Fairfax Financial Holdings Limited

Good morning and welcome to Fairfax's 2025 Third Quarter Results Conference Call. Your lines have been placed in a listen-only mode. After the presentation, we will conduct a question and answer session. At that time to ask a question, please press star 1 on your phone keypad. For time's sake, we ask that you limit your questions to 1. 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 Clark with opening remarks from Derek Bulis. Derek, please begin.

Good morning and welcome to our call to discuss Fairfax's 2025 third 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 Clark.

Thank you, Derek. Good morning and welcome to Fairfax's 2025 third 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 Amy Shirk, our Chief Financial Officer, to provide some additional financial details. We had an excellent third quarter with net earnings of $1.2 billion, up from $1 billion in the third quarter of 2024. This gives us net earnings of $3.5 billion for the first nine months of 2025. Operating income from our insurance and reinsurance companies adjusted to an undiscounted basis and before risk margin was $1.3 billion in the third quarter, up from $1.1 billion in the third quarter of 2024. Our interest and dividend income was $655 million Underwriting income was very strong in the quarter at $540 million, while our share of profits and associates was $305 million. We had strong operating income from our non-insurance consolidated companies at $211 million, and net gains on investments in the quarter were again very healthy at $426 million. All in, our book value per share increased to $1,204 up 15.1% for the first nine months of the year, adjusted for our $15 dividend. Now some additional comments on our insurance operations. Underwriting results in the quarter, as I said before, were very strong, with a combined ratio of 92%, producing an underwriting profit of $540 million. We've only had two quarters with a higher underwriting profit, and those were the fourth quarters in both the last two years, both of which we benefited from reserve releases following the full reviews conducted in the fourth quarter. All our insurance segments continued to produce underwriting profit. We benefited from a lower level of catastrophe losses in the quarter, with the third quarter historically being a more volatile quarter from catastrophes. our global insurers and reinsurers had a combined ratio of 91.3, an underwriting profit of $326 million in the quarter. Allied World had an excellent quarter with a combined ratio of 88.9%. Odyssey Group, 91.2%. BRIT's combined ratio was 92.1%. And Key had an elevated combined ratio in the quarter of 105.4%, primarily due to costs from the separation from Brit. As we previously mentioned, in 2025, Key began operating as its own separate company. Excluding separation costs, Key's combined ratio year-to-date is 95%. After a difficult first quarter due to the significant catastrophe losses from the California wildfires, our global insurers and reinsurers have produced underwriting profit of $606 million year-to-date. Our North American insurers had a combined ratio of 93% for the third quarter, led by Northbridge with a very strong combined ratio of 86.9%. Crum Forster had underwriting income of $60 million, or a combined ratio of 94.8%. While Zenith, our workers' compensation specialist, after a number of quarters with a combined ratio above 100, came in at 99.7%. Zenith has been dealing with multiple years of rate decreases in the workers' compensation space, but we're happy to say rates have now begun to stabilize and Zenith are pleased to see some premium increases coming its way. Our international operations delivered a very good quarter with a combined ratio of 92.4%. Bright, who has been taking underwriting actions the last number of years, are seeing it come through in their results. They had a combined ratio of 93.8%. Latin America posted a combined ratio of 94%. Central and Eastern Europe was at 94.5 percent, and Fairfax Asia posted a 94.5 percent combined ratio as well. EuroLife General Insurance had a great quarter at 91.2 percent, benefiting from favorable reserve development. And Gulf Insurance, the largest company in our international operations, had an excellent combined ratio of 90.5 percent, also benefiting from favorable reserve development. Gulf's combined ratio has been trending positively after being elevated in 2024, normalizing to its historical combined ratio level. The strong results of our insurance operations have not gone unnoticed by the rating agencies. In the second quarter, Standard & Poor's upgraded the financial strength rating of our core operating companies to double A-minus. AMBEST also upgraded Allied World, Crum & Forrester, and Northbridge's financial strength ratings to A-plus. Odyssey was already at the A-plus level. In the third quarter, we wrote $8.2 billion of gross premium, down slightly from the third quarter of 2024 If you exclude golf insurance, our premiums were up 3.1%. Our global insurer and reinsurer segment was up 3.2%, with gross premiums of $4.2 billion in the third quarter, reflecting growth across all our companies in this segment. BRIT's gross premium was $720 million in the quarter, up 4% year-over-year, with growth in its programs and facilities business as well on the reinsurance side through its Bermuda reinsurer, Britt Reid. In the third quarter, 2025, he wrote $226 million of premium, up 15% from the third quarter of 2024, principally in property, treaty, marine, and energy lines of business. Odyssey Group's premiums were up 3% in the quarter, with gross premium written of $1.6 billion. Its insurance business was the driver of the growth at both New Line and Hudson, while its reinsurance business was relatively flat. Allied World's premium increased 1.7% in the quarter, with gross premiums of $1.7 billion. Insurance was up 1.6%, driven by their global markets division, and their reinsurance segment was up 2.3%. Our North American insurance segment wrote gross premiums of $2.4 billion in the third quarter, approximately flat over the third quarter of 2024. Xena's premium was up 10%, reflecting new workers' comp business and price increases in its agribusiness book. Crumlin Forster premium was 1.4%, driven by its accident and health business and surplus and specialty segment, offset by credit insurance. And Northbridge's gross premium was down 4% in Canadian dollar terms compared to the third quarter of 2024. The decrease at Northbridge reflects moderating rates for commercial lines in Canada. The international insurance and reinsurance operations gross premiums were $1.5 billion, down 11.6 in the third quarter of 2025 versus the third quarter of 2024. Excluding golf insurance, the international premium was up 10%. Bright in South Africa had strong growth across its distribution channels, with premium of 128 million in the quarter, up 20%. Our Central and Eastern European business, led by Colonnade, continues to grow profitably, writing $200 million of premium in the quarter, up 11.7%. Fairfax Asia was up 13% with strong growth across all its companies. And in Latin America, premium was up 6.1%. As I mentioned earlier, offsetting the growth in our international segment was Gulf Insurance, whose net premium was down 13%. principally due to timing. This will normalize in the fourth quarter. Our international operations now make up 20% of our total gross premiums, and the long-term prospects of our international operations are excellent and will be a significant source of growth over time, driven by excellent management teams that are more and more collaborating among themselves and leveraging the strengths of the group within our decentralized structure. In the third quarter, our insurance and reinsurance companies recorded favorable reserve development of $111 million or a benefit of 1.6 combined ratio points on our combined ratio. Each of our major segments recorded favorable reserve development with releases coming primarily on short tail lines of business. Our companies performed full actuarial reserve reviews in the fourth quarter and are in that process now. In the fourth quarter of 2024, we benefited from reserve releases of $301 million. Our overall reserve position remains strong. Through our decentralized operations, our insurance and reinsurance companies continue to produce outstanding results, writing over $33 billion in annualized gross premium with healthy underlying margins. While the general trends in the market are softening, we do not believe we are yet in a soft market. The wide variety of markets and segments our companies participate in allow us to grow in more attractive areas while curtailing our activity in less attractive ones. We also benefit greatly from our team of long-standing presidents running our companies. Our experienced teams have managed effectively through the insurance cycles in the past, both hard and soft. As the market turns, we will maintain underwriting discipline through quality risk selection and price adequacy with a laser focus on the bottom line. The company's robust capital position, strong reserve base, margins in our existing business, and the scale and diversification of our operations will allow us to be patient for opportunities to arise. I will now give you some additional detail on our investment earnings for the quarter. Our consolidated investment return was solid in the third quarter with the quarterly return of 1.9 percent. Consolidated interest and dividend income of $655 million was up 7.5 percent year over year. benefiting from a growing investment portfolio and increased dividend income in the quarter. Profits of associates was strong at $305 million, up by $45 million compared to the third quarter of 2024. Profits of associates continue to be driven by Eurobank and Poseidon Corp. In the quarter, we had net gains on investments of $426 million, driven by gains on our equity exposures of $525 million, offset by losses on our bond portfolio of $44 million, primarily from government bonds, and losses on other investments of $54 million, primarily reflecting unrealized losses on our preferred shares in digit insurance. Net gains of $525 million on our equity and equity-related holdings were driven principally by unrealized gains on Orla Mining, Commercial International Bank, and Forem. We have always said, and please remember, our net gains or losses on investments only make sense over the long term and will fluctuate from quarter to quarter, or for that matter, year to year. More on investments from Wade. As mentioned in previous quarters, our book value per share of 1,204 does not include unrealized gains or losses in our equity account investments and our consolidated investments, which are not mark-to-market. At the end of the third quarter, the fair value of these securities is in excess of carrying value by $2.5 billion, an unrealized gain position, or $117 per share on a pre-tax basis. an increase of approximately $1 billion for the year, primarily driven by Eurobank. In October, we announced an agreement to sell our 80% interest in Eurolife's life insurance operations for approximately $940 million to Eurobank. At the same time, Fairfax will purchase a 45% interest in Eurobank's property and casualty company in Cyprus, ERB insurance for approximately 68 million. We are pleased to be able to maintain focus of our insurance operations on property and casualty insurance and reinsurance while still benefiting from the continued success of EuroLife's life business through our ownership stake in the bank. We wish the very best to Nikos, Delandes, and the entire team that will be moving under the ownership of Eurobank. We expect a pre-tax gain of approximately 250 million on the transaction. That will be trued up and accounted for on closing of the transaction, which is expected in the first quarter of 2026. We are also happy to announce that Alex Cerrigiorgio The current CEO of EuroLife will transition to become executive chairman of EuroLife's general P&C insurance operation and chairman of our new Cypress company. Vassilis Nikiforakis, currently CFO of EuroLife, will become managing director and CEO of the general insurance business. Vassilis has been with EuroLife for 18 years, and is another great example of the internal transactions that we like to make within our organization. Earlier this week, Fairfax and Bill McMorrow, Chairman and CEO of Kennedy Wilson, issued a take private offer to the Board of Directors of Kennedy Wilson for $10.25 per share, a premium of approximately 38% of the closing stock that day. their board has formed a special committee to evaluate the proposal and its options. We do not plan to provide any updates unless and until we enter into a definitive agreement regarding the proposed transaction. There has been some questions recently regarding share ownership of our executives. I wanted to highlight that all our senior executives receive a significant amount of their annual compensation in Fairfax shares with the shares vesting over time. It is not often, but there are times when some executives may sell shares for personal reasons, such as estate planning or general tax purposes. We don't generally comment on the specific personal circumstances of any reporting insider, but we can say that it's important to us that all members of our executive team maintain meaningful, significant proportions of their personal wealth in Fairfax shares. which is the case today, especially due to the long-term tenor of our officers and executives. As an insider and Hambla Watsi executive, it was reported in the quarter that Wade Burton had sold some Fairfax shares for family and estate planning. After the sale, he continues to hold 80% of his original position. Fairfax bought the shares sold by Wade in the open market And as we mentioned in our press release, Fairfax continued to buy back shares in the third quarter and in the fourth quarter as well under our share buyback plan. We view this as a great long-term investment for the company. We continue to benefit from a stable base of annual operating income of approximately $5 billion. And we expect, of course, no guarantees it is sustainable for the next three to four years, with $2.5 billion from interest and dividend income, $1.5 billion from underwriting profit with normalized catastrophe losses, and $1 billion from associates and non-insurance companies. Fluctuations in stock and bond prices will be on top of that, but this only really matters over the long term. I will now pass the call to Wade Burton, our President and Chief Investment Officer of HamlaWATSA, to comment on our investments.

Thank you, Peter, and good morning. We continue to be in excellent shape on the investment side at Fairfax. Just as a reminder, our portfolio is roughly broken into three categories, fixed income to support the reserves, public mark-to-market common stocks and preferred investments, and equity-accounted associates and privately-owned companies. Our fixed income investments ended the quarter at $50.9 billion with an average yield of 5.1%. The fixed income investments are conservatively positioned with low duration and very little credit risk. What we do take on for credit risk, like our mortgage portfolio, is stringently underwritten credit by credit. Our team spends a lot of effort analyzing the credit quality on anything not backed by government. Over the years, our performance on this class of fixed income has been outstanding. Our common stock and preferred investments ended Q3 at $14.2 billion. Outside of the Fairfax TRS, which we see as excellent value, the biggest investments are Metlin Energy and Metals, Orla Mining, CIB Bank in Egypt, Strathcona Energy, and Strathcona Energy, a Western Canadian oil company, capably run by Adam Watrous. We know all of these investments well. Management in all cases is outstanding. All are well financed and cheap. And from an underlying business standpoint, it's easy to see the path to compounding our investment dollars on each one. The equity-accounted associates and privately-owned companies ended Q3 at $11.8 billion. Led by Eurobank, Poseidon, and Recipe, but now also including Sleep Country, Peak Achievement, and Meadow, all are in outstanding shape, and most are having a strong 2025 so far. In all our controlled investee companies, operations are decentralized. The presidents run their businesses. Fairfax is in charge of the capital decisions. The president's in charge of operations. We also get involved in succession to make sure any transitions are seamless. While we hope our presidents live forever, sometimes it's not the case, and we work to ensure the companies continue in the Fairfax mold. Lastly, given it's a quiet quarter on the investment side, I thought I'd touch on our investment team. In the beginning, and for many years, it was Prem, Roger, and Brian, the founding group, who really ran the investments. Over the last 15 years or so, we have added a lot of outstanding talent and it's really exciting to see how well the team is working together with the founding group. The team is a big part of why I'm so optimistic and confident about the investment side of Fairfax. It's a sensible, accountable, and experienced group focused on the right things for shareholders and really working well together. With that, I'll pass it over to Amy Shirk, our CFO.

Thank you, Wade. I'll begin my comments by discussing our non-insurance company results in the third quarter of 2025. Non-insurance companies reported operating income of $211 million in the third quarter of 2025, compared to $49 million in the third quarter of 2024, primarily reflecting the acquisition of Sleep Country on October 1, 2024, and the consolidation of peak achievement on December 20, 2024, which recorded operating earnings of $34 million and $53 million, respectively, in the third quarter of 2025. Additionally, operating income for the third quarter of 2025 benefited from higher margins at AGT and higher business volumes at Gravalia Hospitality. Our non-insurance company segment also include our consolidated holdings, in Recipe, Fairfax, India, Dexterra, Sporting Life, Thomas Cook, and Meadow Foods. As Wade mentioned, all of these companies have continued to perform well in the first nine months of 2025. Looking at our share of profit from investments in associates in the third quarter of 2025, consolidated share of profit of associates of $305 million in the third quarter of 2025 principally reflected our share of profit of 141 million from Eurobank, 68 million from Poseidon, and 39 million from Exco. A few comments on transactions within the quarter. On August 13, 2025, the company acquired all of the units of the KEGG Royalties Income Fund that it did not already own for purchase consideration, of $150 million or $207 million in Canadian, and subsequently completed a reorganization to amalgamate its wholly owned subsidiary, Keg Restaurants Limited, with the Keg Fund. The company then partnered with LFG Growth Partners, led by Mr. Richard Jaffrey, and on September 25, 2025, deconsolidated the assets and liabilities of the Keg from Recipe, and its non-insurance reporting segment and has recorded its retained interest in the CAG as an investment in associates. On August 1st, 2025, Blue Ant Media became a public company via reverse takeover of Boat Rocker, which was then renamed Blue Ant Media Corporation. The company deconsolidated the assets and liabilities of Blue Ant Media from its non-insurance reporting segment and recorded its retained interest in Blue Ant Media at fair value through profit and loss within portfolio investments. Subsequent to September 30, 2025, the company has purchased 107,525 of its subordinate voting shares for cancellation at an aggregate cost of $178 million, or $1,659 per share. The company's consolidated statement of earnings in the third quarter and first nine months of 2025 were also impacted by changes in interest rates, and specifically the effects they had on discounting on prior year net losses on claims and our fixed income portfolio. Net earnings of $1.2 billion in the third quarter of 2025 included a net loss of $308 million, reflecting the effect of changes in interest rates during the quarter comprised of a net loss on insurance contracts and reinsurance contracts held of $263 million and net losses on bonds of $44 million. We generally expect that a decrease in interest rates will result in an increase to the carrying values of the company's fixed income portfolio and its liability for incurred claims, net of reinsurance, resulting in the partial mitigation of interest rate risk. In the current quarter, however, we recorded net losses on both. Net losses on bonds were disproportionately impacted by unrealized losses on certain other government bonds that experienced an increase in yield during the quarter, which outweighed gains on U.S. Treasuries and other bonds that benefited from declining yields. While the net loss on insurance contracts and reinsurance contract assets held primarily reflected decreased short-term discount rates. Comparatively, net earnings of $1 billion in the third quarter of 2024 included a net benefit of $64 million, reflecting the effect of changes of interest rates comprised of net gains on bonds of $829 million, partially offset by net losses on insurance contracts and reinsurance contract assets held of $765 million. When you compare the year-over-year change on a pre-tax basis, the changes in interest rates resulted in an approximate $371 million movement in our pre-tax earnings. Despite the unusual result in the third quarter of 2025, on a year-to-date basis, the company recorded a net loss on insurance contracts and reinsurance contracts held of $486 million and net gains on bonds of $419 million, which aligned with our general expectation for the partial mitigation of interest rate risk. Please refer to page 37 of our MD&A within the company's interim consolidated financial statements for the third quarter of 2025 for a table that presents the company's total effects of discounting and risk adjustment on our net insurance liabilities and the effects of changes in interest rates on the company's fixed income portfolio set out in a format that the company believes assists in understanding our net exposure to interest rate risk. I will close with a few comments on our financial condition. Maintaining an emphasis on financial soundness, at September 30, 2025, the company held $2.8 billion of cash and investments at the holding company. has access to our fully undrawn $2 billion unsecured revolving credit facility and an additional $1.9 billion at fair value of investments in associates and consolidated non-insurance companies owned by the holding company. Holding company cash and investments support the company's decentralized structure and enable the company to deploy capital efficiently to its insurance and reinsurance companies. On August 14, 2025, the company opportunistically completed offerings of 290 million or 400 million Canadian and 218 million or 300 million Canadian principal amounts of 4.45 and 5.1% on secured senior notes due in 2035 and 2055. for net proceeds of $288 million and $216 million respectively after discount commissions and expenses. At September 30th, the excess of fair value over carrying value of investments in non-insurance associates and market traded consolidated non-insurance subsidiaries was $2.5 billion compared to $1.5 billion at December 31st, 2024. The pre-tax excess of $2.5 billion is not reflected in the company's book value per basic share, but is regularly reviewed by management as an indicator of investment performance. The company's total debt to total capital ratio, excluding non-insurance companies, increased to 26.5% at September 30, 2025, compared to 24.8% at December 31, 2024, primarily reflecting increased total debt and redemptions of the company's series E, F, G, H, and M preferred shares, partially offset by increased common shareholders' equity. The company's total debt to total capital ratio remains within the company's internal targets. Common shareholders' equity increased by approximately $2.7 billion to $25.7 billion at September 30, 2025, up from $23 billion at December 31, 2024, primarily reflecting net earnings attributable to shareholders of Fairfax of $3.5 billion, other comprehensive income of $372 million primarily related to unrealized foreign currency translation gains, net of hedges as a result of the strengthening of foreign currencies against the U.S. dollar, partially offset by purchases of 541,794 subordinate voting shares for cancellation for cash consideration of 857 million or 1581 per share, and payments of common and preferred share dividends totaling $364 million. In closing, book value per basic share was 1204 at September 30, 2025, compared to 1,060 at December 31, 2024, representing an increase per basic share in the first nine months of 2025 of 15.1%, adjusted to include the $15 per share common dividend paid in the first quarter of 2025. That concludes my remarks, and I will now turn the call back to Peter. Thank you.

Thank you, Amy. Denise, we are now happy to take any questions you might have.

Thank you. If you would like to ask a question, please press star 1. Please unmute your phone and record your name clearly when prompted. Your name is required to introduce your question. To withdraw your question, you may press star 2. Our first question comes from Steven Boland with Raymond James. Please go ahead.

Wow, first, for me, good morning, everyone. You mentioned some pockets of softness and that you're able to be a little bit more nimble, you know, growing in the areas that are not soft, you know, curtailing. premium and some of the other areas. I'm just wondering if you could give a little bit more detail where you're seeing some of that softness. Is it geography? Is it certain business lines? If you could provide a little more detail, that would be great.

Sure. Yeah, like I said in the prepared remarks, you know, we benefit greatly from our diversified operations. We write right across the world. We write about $33 billion of premium today. And... You know, as I said, that the markets, we do see softening in the markets, but it's not a soft market. And to highlight as well that, you know, the underlying margins in the business, we continue to see to be very strong. And, you know, on the pricing side, we're getting, you know, single digit price increases On the casualty side, it tends to be much higher. Property side, lower. And especially on the property cat business, reinsurance in particular, we're seeing pricing pressure. For that, that's not necessarily a bad thing as about 20% of our business is reinsurance. The other 80%, you know, we buy reinsurance on that. So overall... You know, our premiums continue to grow, but we're very focused on when pricing is coming down, we're focused on the bottom line. Thank you for your question. And next question, please.

The next question comes from Jamie Glone with National Bank Capital Markets. Please go ahead. Good morning, Jamie.

Yeah, I guess if I can ask a couple questions here in one shot before I get cut off. First, I may have missed it, but can you talk about the strategic exited line in Canada? And then second, on the investment side of the equation, can you give us your thoughts around what's the strategy for the total return swap situation? And, you know, using excess cash and capital to invest in businesses, similar to the KW transactions, you know, peak transaction in businesses that you own. Is that a more likely use of capital in the near term?

Sure. Thanks, Jamie. And could you repeat your first question?

There was a strategic exit, exited line at Northbridge. Okay.

I'm not exactly sure of the strategic exit, unless you're talking about their TruShield business. That might be what you're thinking of, and that was just a small book of business they wrote on small businesses. They did exit that, but it wasn't significant for the company. On your TRS, Fairfax TRS, We continue to hold the position. As we said in the past, it's an investment position for us, and we continue to see good value for that. And then on the private side, yeah, if there's companies we know really well with strong management positions and there's minority interest, If value is there, we'll continue to look at allocating capital to that. But it's all part of the bigger picture, really. First is our financial strengths we're focused on. Second, capital in our insurance companies, maintaining that. Buying back our own shares. We have minority interest in our own insurance companies as well that we'd like to buy back over time. And then we can invest any excess capital in whichever way, you know, Hamlawatza thinks where the value is. So thank you for your question. And next question, please.

Thank you. And as a reminder, it is star one if you would like to ask a question. The next question comes from Tom McKinnon with BMO Capital. Please go ahead.

Good morning, Tom. Thanks. Good morning. Thanks. Good morning. I'm going to follow James' strategy of trying to get in with two. The first is just with respect to the non-insurance companies, some pretty good lift in terms of their contribution. A lot of it's embedded in Align, and that's other – you've got – you know, Gravalia Hospitality, maybe AGT in there, some other companies. If you can give us a little bit more color, what you're seeing there, if there's anything unusual in the quarter. And then the other is about the cash component of your investment portfolio. It's 17% now, and I think it was 15% in the second quarter. Any comments about why that may have increased and what you're thinking about there? Thanks.

Sure. Thanks, Tom. Just on our non-insurance consolidated investments, you're exactly right. It's performing very well. Eurobank and Poseidon continue to drive the results. And if you look at both of those companies, they're the largest companies in that group. continued to perform very, very well. We think there's still good value in both of the companies. You know, they're trading at maybe around eight times earnings. And so with the management teams at both of those, we're very excited about the future. And then adding in that bucket, we have Fairfax, we have Fairfax, India, we have Recipe, Meadows, So a lot of good companies there that have strong earnings and we're very excited about the future for these non-insurance consolidated investments. Your second question on the cash position, you're exactly right. It's been building over time. It's about 17% of the portfolio. With the markets where they are today, we want to keep our portfolio as conservative as possible and with investment flexibility. That's why we have a large cash position. We have a large government bond position. And in the meantime, we're earning a nice return on that. And we can wait for opportunities to come our way and react accordingly. So thank you for your question, Tom. Next question, please.

That comes from Daniel Baldini with Oberon Asset Management. Please go ahead.

Great. Thanks for taking my call and for the wonderful results once again. So my question is about prediction markets. And I noticed a couple months ago a little article on a website called Risk Market News. entitled the prediction markets are coming for risk markets and insurance and it there were a couple of lines in there that i'll read quickly so whether prediction markets now handle trades reaching tens of thousands of dollars with institutional participation growing rapidly as firms explore parametric hedging outside traditional insurance structures the implications are profound where insurers traditionally relied on cat models and broker negotiations prediction markets offer instant liquid pricing for weather-related exposures. And it goes on and on. Anyway, you know, the volumes clearly are very small, but, you know, ICE just announced a $2 billion investment in Polymarket. So I'm wondering if you could talk a little bit about how you might position Fairfax to avoid being disrupted by prediction markets. Thanks. Thanks.

No, thank you for the question. No, and it's a good question. You know, we're always looking at, you know, the future of insurance and insure tech and how it could disrupt our business going forward. And especially, you know, with AI, we have a group of a team at Fairfax made up from all our companies that are focusing on AI technology. And in particular on the weather-related and CAT side, you know, we still just, we traditionally, we just focus on the reinsurance side. We don't participate on a lot of the models, I mean, the index models and writing that types of business. But it is a risk, to our industry, and we look at it carefully, we analyze it, all our companies are on top of it. But for now, we're happy where we are. We're not really participating in that, and we'll see how it goes over time. So thank you for your question. Next question, please.

The next question comes from Josh Donfeld with Greenland. Please go ahead.

Hi, everyone.

Hi, Josh.

I was going to ask you about how you're looking at some of the bank privatizations and, you know, potential M&A in India.

Yeah, no. As you know, we have a significant investment in India, primarily through Fairfax, India. And we have a long history of investing there. And we have a team on the ground that has done an outstanding job. So we'll continue to look at India. We're very high on it. We have some significant holdings, such as the Bangalore International Airport, CSB Bank, IAFL Holdings, all within Fairfax India. Outside of that, we have Thomas Cook, Quest, and Digit Insurance, our P&C insurance company within India. On the banking side, currently CSB is our largest banking position. On privatization, there's really nothing that we would comment on at this time. Thank you for your question. Next question, please.

There are currently no further questions.

Well, thank you, Denise. If there are no further questions then, thank you for joining us on our third quarter 2025 conference call. Thank you.

Thank you. That does conclude today's conference. Thank you for dialing in. We appreciate your participation. Have a great rest of your day and you may disconnect.