AM Best Affirms Credit Ratings of Fairfax Financial Holdings Limited and Majority of Its Subsidiaries

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Long-Term Issuer Credit Rating
(Long-Term ICR) of “bbb” and the various Long-Term Issue Credit Ratings
(Long-Term IR) on the unsecured debt and preferred equity of Fairfax
Financial Holdings Limited (Fairfax) (Toronto, Canada). AM Best
also has affirmed the Financial Strength Rating (FSR) of A (Excellent)
and the Long-Term ICRs of “a+” of the subsidiaries of Odyssey Group
Holdings, Inc. (Odyssey Group). The outlook of the Credit Ratings
(ratings) is stable. Additionally, AM Best has assigned the FSR of A
(Excellent) and the Long-Term ICR of “a+” to Newline Europe Versicherung
AG (Newline AG) (Germany), which has been rated as a member of and added
to the Odyssey Group. The outlook assigned to the ratings is stable.
Concurrently, AM Best has affirmed the FSR of A (Excellent) and the
Long-Term ICRs of “a” of the members of the Crum & Forster Insurance
Group (C&F), the members of the Zenith National Insurance Group (Zenith
Group), the members of Northbridge Financial Corporation (Northbridge)
(Toronto, Canada) and Wentworth Insurance Company Limited (Wentworth)
(Barbados). In addition, AM Best has affirmed the Long-Term ICRs of
“bbb” and the Long-Term IRs of Zenith National Insurance Corp.
(headquartered in Woodland Hills, CA) and Fairfax (US) Inc. (Delaware),
both of which are indirect wholly owned, downstream holding companies of
Fairfax. The outlook of these ratings is stable. (See link below for a
detailed listing of the companies and ratings.)

The ratings of Odyssey Group reflect its balance sheet strength, which
AM Best categorizes as strongest, as well as its strong operating
performance, neutral business profile and appropriate enterprise risk
management (ERM). The ratings also reflect group member Odyssey
Reinsurance Company’s (Odyssey Re) rank among the top global reinsurers,
supported by its diversified global geographic footprint, which includes
reinsurance and specialty primary insurance, large-line capacity and
broad product offerings. These positive attributes are supported by
Odyssey Re’s strongest risk-adjusted capitalization and strong operating
performance. Somewhat offsetting these strengths is Odyssey Re’s
challenging operating environment. The ratings assigned to Newline AG
reflect its strategic importance to the group, as it provides the
ability to continue servicing customers in the European Union
post-Brexit. It also reflects the explicit support afforded to that
entity via a net worth maintenance agreement and reinsurance agreement
with its parent, Newline Insurance Company Limited.

The ratings of C&F reflect its balance sheet strength, which AM Best
categorizes as very strong, as well as its adequate operating
performance, neutral business profile and appropriate ERM. The ratings
also reflect the benefits the group derives from its role within the
larger Fairfax enterprise. C&F also benefits from its diversified and
growing product portfolio and distribution networks. Management
continues to focus on growth in its specialty business at appropriate
rates, terms and conditions. Partially offsetting these positive rating
factors are the competitive market conditions that persist in the
commercial lines sector and relatively unfavorable expense levels.

The ratings of the Zenith Group reflect its balance sheet strength,
which AM Best categorizes as very strong, as well as its adequate
operating performance, neutral business profile and appropriate ERM. The
ratings also are enhanced by the benefits the group derives from its
position in the Fairfax enterprise. Furthermore, the ratings reflect
management’s expertise and commitment to maintaining underwriting
discipline throughout market cycles. Zenith’s underwriting performance
over many years has outperformed the workers compensation market.
Somewhat offsetting these positive rating factors is Zenith’s
concentration of written premium in California and Florida.

The ratings of Northbridge reflect the group’s balance sheet strength,
which AM Best categorizes as strongest, as well as its adequate
operating performance, neutral business profile and appropriate ERM. The
ratings of Northbridge also acknowledge the group’s position within
Canada’s commercial insurance market, diversified commercial lines
franchise and strong broker distribution network. The group continues to
benefit from improved and strong underwriting performance within its
small to mid-market commercial segment. Partially offsetting these
positive rating factors are competitive market conditions that persist
in Canada’s commercial and personal lines segments, and the group’s
relatively unfavorable expense levels.

The ratings of Wentworth reflect its balance sheet strength, which AM
Best categorizes as very strong, as well as its adequate operating
performance, limited business profile and appropriate ERM. The ratings
also are enhanced by the benefits it derives from its position in the
Fairfax enterprise. In addition, the ratings of Wentworth are supported
by its historically profitable underwriting performance and loss reserve
position. The company benefits from its investment portfolio, which
includes a significant allocation of cash and short-term securities.
Partially offsetting these positive rating factors are the company’s
limited business profile and a concentration of property catastrophe
exposures within its book of business, which subjects it to a
substantial degree of volatility as evidenced over the past few years.

A complete
listing of Fairfax Financial Holdings Limited and its subsidiaries’
FSRs, Long-Term ICRs and Long-Term IRs also is available.

This press release relates to Credit Ratings that have been published
on AM Best’s website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Jennifer Marshall, CPCU, ARM
Director
+1 908
439 2200, ext. 5327
jennifer.marshall@ambest.com

Michael
Lagomarsino, CFA FRM
Senior Director
+1 908 439
2200, ext. 5810
michael.lagomarsino@ambest.com

Christopher
Sharkey
Manager, Public Relations
+1 908 439
2200, ext. 5159
christopher.sharkey@ambest.com

Jim
Peavy
Director, Public Relations
+1 908 439
2200, ext. 5644
james.peavy@ambest.com