Company: FRFXF
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028272
Chunk: 34

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-26
Form: 424B3
Chunk 34
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 of our premiums and our expenses are denominated in foreign currencies and a portion of our assets (including
investments) and loss reserves are also denominated in foreign currencies. We may, from time to time, experience losses resulting from
fluctuations in the values of foreign currencies (including when our foreign currency assets and liabilities are hedged) which could adversely
affect our financial condition, profitability or cash flows.

We rely on independent brokers over whom we exercise little control, which exposes us to certain risks.

We use brokers to distribute
our business and, in some instances, will distribute through agents or directly to customers. We may also conduct business through third
parties such as managing general agents where it is cost effective to do so and where we can control the underwriting process to ensure
our risk management criteria are met. Each of these channels has its own distinct distribution characteristics and customers. A large
majority of our business is generated by brokers (including international reinsurance brokers with respect to our reinsurance operations),
with the remainder split among the other distribution channels. This is substantially consistent across our insurance and reinsurance
subsidiaries.

Our insurance operations
have relationships with many different types of brokers including independent retail brokers, wholesale brokers and national brokers depending
on the particular jurisdiction, while our reinsurance operations are dependent primarily on a limited number of international reinsurance
brokers. We transact business with these brokers on a non-exclusive basis. These independent brokers also transact the business of our
competitors and there can be no assurance as to their continuing commitment to distribute our insurance and reinsurance products. Our
continued profitability depends, in part, on the marketing efforts of independent brokers and our ability to offer insurance and reinsurance
products and maintain financial ratings that meet the requirements and preferences of such brokers and their policyholders.

Because the majority of our
brokers are independent, there is limited ability to exercise control over them. In the event that an independent broker exceeds its authority
by binding us on a risk that does not comply with our underwriting guidelines, we may be at risk for that policy until the application
is received and a cancellation effected. Although to date we have not experienced a material loss from improper use of binding authority
by our brokers, any improper use of such authority may result in losses that could have a material adverse effect on our business, financial
condition, profitability or cash flows. Our insurance and reinsurance subsidiaries closely manage and monitor broker relationships and
regularly audit broker compliance with our