Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 21

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 21
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 to continue to experience
the effects of this cyclicality, which, during down periods, could significantly reduce the amount of premium we write and could harm
our financial condition, profitability or cash flows.

In the reinsurance industry,
the supply of reinsurance is related to prevailing prices and levels of underwriting capacity surplus that, in turn, may fluctuate in
response to changes in rates of return being realized in the broader capital markets. If premium rates change or other reinsurance policy
terms and conditions change expanding coverage, particularly if the present level of demand for reinsurance decreases because insurers
require less reinsurance or the level of supply of reinsurance increases as a result of capital provided by existing reinsurers or alternative
forms of reinsurance capacity enter the market, the profitability of our reinsurance business could be adversely affected.

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Our business could be harmed because of our potential exposure to asbestos, environmental and other latent claims.

We have established loss
reserves for asbestos and environmental and other latent claims that represent our best estimate of ultimate claims and claims adjustment
expenses based upon all known facts and current law. As a result of significant issues surrounding liabilities of insurers, risks inherent
in major litigation and diverging legal interpretations and judgments in different jurisdictions, actual liability for these types of
claims could exceed the loss reserves set by us by an amount that could be material to our financial condition, profitability or cash
flows in future periods.

We cannot assure you that our reinsurers and certain insureds will pay us on a timely basis or at all.

Most insurance and reinsurance
companies reduce their exposure to any individual claim by reinsuring amounts in excess of their maximum desired retention. Reinsurance
is an arrangement in which an insurer, called the cedent, transfers insurance risk to another insurer, called the reinsurer, which accepts
the risk in return for a premium payment. This third-party reinsurance does not relieve us, as a cedent, of our primary obligation to
the insured. Recoverables from reinsurers balances reported in reinsurance contract assets held may become uncollectible due to reinsurer
solvency and credit concerns, due to the potentially long time period over which claims may be paid and the resulting recoveries may be
received from the reinsurers, or due to policy disputes. If reinsurers are unwilling or unable to pay us amounts due under reinsurance
contracts, we will incur unexpected losses and our results of operations, financial condition and cash flows could be