <unk>.

<unk> 18 billion in U S dollar and Canadian treasuries.

Wade Burton: And another $4 9 billion in mortgages and.

Wade Burton: In addition, we have approximately 9 billion in cash and short term investments.

Wade Burton: Duration is two seven years, including cash and the yield is five 1%.

Wade Burton: With the short duration, very little credit risk, and given that we are in mostly liquid securities, we think the fixed income portfolio is in great shape to protect on the downside, provide a good return, and give us good flexibility to capitalize on opportunities as they come up. Run Rate Interest and Dividend Income is $2.45 billion. And as Prem has mentioned in past calls, we've never had this kind of visibility on the investment side.

Speaker Change: With the short duration very little credit risk and given that we are in mostly liquid securities. We think the fixed income portfolio is in great shape to protect on the downside to provide a good return and to give us good flexibility to capitalize on opportunities as they come up.

Wade Burton: Run rate interest and dividend income is 2.45 billion. And as Prem has mentioned in past calls, we've never had this kind of visibility on the investment side, and it puts Fairfax in an excellent position.

Speaker Change: Run rate interest and dividend income is $2 45 billion.

Prem: And as Prem has mentioned in past calls we've never had this kind of visibility on the investment side and it puts fairfax in an excellent position from an earnings and a capital perspective for the next few years.

Wade Burton: And it puts Fairfax in an excellent position from an earnings and a capital perspective for the next few years. In the $20 billion equity part of our portfolio, the biggest investments are Eurobank and Poseidon, making up $4 billion, or 20% of the total. Eurobank continues to do very well.

Wade Burton: From an earnings and a capital perspective for the next few years. On the 20 billion equity part of our portfolio, the biggest investments are Eurobank and Poseidon, making up 4 billion or 20% of the total. Eurobank continues to do very well, just reported a great quarter, on track to record earnings for the year. We're expecting well over 1.2 billion in net income in 2024. The balance sheet has never been stronger, with Basel 3 fully loaded quarter one of 16.2%. The team continues to work well together under the very capable hands of their CEO, Fokian Caravius.

Prem: On the 20 billion equity part of our portfolio. The biggest investments are euro bank, and Poseidon, making up $4 billion or 20% of the total.

Prem: Eurobank continues to do very well just reported a great quarter on track to record earnings for the year, we're expecting well over $1 2 billion and net income in 2024.

Wade Burton: We just reported a great quarter and are on track to record earnings for the year. We're expecting well over $1.2 billion in net income in 2024. The balance sheet has never been stronger, with Basel III fully loaded, core tier one of 16.2%. The team continues to work well together under the very capable hands of their CEO, Joaquin Caravillas. The bank has also paid its first dividend in more than 16 years, a nine euro cents per share dividend, which resulted in a 128 million dividend payment to Fairfax.

Prem: The balance sheet has never been stronger with Basel III fully loaded core tier one of 16, 2%.

Ken Carfora: The team continues to work well together under the very capable hands of their CEO for Ken care of yes.

Wade Burton: The bank has also paid its first dividend in more than 16 years, a nine euro cents per share dividend, which resulted in 128 million dividend payment to Fairfax. Poseidon also continues to perform well under the leadership of David Sokol and Bing Chen. Poseidon owns 184 cargo ships, all with long-term contracts. And with the average life of the contracts around nine years, Poseidon also has excellent visibility for the future income.

Ken Carfora: The bank has also paid its first dividend in more than 16 years of nine euros per share dividend, which resulted in a 128 million dividend payment to Fairfax.

Speaker Change: The siding also continues to perform well under the leadership of David Sokol and Bang Chen.

Wade Burton: Poseidon also continues to perform well under the leadership of David Sokol and Beng Chen. Poseidon owns 184 cargo ships, all with long-term contracts. And with the average life of the contracts around nine years, it also has excellent visibility for the future. It's amazing, looking back.

Speaker Change: Beside in loans 184 cargo ships, all with long term contracts.

Speaker Change: And what's the average life of the contracts around nine years beside and also has excellent visibility for the future income.

Wade Burton: It's amazing looking back. In 2019, Poseidon made 80 cents a share in net income. This year, it's on track to making $1.60, a double, a fantastic performance. We own 43% of Poseidon and are very excited with its long-term prospects.

Speaker Change: It's amazing looking back in 2019, Poseidon made 80 cents a share in net income this.

Wade Burton: In 2019, Poseidon made $0.80 a share in net income. This year, it's on track to making $1.60, a double, and a fantastic increase.

Speaker Change: This year, it's on track to making a $1 60, a double a fantastic performance.

Wade Burton: We own 43% of Poseidon and are very excited about this long-term process. In July, and not reflected in our second quarter results, was the sale of our stake in Stelco. The average cost for approximately 13 million shares was $20 per share Canadian, and at June 30th, we carried it on our balance sheet at approximately $29 per share.

Speaker Change: We own 43% of Poseidon and are very excited with its long term prospects.

Wade Burton: In July, and not reflected in our second quarter results, was the sale of our stake in Stelco. Average cost for our approximately 13 million shares was 20 per share Canadian, and at June 30th, we carried it on our balance sheet of approximately 29 per share. We agreed to sell for 70 per share for proceeds of 910 million Canadian, with a very healthy pre-tax gain of $531 million or $390 million US dollars. An excellent outcome from an outstanding entrepreneur, and you can bet we hope to work on new investments with Alan Kessenbaum in the future.

Speaker Change: In July and not reflected in our second quarter results was the sale of our stake in stelco.

Speaker Change: Average cost for approximately 13 million shares was <unk> 20 per share Canadian and at June 30th we carried it on our balance sheet at approximately 29 per share.

Wade Burton: We agreed to sell for $70 per share for proceeds of $910 million Canadian with a very healthy pre-tax gain of $531 million or $390 million US dollars. An excellent outcome from an outstanding entrepreneur, and you can bet we hope to work on new investments with Alan Kesimbaum in the future. Last thing on the acquisition front, you've seen the press release about our purchase of Sleep Country Canada. We are thrilled to have Sleep Country and its talented team, led by Stuart Schaefer, join Fairfax. Sleep Country is Canada's leading sleep retailer with brands that are recognized by all Canadians.

Speaker Change: We agreed to sell for 70 per share for proceeds of $910 million Canadian with a very healthy pre tax gain of $531 million or $390 million.

An excellent outcome from an outstanding entrepreneur and you can bet, we hope to work on new investments with Alan Kestenbaum in the future.

Wade Burton: Final thing on the acquisition front: you've seen the press release of our purchase of Sleep Country Canada. We are thrilled to have Sleep Country and its talented team led by Stuart Schaeffer join the Fairfax Group. Sleep Country is Canada's leading sleep retailer with brands that are recognized by all Canadians. We look forward to working with Stuart and the entire Sleep Country team to further develop this remarkable Canadian success story over the long term.

Speaker Change: Final thing on the acquisition front, you've seen the press release of our purchase of sleep country, Canada.

Speaker Change: We are thrilled to have sleep country and its talented team led by Stewart Schaefer joined the Fairfax group.

Speaker Change: Sleep country as Canada's leading sleep retailer with brands that are recognized by all Canadians.

Wade Burton: Lastly, the high price of stock markets means opportunities are not pouring our way in terms of marketable security, and the small size of this part of our portfolio reflects that. Our team continues to screen through stock markets worldwide looking for value, which will no doubt emerge. But in the meantime, our private and strategic investments provide excellent earnings, and our fixed income portfolio continues to produce strong interest income with rates well above, And with that, I will now pass this to Jen Allen. Thank you, Wade.

Speaker Change: We look forward to working with Stuart and the entire sleep country team to further develop this remarkable Canadian success story over the long term.

Wade Burton: Lastly, the high prices of stock markets means opportunities are not pouring our way in marketable securities. The small size of this part of our portfolio reflects that. Our team continues to screen through stock markets worldwide, looking for value, which will no doubt emerge. But in the meantime, our private and strategic investments provide excellent earnings, and our fixed income portfolio continues to produce strong interest income with rates well above focus.

Speaker Change: Lastly, the high prices of stock markets means opportunities are not pouring our way in marketable securities and the small size of this part of our portfolio reflects that.

Speaker Change: Our team continues to screen through stock markets worldwide looking for value, which will no doubt emerge, but in the meantime, our private and strategic investments provide excellent earnings and our fixed income portfolio continues to produce strong interest income with rates well above 4%.

Jennifer Allen: And with that, I will now pass it to Jen Allen. Thank you, Wade. I'll begin my comments on the net benefit IFRS 17 had within our consolidated statement of earnings in the second quarter of 2024. Net earnings in the second quarter of 2024 of 915 million included a pre-tax net benefit of 230 million related to IFRS 17 accounting for our insurance and reinsurance contract. Consistent with prior periods, this pre-tax benefit is reported within two financial statement lines in our consolidated statement of earnings. First included with that insurance service result is a benefit from discounting losses and seated loss on claims net of changes in risk adjustment, other of 434 million.

Speaker Change: And with that I will now pass it to Jen Allen.

Jennifer Allen: I'll begin my comments on the net benefit IFRS 17 had within our consolidated statement of earnings in the second quarter of 2024. Net earnings in the second quarter of 2024 of $915 million included a pre-tax net benefit of $230 million related to IFRS 17 accounting for our insurance and reinsurance contracts. Consistent with prior periods, this pre-tax benefit is reported within two financial statement lines in our consolidated statement of earnings, first included with their insurance, from discounting associated with net claim payments made during the period, and that was partially offset by the benefit of the effect of increased discount rates during the period on prior year net losses on claims of $161 million.

Jen Allen: I'll begin my comments on the net benefit Iff's 17 had within our consolidated statement of earnings in the second quarter of 2024.

Jen Allen: Net earnings in the second quarter of 2024 of 915 million included a pre tax net benefit of $230 million related to Iff's 17, a county for our insurance and reinsurance contracts.

Jen Allen: With prior period its pre tax benefit is reported within key financial statement lines in our consolidated statement of earnings.

Jen Allen: First included with their assurance.

Jen Allen: This result is the benefit from discounting losses and ceded loss on claims net of changes in risk adjustment or there are $434 million and this was partially offset by a second component. That's presented in the financial statement line named net finance expense from insurance and reinsurance contracts of 205 million.

Jennifer Allen: And this was partially offset by a second component that's presented in the financial statement line named net finance expense from insurance and reinsurance contracts of 205 million. That's comprised of interest accretion or an expense of 366 million in the second quarter. We're selecting the unwind of the effects from discounting associated with net claim payments made during the period. And that was partially offset by the benefit of the effect of increased discount rates during the period on prior year net losses on claims of 161 million. As Peter noted in the second quarter of 2024, the benefit of the effect of the increase in discount rates on the prior year net loss on claim of 161 million partially offset the net losses recorded on the company bond portfolio of 191 million.

Jen Allen: That's comprised of interest accretion or an expense of $366 million in the second quarter, reflecting the unwind of the effects from discounting associated with net claim payments made during the period and that was partially offset by the benefit of the effect of increased discount rates during the period on prior year.

Jen Allen: Net losses on claims of $161 million.

Jennifer Allen: As Peter noted in the second quarter of 2024, the benefit of the effect of the increase in discount rates on the prior year net loss on claims of $161 million partially offset the net losses recorded on the company bond portfolio of $191 million. A few comments on our non-insurance company results in the quarter. Operating income of our non-insurance company reporting segment decreased modestly to $25 million in the second quarter of 2024 from $37 million in the second quarter of 2023.

Jen Allen: As Peter noted in the second quarter of 2020 for the benefit of the effect of the increase in discount rates on the prior year net loss on claims of $161 million, partially offset by net losses recorded on the company bond portfolio of $191 million.

Jennifer Allen: A few comments on our non insurance company results in the quarter: operating income of our non insurance company reporting segment decreased modestly to 25 million in the second quarter of 2024 from 37 million in the second quarter of 2023. You exclude the impact of Fairfax India's performance fee to Fairfax, which was nil in the second quarter of 24 compared to in cruel of 36 million in the second quarter of 23. The operating income of the non-insurance companies decreased to 25 million in 24 from 73 million in 2023. This reflected lower operating income at Fairfax India, primarily driven by share of loss from Fairfax India's investments and associates in 2024 compared to share profits in 2023.

Speaker Change: A few comments on our non insurance company results in the quarter.

Speaker Change: Operating income of our non insurance company reporting segment decreased modestly to $25 million in the second quarter of 2024 from $37 million in the second quarter of 2023.

Jennifer Allen: You exclude the impact of Fairfax India's performance fee to Fairfax, which was nil in the second quarter of 24, compared to an accrual of $36 million in the second quarter of 23. The operating income of the non-insurance companies decreased to $25,000,023, from $73,000,023.

Speaker Change: If you exclude the impact of Fairfax, India performance fee to Fairfax, which was nil in the second quarter of <unk> 24, compared to an accrual of $36 million in the second quarter of 'twenty three.

Speaker Change: The operating income of the non insurance companies decreased to $25 million in 'twenty four from $73 million in 2023.

Jennifer Allen: This reflected lower operating income at Fairfax, India, primarily driven by a share of loss from Fairfax's investments in associates in 2024, compared to share profits in 2023. And that principally was reflected from a loss from its San Mar chemical group investment in the second quarter of 24 of 39 million, compared to share profits in the second quarter of 23 of 20 of 13 million. This was partially offset by higher operating income in our restaurant and retail segments.

Speaker Change: This reflected lower operating income at Fairfax, India, primarily driven by share of loss from Fairfax, India as investments in associates in 2024.

Speaker Change: Care to share profits in 2023.

Jennifer Allen: And that principally was reflected from a loss from its San Mar Chemical Group investment in the second quarter of 24 of 39 million, compared to share profits in the second quarter of 23 of 13 million. This was partially offset by higher operating income in our restaurant and retail segment. Looking at our share profit from investments and associates in the second quarter of 24, are consolidated share profit of associates of 221 million principally reflected share profit of 126 million from Euro Bank, 67 million from Poseidon, and 32 million from Peak Achievement. That principally reflected its sale of rolling sporting goods, and it was partially offset by the share of loss at 39 million from San Mar Chemical Groups that I noted previously.

Speaker Change: And that principally what's reflected from a loss from its Sanmark chemical group investment in the second quarter of 'twenty four.

Speaker Change: $39 million compared to share of profits in the second quarter of 'twenty three up to like a $13 million.

Speaker Change: This was partially offset by higher operating income in our restaurant and retail segment.

Jennifer Allen: Looking at our share profit from investments in associates in the second quarter of 24, our consolidated share profit of associates of $221 million principally reflected a share of profit of $126 million from Eurobank, $67 million from Poseidon, and $32 million from Peak Achievement. That principally reflected its sale of Rawlings Sporting Goods, and it was partially offset by the share of loss of $39 million from Sandmar Chemical Groups that I noted In the six months of 2024, the share of profits was $349 million, reflected a share of profit of $205 million from Eurobank and $101 million from Poseidon that was partially offset by a share of loss of $49 million from Sandmark Chemical Group.

Speaker Change: Looking at our share of profit from investments and associates in the second quarter of 'twenty for our consolidated share profit of associates of $221 million, principally reflected share profit of $126 million from eurobank $67 million from Poseidon and $32 million from peak achievement that principally.

Speaker Change: Reflecting its sale of Rawlings sporting goods and that was partially offset by the share of loss of $39 million from Sanmark chemical groups that I noted previously.

Jennifer Allen: In the six months 2024, the share profits was 349 million, reflected share profit at 205 million from Euro bank and 101 million from Poseidon that was partially offset by the share of loss of 49 million from San Mar Chemical Groups.

Speaker Change: In the six months 2024 share profit was $349 million reflected share of profit of $205 million from Eurobank and $101 million of deciding that was partially offset by the share of loss of $49 million from Sanmark chemical groups.

Jennifer Allen: I want to highlight that the share of profit of 205 million from Eurobank in the first six months of 24 decreased from the 225 million in the first six months of 23 as a result of certain one-time restructuring costs recorded by Eurobank in its first quarter of 24 and recycling of cumulative currency translation losses to Eurobank's consolidated statement of earnings upon a disposal of a subsidiary in its fourth quarter of 23. These one-time costs and recycling of currency translation losses are recorded on a quarter lag by Fairfax; therefore, partially offset the increase in Eurobank's net income.

Jennifer Allen: I want to highlight that the share of profit of $205 million from Eurobank in the first six months of 2024 decreased from $225 million in the first six months of 2023 as a result of certain one-time restructuring costs recorded by Eurobank in its first quarter of 2024 and recycling of cumulative currency translation losses to Eurobank's consolidated statement of earnings upon the disposal of a subsidiary in its fourth quarter of 2023. These one-time costs and recycling of currency translation losses are recorded on a quarter lag by Fairfax and therefore partially offset the increase in Eurobanks net income.

Speaker Change: I wanted to highlight that the share of profit of $205 million from Euro bank in the first six months of 'twenty four decrease from the $225 million in the first six months of 'twenty three as a result of certain one time restructuring costs recorded by Euro bank and its first quarter of 'twenty four.

Speaker Change: And recycling of cumulative currency translation losses to Eurobank consolidated statement of earnings upon a disposal of a subsidiary and its fourth quarter of 'twenty three.

Speaker Change: These one time costs and recycling of currency translation losses are recorded on a quarter lag by Fairfax.

Speaker Change: Therefore, partially offset the increase in euro bank's net income.

Jennifer Allen: I'll comment on a few of the financial transactions on April 25th, 2024. We completed the mandatory tender offer for the non-controlling interest in Gulf Insurance, and it increased our equity interest from 90% at March 31st, 2024, to 97.1% per cash consideration of 127 million. Then, on May 23rd, 2024, Digit Insurance, the general insurance subsidiary of our investment in our associate Digit, completed an initial public offering, comprising of new equity issuance and an offer for sale of existing equity shares held by Digit and other shareholders. This value digit insurance at approximately $3 billion or 250 billion Indian rupees at 272 Indian rupees per common share.

Jennifer Allen: I'll comment on a few of the financial transactions. On April 25, 2024, we completed a mandatory tender offer for the non-controlling interest in Gulf Insurance, and it increased our equity interest from 90% at March 31, 2024, to 97.1% for a cash consideration of $127 million. And then, on May 23, 2024, Digit Insurance, the general insurance subsidiary of our investment in our associate Digit, completed an initial public offering, comprised of new equity issuance and an offer for sale of existing equity shares held by Digit and other shareholders.

Speaker Change: I'll comment on a few of the financial transactions.

Speaker Change: On April 25th 2024, we completed the mandatory tender offer for the Noncontrolling interest in golf insurance and increased our equity interest from 90% at March 31, 2024 to 97, 1% for cash consideration of $127 million.

Speaker Change: And then on May 23rd 2024 digit insurance, the general insurance subsidiary of our investment in our associates did yet.

Speaker Change: Completed an initial public offering.

Speaker Change: Comprised of new equity issuance and an offer for sale of existing equity shares held by digit and other shareholders.

Jennifer Allen: This value digit insurance is at approximately $3 billion or 250 billion Indian rupees at 272 Indian rupees per common share. As a result of the initial public offering and subsequent increase in the fair value of Fairfax's investment in the Digit Compulsory Convertible Preferred Shares at June 30, 2024, in aggregate, Fairfax recorded a total pre-tax benefit of $150 million. This $150 million contribution to common shareholder equity is comprised of two components. The first is a gain of $106 million that was recorded directly in our Statement of Changes in Equity, in the net change in capitalization line on our 49% equity interest in digit. That gain on the 49% equity interest in the investment and associate represents the 6.3% that was sold of the equity interest in digit insurance in the IPO offering, and Digit's Dilution Gain related to its subsidiary Digit Insurance's new equity issuance.

Speaker Change: This value digit insurance at approximately $3 billion or 250 billion Indian rupees.

Speaker Change: At 272 Indian rupees per common share.

Jennifer Allen: As a result of the initial public offering and subsequent increase in the fair value of Fairfax's investment in the digit compulsory convertible preferred shares at June 30th, 2024, in aggregate, Fairfax recorded a total pre-tax benefit of 150 million. This 150 million to common shareholder equity is comprised of two components. First is a gain of 106 million that was recorded directly in our statement of changes in equity and the net change in capitalization line on our 49% equity interest in Digit. That gain on the 49% equity interest in the investment in associate represents the 6.3% that was sold of equity interest in the Digit insurance in the IPO offering and Digit dilution gain related to its subsidiary Digit insurance new equity issuance.

Speaker Change: As a result of the initial public offering and subsequent increase in the fair value of Fairfax is investment in the digit compulsory convertible preferred shares at June 30th 2024, and aggregate Fairfax recorded a total pre tax benefit of $150 million.

Speaker Change: This $150 million to common shareholder equity is comprised of two components.

Speaker Change: First is a gain of $106 million that was recorded directly in our statement of changes in equity.

Speaker Change: And the net change in capitalization line on our 49% equity interest in digit.

Speaker Change: That gain on the 49% equity interest in the investment in associate represents the six 3% that was sold at equity interests in the digital insurance in the IPO offering.

Speaker Change: And digits dilution gain related to its subsidiary digit insurance new equity issuance.

Jennifer Allen: Both completed in the initial public offering at the 272 Indian rupees per common share. The second component of the pre-tax gain of 150 million was a net gain of 44 million recorded in net gain on investments in our consolidated statement of earnings related to our investment in the digit compulsory convertible preferred shares or CCPSs. As Digit Insurance's common shares are now traded on the BSC and NSD in India, the fair value of Fairfax's investment in the Digit CCPSs are valued using the traded share price of Digit Insurance, which closed at 338 Indian rupee per common share at June 30th, 2024, valuing 100% of Digit Insurance at 3.7 billion.

Jennifer Allen: Both completed the initial public offering at 272 Indian Rupees per common share. The second component of the pre-tax gain of $150 million was a net gain of $44 million recorded in Net Gain on Investments and our Consolidated Statement of Earnings related to our investment in the Digit Compulsory Convertible Preferred Shares, or CCPS. As Digit Insurance's common shares are now traded on the BSE and NSE in India, the fair value of Fairfax's investment in the Digit CCPSs is valued using the traded share price of Digit Insurance, which closed at 338 Indian Rupees per common share on June 30, 2024, valuing 100% of Digit Insurance at $3.7 billion.

Speaker Change: Both completed in the initial public offering at the 272 Indian rupee per common share.

Speaker Change: The second component of the pretax gain of $150 million with a net gain of 44 million recorded in net gain on investments in our consolidated statement of earnings related to our investment in the digit compulsory convertible preferred shares or CCP assets.

Speaker Change: As digit insurance is common shares are now traded on the Bse and NSE in India.

Speaker Change: Fair value of Fairfax is investment in the digit CCP assets are valued using the traded share price of digit insurance, which closed at 338 Indian rupee per common share at June 30 of 2020 for valuing 100% of digit insurance at $3 7 billion.

Jennifer Allen: Going forward, the company's investment in the Digit CCPS will be marked to market on a quarterly basis, reflecting changes in Digit insurance traded share price. While the company's investment in associate will continue to be accounted for under the equity method of accounting, with disclosure provided on the fair value of our investment in associate, which will also be now derived from Digit Insurance's traded share price.

Jennifer Allen: Going forward, the company's investment in the digit CCPS will be marked to market on a quarterly basis, reflecting changes in the digit insurance traded share price. Meanwhile, the company's investment in Associate will continue to be accounted for under the equity method of accounting, with disclosure provided on the fair value of our investment in Associate, which will also be derived from Digit Insurance's traded share price. I'll close with a few comments on our financial condition.

Speaker Change: Going forward the company's investment in the digital <unk> will be mark to market on a quarterly basis, reflecting changes in digital insurance traded share price.

Speaker Change: While the company's investment in associate will continue to be accounted for under the equity method of accounting.

Speaker Change: With disclosure provided on the fair value of our investment in associate which will also be now derived from digit insurances traded share price.

Jennifer Allen: I'll close with a few comments on our financial condition. On June 24th, 2024, we completed an offering of 600 million principal amount of 6.1% unsecured senior notes due in March 15th, 2055, or the 2055 notes, and the second reopening of our 600 million principal amount of 6% notes due in 2033 for an additional 150 million principal. For an aggregate of 750 million principal amount outstanding on the 2033 note. Subsequent to June 30th, on July 19th, 2024, Allied World became the primary co-obligor of those 2055 notes in exchange for cash received from the holding company of 597 million.

Jennifer Allen: On June 24, 2024, we completed an offering of $600 million principal amount of 6.1% unsecured senior notes due on March 15, 2055, or the 2055 notes, and the second reopening of our $600 million principal amount of 6% notes due in 2033 for an additional $150 million principal, for an aggregate of $750 million principal amount outstanding on the 2033 notes. Subsequent to June 30, on July 19, 2024, Allied World became the primary co-obligor of those 2055 notes in exchange for cash received from the holding company of $597 million.

I'll close with a few comments on our financial condition on June 24th 2024, we completed an offering of 600 million principal amount of six 1% unsecured senior notes due in March 15, 2055, or the 2055 nodes.

Speaker Change: And a second reopening of our $600 million principal amount of 6% notes due in 2033 for an additional $150 million principal.

Speaker Change: For an aggregate of 750 mailing principal amount outstanding on the 2033 notes.

Speaker Change: Subsequent to June 30th on July 19, 2020 for Allied World became the primary co obligor of those 2055 nodes.

Speaker Change: In exchange for cash received from the holding company at $597 million and on July 24, 2020 for Allied used the majority of those proceeds to redeem its outstanding 500 million principal amount of $4. Three five senior notes that were due in October 2025.

Jennifer Allen: And on July 24th, 2024, Allied use the majority of those proceeds to redeem its outstanding 500 million principal amount of 4.35 senior notes that were due in October 25th. The result of the debt issuance and redemptions in the first six months of 24 is reflected in our liquidity position of the company. At June 30th, 24, our cash and investments in the holding company was 2.5 billion, but not yet reflected was the subsequent payment on July 19th of that 597 million from the holding company to Allied World for becoming the primary co-obligor on those 2055 notes.

Jennifer Allen: And on July 24, 2024, Allied used the majority of those proceeds to redeem its outstanding $500 million principal amount of 4.35 senior notes that were due in October 2025. The result of the debt issuance and redemptions in the first six months of 2024 is reflected in our liquidity position of the company.

Speaker Change: The result of the debt issuance and redemptions in the first six months of 'twenty four is reflected in our liquidity position of the company.

Jennifer Allen: At June 30, 2024, our cash and investments in the holding company were $2.5 billion, but not yet reflected was the subsequent payment on July 19 of that $597 million from the holding company to Allied World for becoming the primary co-obligor on those 2055 notes. In the first six months of fiscal 24, we purchased for cancellation 854,000 subordinate voting shares, principally under our normal course issuer bid at a cost of $938 million, or US approximately $1,098 per share.

Speaker Change: At June 30, 24, our cash and investments in the holding company was $2 5 billion, but not yet reflected with the subsequent payment on July 19th of that $597 million from the holding company to Allied world for becoming the primary co obligor on those 2055 note.

Jennifer Allen: In the first six months of 24, we purchased for cancellation 854,000 subordinate voting shares principally under our normal course issuer bid at a cost of 938 million or US approximately a thousand 98 per share. That included 613 point 3000 shares on a cost of 678 million completed in the second quarter of 24. The holding company also has access to our fully undrawn 2 billion credit facility that was amended in July to extend the expiry from July 14th, 2028, to July 17th, 2029. We also have an additional 2 billion at fair value of investments in associates and consolidated non-insurance companies owned at the holding company and no long-term debt maturities until 2026.

Speaker Change: And the first six months of 'twenty four we purchased for cancellation 854000 subordinate voting shares.

Speaker Change: Under our normal course issuer bid at a cost of $938 million or you add approximately 1098 per share.

Jennifer Allen: That included 613.3 thousand shares at a cost of $678 million completed in the second quarter of 2004. The holding company also has access to our fully undrawn $2 billion credit facility that was amended in July to extend the expiry date from July 14, 2028 to July 17, 2029. We also have an additional $2 billion at fair value of investments in associates and consolidated non-insurance companies owned by the holding company and no long-term debt maturities until 2026.

Speaker Change: That included 613.3 thousand shares on.

Speaker Change: On a cost of $678 million completed in the second quarter of 'twenty four.

Speaker Change: The holding company also have access to our fully Undrawn 2 billion credit facility that was amended in July to extend the expiry from July 14th 2028 to July 17 2029.

Speaker Change: We also have an additional 2 billion at fair value of investments in associates and consolidated non insurance companies owned at the holding company and no long term debt maturities until 2026.

Jennifer Allen: At June 30th, 2024, the excess of fair value over the carrying value of our investments and non-insurance associates and market-traded consolidated non-insurance subsidiaries was 1.5 billion compared to 1 billion at December 31st, 23. That pre-tax excess of 1.5 billion is not reflected in our book value per share, but is regularly reviewed by management as an indicator of investment performance. and not fully reflected in that one and a half billion is the subsequent event described by Wade on the July 15, 2024, Stelco Transaction, where the company estimates a pre-tax gain on the sale of its holdings of Stelco Common Shares of approximately 390 million, or an additional 315 million in excess of fair value over carrying value to the one and a half billion we reported at June 30, 2024.

Jennifer Allen: At June 30, 2024, the excess of fair value over the carrying value of our investments in non-insurance associates and market traded consolidated non-insurance subsidiaries was $1.5 billion compared to $1 billion at December 31, 2023. That pre-tax excess of $1.5 billion is not reflected in our book value per share, but it's regularly reviewed by management as an indicator of investment performance. And not fully reflected in that one and a half billion is the subsequent event described by Wade in the July 15, 2024 Stelco transaction, where the company estimates a pre-tax gain on the sale of its holdings of Stelco common shares of approximately $390 million, or an additional $315 million in excess of fair value over carrying value to the $1.5 billion we reported on June 30, 2024.

Speaker Change: At June 32020 for the excess of fair value over the carrying value of our investments in non insurance associate and market traded consolidated non insurance subsidiaries was one 5 billion compared to 1 billion at December 31 23.

Speaker Change: That pretax excess of $1 five billions not reflected in our book value per share, but it is regularly reviewed by management as an indicator of investment performance.

Speaker Change: And not fully reflected in that one 5 billion as a subsequent event described by weighed on the July 15th 2024, Stelco transaction, where the company estimates of pre tax gain on the sale of its holdings of <unk> common shares of approximately $390 million or an additional $315 million.

Speaker Change: Excess of fair value over carrying value to the one 5 billion we reported at June 32024.

Jennifer Allen: The company's total debt to total calf ratio, excluding non-insurance companies, increased to 25.9% at June 30 of 2024, compared to 23.1% at December 31st, 23, principally reflecting the issuance of our billion dollar principal amount, 6.35 senior notes, due in 2054. Had the Allied world senior note redemption mentioned previously been completed on June 30, 2024, our total debt to total calf ratio, excluding the non-insurance companies, would have been 24.9%. An enclosing common shareholders equity increased by 115 million to over 21.7 billion at June 30, 2024, from just over 21.6 billion at December 31st, 2023. It primarily reflected net earnings attributed to shareholders, a fair fax of 1.7 billion, partially offset by purchases of 854,000 subordinate boarding shares for cancellation, for cash consideration of 938 million, or as I noted US 1098 per share, payments of common and preferred share dividends of 388 million, and other comprehensive loss of 229 million relating to unrealized foreign currency losses, net of hedges.

Speaker Change: The company's total debt to total cap ratio, excluding non insurance companies increased to 25, 9% at June 32024, compared to 23, 1% at December 31, 23%, principally reflecting the issuance of $1 billion principal amount of $6 35.

Jennifer Allen: The company's total debt to total CAF ratio, excluding non-insurance companies, increased to 25.9% at June 30, 2024, compared to 23.1% at December 31, 2023, principally reflecting the issuance of our billion-dollar principal amount, 6.35 senior notes, due in 2054. Had the Allied World Senior Note Redemption mentioned previously been completed on June 30th, 2024, our total debt to total CAF ratio, excluding non- And in closing, common shareholders' equity increased by $115 million to over $21.7 billion at June 30, 2024 from just over $21.6 billion at December 31, 2023.

Speaker Change: In your notes due in 2054.

Speaker Change: Had the Allied world's senior note redemption mentioned previously been completed on June 32024, our total debt to total cap ratio, excluding the non insurance companies would have been 24, 9%.

Speaker Change: And in closing common shareholders' equity increased by $115 million to over $21 7 billion at June 32024 from just over $21 6 billion at December 31 2023.

Jennifer Allen: It primarily reflected net earnings attributed to shareholders of Fairfax of $1.7 billion, partially offset by purchases of 854,000 subordinate voting shares for cancellation, for cash consideration of $938 million, or, as I noted, U.S. $1,098 per share; payments of common and preferred share dividends of $388 million, and other comprehensive losses of $229 million relating to unrealized foreign currency losses, net of hedges. That concludes my remarks for the second quarter of 2024. And I'll now turn the call back over to Peter.

Speaker Change: It primarily reflected net earnings attributed to shareholders of Fairfax of $1 7 billion par.

Speaker Change: Partially offset by purchases of 854000 and subordinate voting shares for cancellation for cash consideration of $938 million or are they noted U S 1098 per share payments.

Speaker Change: Payment of common and preferred share dividends of $388 million and other comprehensive loss of 229 million relating to unrealized foreign currency losses net of hedges.

Peter Clarke: That concludes my remarks for the second quarter of 2024, and I'll now turn the call back over to Peter. Thank you, Jen. We now look forward to answering your questions.

Speaker Change: That concludes my remarks for the second quarter of 2024, and I will now turn the call back over to Peter.

Peter Clark: Thank you Jim.

Peter Clarke: We look forward to answering your questions. Please give us your name and company name and try to limit your questions to only one so that it's fair to all on the call. Amanda, we are now ready for questions.

Peter Clark: We now look forward to answering your questions.

Operator: Please give us your name and company name, and try to limit your questions to only one so that it's fair to all on the call. Amanda, we are now ready for questions. Thank you. As a reminder, if you would like to ask a question, please press star one, and please limit your question to one.

Peter Clark: Please give us your name and company name and try to limit your questions to only one so that is fair is fair to all on the call.

Peter Clark: Amanda we are now ready for questions.

Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one and please limit your question to one our first question comes from Nick <unk> with CIBC capital markets. Your line is open.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one and please limit your question to one. Our first question comes from Nik Priebe with CIBC Capital Markets. Your line is open.

Nick Prevy: Our first question comes from Nick Prevy with CIBC Capital Markets. Your line is open. Okay, thanks.

Nikolaus Priebe: Okay, thanks. I just wanted to ask about exposure to a few higher-profile events that happened subsequent to quarter end. It looks like estimates for insured losses from Hurricane Beryl and the CrowdStrike-induced IT outage look pretty benign, but I was wondering if you could just give us your perspective on what the anticipated impact of those two events might look like from Fairfax's standpoint.

Amanda: Okay. Thanks.

Nick Prevy: I just wanted to ask about exposure to a few higher profile events that happen subsequent to quarter-end. It looks like estimates for insured losses from Hurricane Barrel, and the CrowdStrike-induced IT outings look pretty benign, but I was wondering if you could just give us your perspective on what the anticipated impact of those two events might look like from Fairfax's standpoint.

Nick: Wanted to ask about exposure to a few higher profile events that happened subsequent to quarter end.

Speaker Change: It looks like estimates for insured losses from hurricane barrel and the crowd strike induced I T outage look pretty benign, but I was wondering if you could just give us your perspective on what the anticipated impact of those two events might look like from Fairfax a standpoint.

Peter Clarke: Sure, Nick. You're right. Very little impact we expect from those two events.

Nick: Sure Nick.

Youre right that very little impact, we expect from those two events.

Peter Clarke: Turnip. You're right. Very little impact we expect from those two events. Barrel, especially, we don't see. It's more of an attritional cat loss for us, we expect in the third quarter.

Peter Clarke: Barrel, especially, we don't see, you know, it's more of a traditional cat-loss for us, we expect in the third quarter, and in regards to CrowdStrike, you know, the event occurred over two weeks ago, and so we're closely monitoring our exposure and supporting our clients, and they will mostly impact business interruption and contingent business interruption, but what mitigating the loss is the quick corrective patch by CrowdStrike, and the waiting periods that we had within the policies are most have within their policies, which are, you know, 8 to 12 hours. So we'd received a number of notifications today, but mostly precautionary in nature, and we don't believe it'll be a material event either.

Barrow, especially we don't see.

Nick: It's a more of an Attritional cat cat loss for US we expect in the third quarter and in regards to crowd strike.

Peter Clarke: And in regards to CrowdStrike, you know, the event occurred over two years or two weeks ago. And so we're closely monitoring our exposure and, you know, supporting our clients. And it will mostly impact business interruption and contingent business interruption. But mitigating the loss is the quick corrective patch by CrowdStrike and the waiting periods that we had within the policies or most have within their policies, which are, you know, eight to 12 hours. So we've received a number of notifications today, but mostly precautionary in nature, and we don't believe it'll be a material event either.

Speaker Change: You know the event occurred over two years two weeks ago, and so we are closely monitoring our exposure and supporting our clients.

Speaker Change: And it will mostly impact business interruption and contingent business interruption, but what mitigating the losses. The quick corrective patch by crowd strike and the waiting periods that we had within the policies are most have within their policies, which are eight to 12 hours.

Operator: I understand. Okay, that's great. Thank you.

Nick: So we've received a number of notifications to date, but.

Mostly precautionary in nature, and we don't believe it'll be a material event either.

Nick Prevy: Understood. Okay, that's great. Thank you.

Speaker Change: Understood. Okay. That's great. Thank you.

Operator: Thank you. Our next question comes from the next question. Thank you. The next question comes from Tom MacKinnon with BMO Capital. Your line is open.

Thank you. Our next question comes from next question Nick.

Tom Mackinnon: Our next question comes from Tom MacKinnon. Thank you. Our next question comes from Tom MacKinnon with BMO Capital. Your line is open.

Thank you. Our next question comes from Tom Mackinnon with BMO capital. Your line is open.

Tom Mackinnon: Hi Tom. Well, thanks very much. Yeah, good morning.

Nick: Hi, Tom Thanks, very much yeah. Good morning.

Tom Mackinnon: Even if you pro forma the cash, it's over $2 billion. An uptick in financial strength ratings as well. But what I've noticed here is the uptick in your share buybacks of over 613,000 shares in the quarter. That's nearly triple what you purchased in the first quarter and almost six times what you purchased in the fourth quarter of last year. Can you comment on your appetite for increased share buybacks and what that indicates in terms of where the shares are valued as well?

Tom Mackinnon: If you kind of look the financial condition, very strong hero, you know, even if you pro form of the cash, it's over $2 billion. Up thick and financial strength ratings as well. And but what I've noticed here is the up thick and your share buybacks over 613,000 shares in the quarter. That's nearly triple what you purchase in the first quarter, and certain, and you know almost six times which you purchased on a quarter on the fourth quarter of last year.

Tom Mackinnon: If you kind of look at the financial condition very strong hero you know, even if you pro forma the cash it's over $2 billion, a uptick in financial strength ratings, as well and but what I've noticed here is the uptick in your share buybacks over 613000 shares in the quarter.

Speaker Change: That's a nearly triple what you purchased in the first quarter and.

Speaker Change: And and almost six times, which you purchased.

Nick: On a quarter on the fourth quarter of last year. So.

Peter Clarke: So can you comment on your appetite for increased share buybacks and what that indicates in terms of your what you think in terms of where the shares are valued as well.

Speaker Change: Can you comment on.

Speaker Change: Your appetite for increased share buybacks and.

Speaker Change: And what that indicates in terms of your would.

Speaker Change: Would you think in terms of where the shares are valued as well.

Peter Clarke: Sure, Tom.

Peter Clarke: Sure, Tom. And as we said in the past, you know, in regards to capital allocation, our first priority is the financial strength of Fairfax. And, you know, how we define that is cash and marketable securities of over a billion in the holding company. Unknown Speaker No Longer Term Debt Maturities, which we have refinanced now, pretty much for the next three years.

Tom: Sure Tom.

Peter Clarke: And as we said in the past, you know, in regards to capital allocation, our first priority is the financial strength of Fairfax and, you know, how we define that is cash and marketable securities of over a billion in the holding company, known your term debt maturities, which we have refinanced now pretty much for the next three years. And our on use that we have $2 billion on used line of credit. So, you know, strong financial strength, and that's how we measure it. That's our first priority.

Speaker Change: And as we said in the past you know in regards to capital allocation. Our first priority is financial strength.

Speaker Change: Fairfax and you know, how we define that as cash and marketable securities of over 1 billion in the holding company.

Speaker Change: No near term debt maturities, which we have refinance now pretty much for the next three years.

Speaker Change: And.

Peter Clarke: And our unused, we have $2 billion unused line of credit. So, you know, strong financial strength, and that's how we measure it. That's our first priority.

Speaker Change: And our own use that we have 2 billion unused line of credit so.

Speaker Change: Strong financial strength and that's that's how we measure it that's our first priority.

Peter Clarke: Then we want to support our insurance companies. And we've done that over the last three or four years; our companies grew almost 16% per year over the last since 2019. And we supported that growth through capital generation of the insurance companies. Now, with that premium leveling off last year and this year, producing, you know, excess capital and strong dividends to Fairfax, and we've been using that to buy our shares. We think they're at great prices, and we'll continue to do that going forward.

Speaker Change: Then we want to support our insurance companies.

Peter Clarke: Then we want to support our insurance companies. And we've done that over the last three or four years; our companies grew almost 16% per year over the last five years since 2019. And we supported that growth through capital generation by the insurance company. Now, with that premium leveling off last year and this year, it's producing, you know, excess capital and strong dividends to Fairfax. And we've been using that to buy our shares. We think they're at great prices, and we'll continue to do so.

Speaker Change: And we've done that over the last three or four years or companies grew almost 16% per year over the last since 2019.

Speaker Change: And we supported that growth through capital generation of the insurance companies.

Speaker Change: Now with that premium leveling off last year and this year, it's producing our excess capital and strong dividends to Fairfax and we've been using that to buy our shares we think they're at great prices and we'll continue to do that going forward.

Tom Mackinnon: Okay. Thank you.

Operator: Okay, thanks very much.

Lander: Okay Lander.

Operator: Thank you. Our next question comes from Jaeme Gloyn with National Bank Financial. Your line is open.

Speaker Change: Thank you. Our next question comes from James going with National Bank Financial Your line is open.

James Gloyn: Our next question comes from James, going with National Bank Financial. Your line is open. Yeah. Thanks. I'm going to touch on a theme in the industry today regarding that casualty, reserved things, you know, looks like favorable reserve development across the business lines on a higher level basis.

James: Yeah, Thanks, Jamie will touch on.

Jaeme Gloyn: Yeah, thanks. I just want to touch on a theme in the industry today regarding casualty reserving. It looks like favorable reserve development across the business lines on a, you know, higher level basis. But can you give us some more granularity? In terms of, you know, some of the businesses and, specifically, around casualty reserving, what you're seeing there, are you seeing any of the same impacts that the other industry, some industry players are seeing? That would be helpful.

James: Theme in the in the industry today regarding casualty reserve things.

Speaker Change: It looks like favorable reserve development across the business lines on.

James: Higher level basis, but can you give us some more granularity.

James Gloyn: But can you give us some more granularity in terms of, you know, some of the businesses and specifically around casualty, reserved what you're seeing there. You see in any of the same impacts that the other industry that some industry players are seeing. That would be helpful. Thanks.

Speaker Change: In terms of.

Speaker Change: Some of the businesses and specifically around casualty reserve and what you're seeing there are you seeing any of the same impacts that the other industry. Some industry players are seeing.

Speaker Change: That would be helpful. Thanks.

Peter Clarke: Sure. Thanks, Amy. Our reserves continue to remain strong. For the first six months, we had favorable development of around 162 million. As you said, some of our companies have experienced the casualty development; the industry is seeing, especially on those 2014 to 2019 accident years.

Peter Clarke: Sure. Thanks, Jaeme.

Jamie: Sure. Thanks, Jamie.

Speaker Change: Our reserves continue to remain strong for.

Speaker Change: For the first six months, we had favorable development of around $162 million.

Peter Clarke: Our reserves continue to remain strong. For the first six months, we had favorable development of around $162 million. As you said, some of our companies have experienced the casualty development the industry is seeing, especially in those 2014 to 2019 accident years, but it has really been made up more than offset by favorable development and other lines, and, in general, IB&R. Our companies have done a wonderful job, you know, managing this cycle, writing much less business during that period.

Speaker Change: As you said some of our companies have experienced the casualty development the industry is seeing.

Speaker Change: Especially on those 2014 to 2019 accident years.

Peter Clarke: But it has really been made up more than offset by favorable development and other lines, and in general, IBM are our companies have been a wonderful job, you know, managing the cycle, writing much less business during that period and then expanding in the hard market years, you know, 2000 and on. Awards. So of our $34 billion net reserves, about 80% are in these hard market years. And on those years, the companies have not reduced the initial loss picks on, generally, they haven't reduced them on the long tail lines. And we received significant price increases during those years, too.

Speaker Change: But it has really been made up but more than offset by favorable development in other lines and in general I'd be in our our companies have done a wonderful job.

Speaker Change: Managing this cycle, writing much less business during that period, and then expanding in the hard market years 2000 and onwards.

Peter Clarke: And then expanding in the hard market years, you know, 2000 and on. So of our $34 billion net reserves, about 80% are in these hard market years. And during those years, the companies have not done, have not reduced the initial loss picks on, generally haven't reduced them on the long tail line, and we received significant price increases during those years too. So overall, we've seen some development on the casualty line. It's been offset by redundancies elsewhere, and we just think our reserves are in a very strong position today. Next question, Amanda.

Speaker Change: So all of our $34 billion net reserves about 80% are in these hard market years.

Speaker Change: And and on those years the companies have not done have not reduced the initial loss picks on generally haven't reduced them under the long tail lines.

Speaker Change: And we received significant price increases during those years too. So overall, we've seen some development on the casualty lines.

Peter Clarke: So overall, we've seen some development on the casualty lines. It's been offset by redundancy elsewhere. And we just think our reserves are in a very strong position today.

Speaker Change: It's been offset by redundancies elsewhere, and we just think our reserves are in a very strong position today.

Operator: Next question, Amanda. Thank you.

Speaker Change: Next question Amanda.

Operator: Thank you. As a reminder, please press star 1 if you would like to ask a question. Our next question comes from Scott Heleniak with RBC Capital Markets. Your line is open.

Amanda: Thank you.

Operator: If you would, as a reminder, please press star one.

Speaker Change: As a reminder, please press star one if you would like to ask a question. Our next question comes from Scott <unk> with RBC capital markets. Your line is open.

Scott Heleniak: If you would like to ask a question, our next question comes from Scott Heleniak with RBC Capital Markets.

Scott Heleniak: Your line is open. Yeah. Good morning. Just a quick question on the golf acquisition. You had disclosed the combined ratios for the first six months there. And just wondering if you can talk about what you think those can get back to, are you referencing getting back to historical levels or normalized levels? What is that kind of range that you are kind of referencing related to golf?

Scott: Yeah. Good morning, just a quick question on the the golf acquisition you disclosed the combined ratios.

Operator: Yeah, good morning. Just a quick question on the golf acquisition. You had disclosed the combined ratios, you know, for the first six months there. And just wondering if you can talk about what you think those can get back to, you are referencing, getting back to historical levels or normalized levels? What is that kind of range that you that you are kind of referencing related to golf?

Scott: For the first six months, there and I'm just wondering if you can talk about what you think those can get back to are you referencing are getting back to historical levels of normalized levels.

Speaker Change: What is the kind of range that you that you are kind of referencing related to golf.

Peter Clarke: Sure.

Scott: Sure.

Peter Clarke: Sure. So, you know, we've been invested in golf for the better part of 12 years. And if you look over that time period, they consistently produce combined ratios below 95, I think on average about 94. So, you know, we would expect it would run at that rate going forward and in the future. Next question, Amanda.

Peter Clarke: So we've been invested in golf for the better part of 12 years. And if you look over that time period, they produce consistently combined ratios below 95. I think on average about 94. So we would expect it would run at that rate going forward and in the future.

Speaker Change: So we've been invested in golf for the better part of 12 years, and if you look over that time period.

Speaker Change: Produce consistently combined ratios below 95, I think on average about 94, so that we would we would expect it would run at that rate.

Scott: Going forward in the future.

Operator: Next question, Amanda.

Amanda: Next question Amanda.

Operator: Thank you. As a reminder, please press star one.

Operator: Thank you. As a reminder, please press star one. Our next question comes from Jaeme Gloyn with National Bank. Your line is open.

Speaker Change: Thank you as a reminder, please press star one our next question comes from James James Coyne with National Bank. Your line is open.

James Gloyn: Our next question comes from James. James, going with National Bank, your line is open. Yes. Thanks. Just wanted to have a question on the growth outlook as well. So organic growth that they came in just below 1% in the quarter. Some of that was impacted by the Odyssey crop insurance. But maybe talking through what you're seeing in the market, other commercial insurers are seeing mid-single to maybe even double-digit growth.

Jaeme Gloyn: Yeah, thanks. I just wanted to have a question on the growth outlook, as well. So organic growth, I think came in just below 1% in the quarter; some of that was impacted by the Odyssey, crop insurance, but You know, maybe talk us through what you're seeing in the market. Other commercial insurers are seeing mid single to maybe even double digit growth. So what is it that you're seeing that's causing you to maybe take a little bit of a step back and look at the growth profile of the underlying?

James Coyne: Yes, Thanks, just wanted to.

James Coyne: I have a question on the on the growth outlook as well so organic growth in that came in just below 1%.

Scott: Some of that was impacted by the Odyssey.

Speaker Change: Crop insurance, but.

Speaker Change: Maybe talk us through what you're seeing in the market other.

Speaker Change: Commercial insurers are seeing mid single to maybe even double digit growth.

Peter Clarke: So what is it that you're seeing that's causing you to maybe take a little bit of a step back in the growth profile of the underlying businesses? Very, Jamie. Yeah, so growth has slowed down in the first six months of 2024. I think on a growth basis, we're up about 1% on a net basis, 3%. That, of course, excludes the golf acquisition. And it differs across the group, by line of business, by geography. Odyssey is down 9.5%. But, as I said, it's really affected by two things. It's pulled back and diversified some of its crop business.

Speaker Change: So what is it that you're seeing that's causing you to maybe.

Speaker Change: Taking a little bit of a step back and are in the in the growth profile of the underlying businesses.

Peter Clarke: Fair, Jaeme. Yeah, so growth has slowed down in the first six months of 2024. I think on a gross basis, we're up about 1%. On a net basis, 3%, which, of course, excludes the Gulf acquisition. And it differs across the group, you know, by line of business, by, by geography.

Jamie: Sure Jamie.

Jamie: Yeah. Its group so growth has slowed down in in the first six months of 2020 for I think on a gross basis were up about 1% on a net basis.

Speaker Change: 3%.

Speaker Change: Of course excludes the golf acquisition.

Speaker Change: And it differs across the group you know by line of business by by geography.

Peter Clarke: Odyssey is, you know, down nine and a half percent. But, as I said, it's really affected by two things. It's You know, it's pulled back and diversified some of its crop business. And then the non-renewal of this quarter's share that we've been talking about, that ends in the fourth quarter. So that will normalize in the fourth quarter, and we'll see that effect, which is about $128 million, I think, in the second quarter.

Speaker Change: Odyssey is down nine 5%, but as I said, it's really affected by two things it's.

Speaker Change: It's pulled back and diversified some of its crop business.

Peter Clarke: And then the non-renewal of this quarter share that we've been talking about, that ends in the fourth quarter. So that will normalize in the fourth quarter. And we'll see that effect, which is about 128 million, I think, in the second quarter. Allied is still growing. It's up 8%. Crumb Forster is growing. North they've been optimizing their portfolio and pulling back, and I think we'll continue to see, you know, in the last six months we'll see them grow as well. So, overall, things are positive. We're still getting rate in access of loss costs based off from, you know, strong margins in the business.

James Coyne: And then the non renewal of this quota share that we've been talking about that ends in the fourth quarter. So that will normalize in the fourth quarter and we will see that effect, which is about $128 million I think in the second quarter.

Peter Clarke: Allied is still growing, it's up 8%, Krumforster is growing, Northbridge is growing, BRIT, as we've talked about in the past, they've been optimizing their portfolio and pulling back. And I think we'll continue to see, you know, in the last six months, we'll see them grow as well. So overall, things are positive; we're still getting rates in excess of loss costs based on, you know, strong margins in the business. So I would expect growth to pick up in the second half of the year.

James Coyne: Allied is still growing.

James Coyne: It's up 8% Crum <unk> Forster is growing north bridge is growing.

Speaker Change: Brett as we've talked about in the past.

James Coyne: Dave.

Speaker Change: <unk> been optimizing their portfolio and pulling back and I think we'll continue to see you know in the last six months, we will see them grow as well. So overall things are positive we're still getting rate.

Speaker Change: And excess of loss cost based off from strong margins in the business. So I would expect growth may pick up in the second half of the year, but.

James Gloyn: So I would expect growth may pick up in the second half of the year, but, you know, our companies have really taken advantage, as I said before, of the hard market, you know, growing significantly in 2021-22. So it's hard to tell; it'll depend on the market, but I think we'll still see growth going forward. Got it. Oh, sorry, Jaeme, go ahead.

Peter Clarke: But, you know, our companies have really taken advantage, as I said before, of the hard market, growing significantly in 2020, 21, 22. So, it's hard to tell. It'll depend on the market, but I think we'll still see growth going forward.

Speaker Change: Companies have really taken advantage as I said before of the hard market.

Speaker Change: Growing significantly in 'twenty 2021 'twenty two.

Speaker Change: So.

Speaker Change: It's hard to tell the it'll depend on the market, but I think we'll still see growth going forward.

Amanda: Got it next question Amanda.

Operator: Got it. Next question Amanda. Oh, sorry, Jaeme. Go ahead.

Speaker Change: Yeah.

Speaker Change: Oh, sorry, Jamie go ahead.

Peter Clarke: Kind of assumed I might be the only one right now, but just, you know, going back to Tom's buyback question, and you mentioned access capital and dividends. Did you, was there any dividends funneled back up to Fairfax and Q2, and then, you know, with the slower growth rate, I guess, you know, what's the cadence or, or how should we think about that? Access capital flowing back with it in terms of like the timing of that. Yeah, you know, we play it by ear. We make sure that each of our insurance operations are well capitalized first, both regulatory capital, rating agency capital, and then we look to take dividends up.

Jamie: Kind of assume that might be the only one right now but.

Jaeme Gloyn: I kind of assumed I might be the only one right now, but just going back to Tom's buyback question and you mentioned excess capital and dividends, were there any dividends funneled back to Fairfax in Q2? And then, with the slower growth rate, I guess, what's the cadence or how should we think about that excess capital flowing back in terms of the timing of that?

Jamie: Just going back to Tom's buyback question and you mentioned excess capital dividends did you was there any dividends.

Arnold: Arnold backup to Fairfax in Q2, and then with the slower growth rate I guess, what's the cadence or how should we think about that excess capital flowing back with in terms of like the timing of.

Speaker Change: Of that.

Speaker Change: Yeah, you know we play it by ear, we make sure that each of our insurance operations are well capitalized first.

Peter Clarke: Yeah, you know, we play it by ear; we make sure that each of our insurance operations is well capitalized first, both regulatory capital and rating agency capital, and then we look to take dividends up. We'll be taking dividends, you know, on a quarterly basis. At year end, we take a very close look at all the capital levels as well. But maybe I'll, Jen, make any comments on the dividends in the quarter?

Speaker Change: Both regulatory capital rating agency capital and then we'd look to take dividends up will.

Jennifer Allen: We'll be taking dividends, you know, on a quarterly basis. At year end, we take a very close look at all the capital levels as well. But maybe I'll gen any comments on the dividends in the quarter. Yeah, so Jamie, we did receive additional dividends in the quarter on a YPD basis. We do provide disclosure in our MDNA on the liquidity section. So I'll refer you to that for the additional dividends that were received.

Speaker Change: We will be taking dividends.

James Coyne: On a quarterly basis.

James Coyne: At year end, we take a very close look at all the capital levels as well.

James Coyne: But maybe I'll have jen any comments on the dividends in the quarter.

Jennifer Allen: Yes, Jaeme, we did receive additional dividends in the quarter on a YTD basis. We do provide disclosure in our MD&A under the liquidity section, so I'll refer you to that for the additional dividends that we're receiving.

Jen Allen: Yeah, So Jamie we did receive additional dividends in the quarter on a YTD basis, we do provide disclosure in our MD&A under the liquidity section. So I'll refer you to that for the additional dividends that were received.

Operator: Next question, Amanda.

Amanda: Next question Amanda.

Operator: Next question, Amanda.

Scott Heleniak: Thank you.

Operator: Thank you. Our next question comes from Scott Heleniak with RBC Capital Markets. Your line is open.

Speaker Change: Thank you. Our next question comes from Scott <unk> with RBC capital markets. Your line is open.

Scott Heleniak: Our next question comes from Scott Helen; I think with our VC capital markets, your line is open. Yeah, thanks. Just one quick follow up.

Scott: Yes. Thanks, just one quick follow up just wondering if you could talk to.

Scott Heleniak: Yeah, thanks. Just one quick follow-up. I was wondering if you could share a little more on the Sleep Country acquisition, the opportunity you see there by buying the company outright, and how you were kind of balancing that versus maybe doing insurance M&A or some other type of transaction.

Scott Heleniak: Just wondering if you could talk to share a little more on the Sleep Country acquisition, the opportunity. You see, there by buying the company outright. And how are you? We're kind of balancing that versus maybe doing insurance M&A or some other type of transaction.

Scott: They're a little more on the sleep country acquisition and the opportunity you see there by buying the company outright and how are you.

Speaker Change: We're kind of balancing that versus maybe doing insurance M&A or some other type of transaction.

Speaker Change: Okay.

Peter Clarke: Okay, thanks, Scott. Yeah, in July, we announced that we entered into an arrangement agreement to buy Sleep Country for $35 per share. We think Sleep Country will be a great investment over the long term and are very happy that they're talented team by led by Stuart Schaefer will join the Fairfax group. As the transaction is not closed yet, there's not a lot more we can say on that. So, you know, hopefully it'll close in the third or fourth quarter.

Peter Clarke: Hey, thanks, Scott. Um, yeah, in July, we announced that we entered into an arrangement agreement to buy Sleep Country for $35 per share. We think Sleep Country will be a great investment over the long term and are very happy that their talented team, led by Stuart Schaefer, will join the Fairfax group. As the transaction is not closed yet, there's not a lot more we can say on that, so hopefully, it will close in the third or fourth quarter.

Speaker Change: Yeah. Thanks, Scott.

Speaker Change: Yeah in in.

Speaker Change: In July we announced that we entered into an arrangement agreement to buy sleep country for $35 per share.

Speaker Change: We think sleep country will be a great investment over the long term.

Speaker Change: And are very happy that they're talented team by led by Stewart Schaefer.

Speaker Change: Join the Fairfax group.

Speaker Change: As the transaction has not closed yet there's not a lot more we can say on that so.

Speaker Change: Hopefully it'll close in the third or fourth quarter.

Operator: Next question, Amanda. Thank you.

Speaker Change: Next question Amanda.

Operator: Thank you. At this time, we have no further questions. Mr. Clarke, I'll hand the call back to you.

Speaker Change: Thank you at this time, we have no further questions. Mr. Clarke I'll hand, the call back to you.

Operator: At this time, we have no further questions.

Peter Clarke: Mr. Clark, I'll hand them a call back to you. Thank you.

Mr. Clarke: Thank you well if there are no further questions. Thank you for joining us on this call and thank you Amanda.

Peter Clarke: Well, if there are no further questions, thank you for joining us on this call. And thank you, Amanda.

Operator: Well, if there are no further questions, thank you for joining us on this call. And thank you, Amanda. Thank you.

Mr. Clarke: Yeah.

Operator: Thank you. That concludes today's conference. Thank you for participating. You may disconnect at this time.

Speaker Change: Thank you that concludes today's conference. Thank you for participating you may disconnect at this time.

Operator: That concludes today's conference. Thank you for participating.

Operator: You may disconnect at this time.