Author Topic: Fairfax2019  (Read 39477 times)

gary17

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Re: Fairfax2019
« Reply #80 on: September 06, 2019, 07:31:20 AM »
thanks
  i think BRK has a lot of cash , probably stand to benefit.

  FFH is cheap but of lesser quality and questionable culture.   hard for me to pull the trigger.


John Hjorth

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Re: Fairfax2019
« Reply #81 on: September 06, 2019, 08:12:23 AM »
https://www.woodlockhousefamilycapital.com/post/the-horse-story

This. Thank you for sharing, wisowis. Chris Mayer bents it in neon tubes : -Buy, if you're interested &/or want to get in, -hold on, if you're at full position [for you], & do not sell here at these levels.
ĒIn the race of excellence Ö there is no finish line.Ē
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

Spekulatius

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Re: Fairfax2019
« Reply #82 on: September 06, 2019, 05:23:55 PM »
Of course.  The hard market starts to appear when insurers, that have under-priced their contracts, consume capital in payouts for catastrophe losses.  These insurers tend to write less business as they need to preserve capital.  So, the insurers that have a counter-cyclical approach (i.e., write less business when pricing is soft and more when pricing is firm) have lots of available capital just as pricing increases (post-catastrophe pricing usually increases) and the overall capital is shrinking.  Hard markets can last a few months or a couple of years, often in niche categories, so putting capital to work at high rates for long periods is the aim of the game.  Not every insurer is geared to do this, so lots get caught up in increasing top-line revenues year by year.  Multi-cat years will shake out the weak capital.

- O

is a hard market good for P and C insurers?

The problem is now that so much hybrid capital (catastrophe bonds  etc.) is on standby to take advantage of any hard market, should it occur. Unless we have an unfavorable credit market at the same time than a hard insurance market, I donít see hard markets lasting.
To be a realist, one has to believe in miracles.

Spekulatius

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Re: Fairfax2019
« Reply #83 on: September 07, 2019, 08:52:47 AM »


$6b debt at the holding company is net $4b after cash...and the insurance companies do not have a lot of debt as they are strategically being less levered to be able to take advantage of an event, maintain high ratings and once you dividend their access capital to the holding company itís gone...so it does not concern me. Insurance companies are vastly undervalued.

Belated answer - the $4.3B in net debt with a $12.5B equity base is still higher than many other insurance cos that are typically 20-25% levered. Most other insurance cos donít have the equity exposure that FFH has though FF India, Africa and various other holdings. It clearly is a more levered insurer than many others.

FWIW, I sold my FF holding when it went to $480+ and essentially put the proceeds into BRKB, which consider a better bet. I would consider buying back FFH below $430, but that would probably be for a trade.
To be a realist, one has to believe in miracles.

UK

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Re: Fairfax2019
« Reply #84 on: September 08, 2019, 04:28:37 AM »
https://www.wsj.com/articles/storm-clouds-not-capital-ones-ease-for-reinsurers-11567767780

"Reinsurersí shares already have made huge gains this year. Arch Capital Group Ltd. and RenaissanceRe Holdings Ltd. are up 54% and 41% respectively. Arch Capital is priced at about 1.7 times book value, and RenaissanceRe is at 1.6 times. The latter is close to its highest level since 2007 on that measure."