TORONTO, ONTARIO--(Marketwired - Nov. 11, 2016) - Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U)
announces that after considering the effect of the recent U.S. elections and the potential for changes that may dramatically
impact the U.S. economy and, therefore, the U.S. equity markets, the company determined it was prudent to significantly reduce
its hedge of its equity investment exposure immediately. As a result of this action, equity hedges currently represent
approximately 50% of the company's equity and equity-related holdings (a reduction from 112.7% at September 30,
2016). Fairfax will continue to evaluate the post-election U.S. economic indicators and may determine to reduce those equity
hedges further.
"We hedged our equity investments to protect our shareholders' capital from exposure to the impact of deteriorating economic
fundamentals," said Prem Watsa, Chairman and CEO of Fairfax. "We constantly monitor these hedge positions relative to
economic fundamentals. We believe the U.S. election may result in fundamental changes that may bolster economic growth and
business development. As a result, there is the potential for a longer term rally in U.S equity markets that reduces the
need for the capital preservation protection of equity hedging."
Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance
and investment management.
Certain statements contained herein may constitute forward-looking statements and are made pursuant to the "safe
harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Fairfax to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to:
a reduction in net earnings if our loss reserves are insufficient; underwriting losses on the risks we insure that are higher or
lower than expected; the occurrence of catastrophic events with a frequency or severity exceeding our estimates; changes in
market variables, including interest rates, foreign exchange rates, equity prices and credit spreads, which could negatively
affect our investment portfolio; the cycles of the insurance market and general economic conditions, which can substantially
influence our and our competitors' premium rates and capacity to write new business; insufficient reserves for asbestos,
environmental and other latent claims; exposure to credit risk in the event our reinsurers fail to make payments to us under our
reinsurance arrangements; exposure to credit risk in the event our insureds, insurance producers or reinsurance intermediaries
fail to remit premiums that are owed to us or failure by our insureds to reimburse us for deductibles that are paid by us on
their behalf; the timing of claims payments being sooner or the receipt of reinsurance recoverables being later than anticipated
by us; the inability of our subsidiaries to maintain financial or claims paying ability ratings; risks associated with
implementing our business strategies; risks associated with our use of derivative instruments; the failure of our hedging methods
to achieve their desired risk management objective; a decrease in the level of demand for insurance or reinsurance products, or
increased competition in the insurance industry;
the impact of emerging claim and coverage issues; the failure of any of the loss limitation methods we employ; our inability to
access cash of our subsidiaries; our inability to obtain required levels of capital on favourable terms, if at all; the loss of
key employees; our inability to obtain reinsurance coverage in sufficient amounts, at reasonable prices or on terms that
adequately protect us; the passage of legislation subjecting our businesses to additional supervision or regulation, including
additional tax regulation, in the United States, Canada or other jurisdictions in which we operate; risks associated with
government investigations of, and litigation and negative publicity related to, insurance industry practice or any other conduct;
risks associated with political and other developments in foreign jurisdictions in which we operate; risks associated with legal
or regulatory proceedings; failures or security breaches of our computer and data processing systems; the influence exercisable
by our significant shareholder; adverse fluctuations in foreign currency exchange rates; our dependence on independent brokers
over whom we exercise little control; an impairment in the carrying value of our goodwill and indefinite-lived intangible assets;
our failure to realize deferred income tax assets; technological or other change which adversely impacts demand, or the premiums
payable, for the insurance coverages we offer; and assessments and shared market mechanisms which may adversely affect our U.S.
insurance subsidiaries. Additional risks and uncertainties are described in our most recently issued Annual Report
which is available at www.fairfax.ca and in our Supplemental
and Base Shelf Prospectus (under "Risk Factors") filed with the securities regulatory authorities in Canada, which
is available on SEDAR at www.sedar.com. Fairfax disclaims any intention
or obligation to update or revise any forward-looking statements.