Fairfax Financial (TSX:FFH, Financial), the insurance and investment conglomerate, declined despite solid underwriting results. The market focuses at times on Fairfax’s emerging market exposure, which has been achieved very profitably and is a competitive advantage going forward, but has been viewed this year as a negative when countries like India struggle. In developed markets where Fairfax has more of its value, property and casualty and reinsurance markets have been turning around with better pricing after years of overcapitalization in the market. Fairfax remained disciplined and avoided growing its policies unprofitably throughout the soft pricing market, and the company is now intelligently increasing business across its subsidiaries, while maintaining a strong combined ratio. The Fairfax balance sheet safely holds lowduration debt and plenty of cash, allowing the company to be a liquidity provider when superior equity investment opportunities arise.
From Longleaf Partners' third-quarter 2019 shareholder commentary.
