Fairfax operates three insurance companies in North America: Crum & Forster (P&C), First Mercury (Surplus and Specialty), and Zenith National (Workmen’s Compensation). These three had total premiums of $1.492 billion* in 2010. The Zenith National addition closed in 2010 and the acquisition of First Mercury closed in February 2011. *This figure was calculated taking Crum & Forster’s premiums as reported in Fairfax’s 10-k, Zenith National’s premium from May-December as reported in Fairfax’s 10-k, and First Mercury’s premiums as reported in First Mercury’s 10-k.
Crum & Forster has averaged a combined ratio of 99.8% from 2002-2010 and compounded growth has been about 17% for the past ten years. Zenith National has a 30 year average combined ratio of 95%. First Mercury has an average combined ratio of 93.2% over the past nine years. It is obvious that these latter two companies are two exceptional underwriters with consistent profits on underwriting. Over the long term, these companies should help Fairfax grow float at no cost or