UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934
   For the Quarterly Period Ended:
    March 31, 2009

Commission File Number:
    333-84068    
  Crum & Forster
    Holdings Corp.
 (Exact Name of Registrant as
    Specified in its Charter)
   Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

04-3611900(I.R.S. Employer
    Identification Number)   305
    Madison Avenue, Morristown, New Jersey 07962 (Address
    of principal executive office)
  (973) 490-6600
 (Registrants telephone number, including area code)
  o þ
  o o
  Rule 12b-2
  Large accelerated
    filer  o

Accelerated
    filer  oNon-accelerated
    filer  þ (Do
    not check if a smaller reporting company)

Smaller reporting company  o
   Rule 12b-2 o þ
    Class

Number of Shares Outstanding at
    April 30, 2009Common Stock, $.01 Par Value


100




---



##### 



CRUM &
    FORSTER HOLDINGS CORP.
  Form 10-Q
  Index
   
 PageNumberPART IFINANCIAL INFORMATIONITEM 1.

FINANCIAL STATEMENTSConsolidated Balance Sheets at March 31,
    2009 (Unaudited) and December 31, 2008


3Consolidated Statements of Operations for the
    Three Months Ended March 31, 2009 and 2008 (Unaudited)


4Consolidated Statements of Shareholders
    Equity for the Three Months Ended March 31, 2009 and 2008
    (Unaudited)


5Consolidated Statements of Comprehensive Income
    for the Three Months Ended March 31, 2009 and 2008
    (Unaudited)


6Consolidated Statements of Cash Flows for the
    Three Months Ended March 31, 2009 and 2008 (Unaudited)


7Notes to Consolidated Financial Statements


8ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


24ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


38ITEM 4T.

CONTROLS AND PROCEDURES


40PART IIOTHER INFORMATIONITEM 1.

LEGAL PROCEEDINGS


41ITEM 6.

EXHIBITS


41SIGNATURES


42INDEX TO EXHIBITS


43   2




---



##### 



PART I
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  CRUM &
    FORSTER HOLDINGS CORP.
  CONSOLIDATED
    BALANCE SHEETS
  (Dollars
    in thousands, except per share amounts)
  (Unaudited)
  March 31,


December 31,2009


2008ASSETSInvestments:Fixed income securities,
    available-for-sale,
    at fair value (amortized cost of $1,402,958 and $1,466,114 in
    2009 and 2008, respectively)

$
1,515,997


$
1,533,334Fixed income securities,
    held-for-trading,
    at fair value


300,084



233,998Equity securities, at fair value (cost of $1,231,087 and
    $1,106,098 in 2009 and 2008, respectively)


987,660



1,020,154Investments at equity


107,460



117,586Derivatives and other invested assets, at fair value


264,222



412,747Short-term investments, at fair value


56,798



549,937Total investments


3,232,221



3,867,756Cash and cash equivalents


306,158



159,862Assets pledged for derivatives






4,416Accrued investment income


35,836



29,378Premiums receivable


174,360



182,158Reinsurance recoverable


741,570



759,028Reinsurance recoverable from affiliates


205,658



209,189Prepaid reinsurance premiums


30,156



28,995Deferred income taxes


340,700



239,077Deferred policy acquisition costs


48,806



52,705Other assets


66,892



66,316Total assets

$
5,182,357


$
5,598,880LIABILITIESUnpaid losses and loss adjustment expenses

$
2,871,026


$
2,987,803Unearned premiums


340,363



366,362Funds held under reinsurance contracts


231,874



228,835Accounts payable and other liabilities


252,394



417,669Deferred income on retroactive reinsurance


117,556



121,277Long-term debt


310,889



310,502Total liabilities


4,124,102



4,432,448Commitments and contingencies (Note 9)SHAREHOLDERS EQUITYCommon stock, $0.01 par value; 1,000 shares
    authorized; 100 issued and outstanding






Additional paid-in capital


740,993



740,993Accumulated other comprehensive loss, net of tax


(84,685
)


(7,455
)Retained earnings


401,947



432,894Total shareholders equity


1,058,255



1,166,432Total liabilities and shareholders equity

$
5,182,357


$
5,598,880   The accompanying notes are an integral part of the
    consolidated financial statements.
 3




---



##### 



CRUM &
    FORSTER HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  (Dollars
    in thousands)
  (Unaudited)
  Three Months EndedMarch 31,2009


2008REVENUESPremiums earned

$
207,430


$
271,810Investment income


35,270



15,841Realized investment (losses) gains


(91,071
)


155,268Total revenues


151,629



442,919EXPENSESLosses and loss adjustment expenses


135,850



209,610Policy acquisition costs


29,555



38,449Other underwriting expenses


37,882



42,608Interest expense


6,939



7,020Other expense


797



2,142Total expenses


211,023



299,829(Loss) income before income taxes and equity in earnings of
    investees


(59,394
)


143,090Income tax (benefit) expense


(28,367
)


49,226(Loss) income before equity in earnings of investees


(31,027
)


93,864Equity in earnings (losses) of investees, net of tax


80



(463
)NET (LOSS) INCOME

$
(30,947
)

$
93,401   The accompanying notes are an integral part of the
    consolidated financial statements.
 4




---



##### 



CRUM &
    FORSTER HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  (Dollars
    in thousands)
  (Unaudited)
  Three Months EndedMarch 31,2009


2008COMMON STOCKBalance, beginning and end of period

$



$
ADDITIONAL PAID-IN CAPITALBalance, beginning and end of period


740,993



740,993ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXBalance, beginning of period


(7,455
)


44,479Cumulative effect of adoption of Statements of Financial
    Accounting Standards Nos. 157 and 159






(29,897
)Balance, beginning of period, after cumulative effect of
    adjustments


(7,455
)


14,582Unrealized investment losses, net of transfers to realized
    investment gains and losses


(77,310
)


(8,917
)Foreign currency translation


137



205Amortization of actuarial gain and transition obligation
    included in net periodic benefit costs


(57
)


76Balance, end of period


(84,685
)


5,946RETAINED EARNINGSBalance, beginning of period


432,894



507,987Cumulative effect of adoption of Statements of Financial
    Accounting Standards Nos. 157 and 159






86,101Balance, beginning of period, after cumulative effect of
    adjustments


432,894



594,088Net (loss) income


(30,947
)


93,401Dividends to shareholder






(80,000
)Balance, end of period


401,947



607,489TOTAL SHAREHOLDERS EQUITY

$
1,058,255


$
1,354,428   The accompanying notes are an integral part of the
    consolidated financial statements.
 5




---



##### 



CRUM &
    FORSTER HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
  (Dollars
    in thousands)
  (Unaudited)
  Three Months EndedMarch 31,2009


2008NET (LOSS) INCOME

$
(30,947
)

$
93,401Change in components of other comprehensive loss for the period,
    before tax:Unrealized investment losses, net of transfers to realized
    investment gains and losses


(118,938
)


(13,718
)Foreign currency translation


211



315Amortization of actuarial gain and transition obligation
    included in net periodic
    benefit costs


(87
)


118Other comprehensive loss for the period, before tax


(118,814
)


(13,285
)Deferred income tax benefit for the period:Deferred income tax benefit from unrealized investment losses


41,628



4,801Deferred income tax expense from foreign currency translation


(74
)


(110
)Deferred income tax benefit (expense) from amortization of
    actuarial gain and transition obligation included in net
    periodic benefit costs


30



(42
)Total deferred income tax benefit for the period


41,584



4,649Other comprehensive loss for the period, net of tax


(77,230
)


(8,636
)COMPREHENSIVE (LOSS) INCOME

$
(108,177
)

$
84,765   The accompanying notes are an integral part of the
    consolidated financial statements.
 6




---



##### 



CRUM &
    FORSTER HOLDINGS CORP.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  (Dollars
    in thousands)
  (Unaudited)
  Three Months EndedMarch 31,2009


2008OPERATING ACTIVITIESNet (loss) income

$
(30,947
)

$
93,401Adjustments to reconcile net income to net cash from operating
    activities:(Accretion of discount) amortization of premium on fixed income
    securities


(2,491
)


436Realized investment losses (gains)


91,071



(155,268
)Losses of equity method investees, net of dividends






831(Earnings) losses of investment companies and similar equity
    method investees


(804
)


13,680Depreciation and amortization


1,546



864Deferred income tax (benefit) expense


(60,037
)


4,727Other non-cash net income adjustments


2,429



3,881Changes in:Accrued investment income


(7,319
)


14,887Premiums receivable


7,423



415Reinsurance recoverable


18,253



42,741Prepaid reinsurance premiums


(1,161
)


(1,977
)Deferred policy acquisition costs


3,899



3,392Other assets


1,716



17,344Unpaid losses and loss adjustment expenses


(116,777
)


(5,633
)Unearned premiums


(25,999
)


(25,180
)Accounts payable and other liabilities


(88,041
)


15,879Net cash (used in) provided by operating activities


(207,239
)


24,420INVESTING ACTIVITIESPurchases of fixed income securities,
    available-for-sale


(182,481
)


(98,597
)Proceeds from sales of fixed income securities,
    available-for-sale


151,463



194,093Proceeds from maturities of fixed income securities,
    available-for-sale


48,300



550Purchases of fixed income securities,
    held-for-trading


(89,731
)


Proceeds from sales of fixed income securities,
    held-for-trading


15,873



Purchases of equity securities


(212,687
)


(82,326
)Proceeds from sales of equity securities


38,288



Net sales (purchases) of investments at equity


5,458



(40
)Purchases of derivatives and other invested assets


(799
)


(4,548
)Proceeds from sales of derivatives and other invested assets


106,262



139,127Purchases of short-term investments


(104,167
)


(435,285
)Proceeds from sales of short-term investments


574,172



352,422Net change in obligation to return short-sale obligations






(1,611
)Net change in cash and cash equivalents held as collateral


4,416



14,143Net settlement of futures contracts


(343
)


Purchases of fixed assets


(489
)


(363
)Net cash provided by investing activities


353,535



77,565FINANCING ACTIVITIESDividends to shareholder






(80,000
)Net cash used in financing activities






(80,000
)Net change in cash and cash equivalents


146,296



21,985Cash and cash equivalents, beginning of period


159,862



147,506Cash and cash equivalents, end of period

$
306,158


$
169,491SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest

$



$
Cash paid to parent for income taxes

$
108,785


$
12,557SUPPLEMENTAL NON-CASH OPERATING AND INVESTING ACTIVITIESFixed income securities transferred to parent as payment for
    income taxes

$
54,008


$
   The accompanying notes are an integral part of the
    consolidated financial statements.
 7




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##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands) 1.
    Organization
    and Basis of Presentation      Form 10-K
    2.
    Recent
    Accounting Pronouncements    FSP
    FAS 157-4 Determining Fair Value When the Volume and Level of Activity
    for the Asset or Liability have Significantly Decreased and
    Identifying Transactions That Are Not Orderly,
  FSP
    FAS 115-2
    and
    FAS 124-2 Recognition and Presentation of Other Than Temporary
    Impairments,
 8




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  FSP
    FAS 107-1
    and APB
    28-1 Interim disclosures about Fair Value Measurement Disclosures about Fair
    Value of Financial Instruments, Interim
    Financial Reporting,
  FAS 157-4 115-2 FAS 124-2 157-4 FAS 115-2 FAS 124-2 FAS 107-1 28-1
  SFAS No. 161. Disclosures about Derivative
    Instruments and Hedging Activities  an Amendment of
    FASB Statement No. 133 Accounting for Derivative Instruments and
    Hedging Activities,
  3.
    Investments  available-for-sale held-for-trading
  Available-For-Sale
    Securities
  available-for-sale
  At March 31, 2009Cost or


Gross


GrossAmortized


Unrealized


UnrealizedCost


Gains


Losses


Fair ValueFixed income securities:United States government and government agencies and authorities

$
81,479


$
21,309


$



$
102,788States, municipalities and political subdivisions


1,143,013



90,424



4,531



1,228,906Other corporate


178,466



7,452



1,615



184,303Total fixed income securities


1,402,958



119,185



6,146



1,515,997Equity securities  common stocks


1,231,087



12,127



255,554



987,660Total
    available-for-sale
    securities

$
2,634,045


$
131,312


$
261,700


$
2,503,657
    9




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  At December 31, 2008Cost or


Gross


GrossAmortized


Unrealized


UnrealizedCost


Gains


Losses


Fair ValueFixed income securities:United States government and government agencies and authorities

$
136,551


$
32,879


$



$
169,430States, municipalities and political subdivisions


1,279,232



54,230



17,997



1,315,465Other corporate


50,331



2,603



4,495



48,439Total fixed income securities


1,466,114



89,712



22,492



1,533,334Equity securities  common stocks


1,106,098



29,422



115,366



1,020,154Total
    available-for-sale
    securities

$
2,572,212


$
119,134


$
137,858


$
2,553,488
     available-for-sale
  March 31, 2009


December 31, 2008Fair


Unrealized


Number of





Unrealized


Number ofValue


Loss


Securities


Fair Value


Loss


SecuritiesFixed income securities:Investment grade:6 months or less

$
100,628


$
2,455



9


$
385,140


$
16,865



277  12 months


54,699



1,985



7



15,462



1,132



3Greater than 12 months


471



91



1











Total investment grade


155,798



4,531



17



400,602



17,997



30Non-investment grade:6 months or less


16,234



1,615



2



36,100



4,495



1Total fixed income securities


172,032



6,146



19



436,702



22,492



31Equity securities:6 months or less


678,038



156,705



23



519,602



115,366



147  12 months


123,646



98,849



3











Total equity securities


801,684



255,554



26



519,602



115,366



14Total securities in an unrealized loss positions

$
973,716


$
261,700



45


$
956,304


$
137,858



45
  10




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
      Unrealized Loss as a Percentage of CostGrossFair




















UnrealizedValue


0-10%


11-20%


21-30%


31-40%


41-50%


>50%


Losses6 months or less

$
678,038


$
1,553


$
70,453


$
42,390


$
25,127


$
17,106


$
76


$
156,7057  12 months


123,646











2,460







96,389







98,849Total equity securities fair value and gross unrealized losses

$
801,684


$
1,553


$
70,453


$
44,850


$
25,127


$
113,495


$
76


$
255,554Number of securities






4



9



7



2



3



1



26
     available-for-sale write-downs,
 11




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  Fixed
    Income Securities Designated as
    Held-for-Trading
  held-for-trading short-term Accounting for Certain Hybrid Financial
    Instruments  an Amendment of FASB Statements Nos. 133
    and 140 held-for-trading
  held-for-trading
  Investments
    at Equity
    Derivatives
    and Other Invested Assets
  Derivative
    Securities
      March 31, 2009


December 31, 2008Notional





Fair Value


Notional





Fair ValueAmount


Cost


Asset


Amount


Cost


AssetCredit default swaps

$
1,464,427


$
21,624


$
61,366


$
3,044,313


$
42,477


$
138,830Eurodollar futures contracts














1,013,000








1Warrants


101,201



10,225



1



101,201



10,225




     1
    
    Eurodollar futures contracts are
    settled daily and therefore had no fair value at
    December 31, 2008. 12




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
   Credit
    Default Swaps
         Three Months EndedMarch 31,2009


2008Credit default swaps

$
32,196


$
153,973SPDRs short-sales






69,515Common stock short-sales






4,861S&P Index call options






(420
)Other1


(342
)


(1,230
)Total realized investment gains

$
31,854


$
226,699
     1
    Other includes warrants and Eurodollar futures contracts. 13




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
     Three Months Ended March 31, 2009CreditDefault


OtherSwaps


Derivatives


TotalRealized gains on disposal

$
88,807


$
(343
)

$
88,464Reversal of mark-to-market gains recognized in prior periods


(60,119
)






(60,119
)Mark-to-market gains recognized in 2009


3,508



1



3,509Net realized investment gains

$
32,196


$
(342
)

$
31,854
   Three Months Ended March 31, 2008Common


S&PCredit





Stock


IndexDefault


SPDRs


Short-


Call


OtherSwaps


Short-Sales


Sales


Options


Derivatives


TotalRealized gains (losses) on disposal

$
123,536


$



$
3,063


$
(1,387
)

$



$
125,212Reversal of mark-to-market (gains) losses recognized in prior
    periods


(91,877
)






(400
)


1,387







(90,890
)Mark-to-market gains (losses) recognized in 2008


122,314



69,515



2,198



(420
)


(1,230
)


192,377Net realized investment gains (losses)

$
153,973


$
69,515


$
4,861


$
(420
)

$
(1,230
)

$
226,699
   Other
    Invested Assets
  The Fair Value Option for Financial
    Assets and Liabilities  Including an Amendment of
    FASB Statement No.
  Regulation S-X.
  Three Months EndedMarch 31, 2009Total revenues

$
56,439Total expenses

$
43,542Income from continuing operations

$
12,897Net income

$
8,840
  14




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##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  Related
    Party Transactions
    4.
    Fair
    Value Disclosures  Fair
    Value Hierarchy
  Fair Value
    Measurements
           15




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
      March 31, 2009Quoted Prices in


Significant Other


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


TotalAssetsAvailable-for-sale fixed income securities

$



$
1,515,997


$



$
1,515,997Held-for-trading fixed income securities






270,390



29,694



300,084Equity securities


957,384



30,276







987,660Derivatives and other invested assets


193,159



71,063







264,222Short-term investments






56,798







56,798Total

$
1,150,543


$
1,944,524


$
29,694


$
3,124,761
   December 31, 2008Quoted Prices in


Significant Other


SignificantActive Markets for


Observable


UnobservableIdentical Assets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


TotalAssetsAvailable-for-sale fixed income securities

$



$
1,533,334


$



$
1,533,334Held-for-trading fixed income securities






167,605



66,393



233,998Equity securities


998,582



21,572







1,020,154Derivatives and other invested assets


262,310



164,064







426,374Short-term investments






549,937







549,937Total

$
1,260,892


$
2,436,512


$
66,393


$
3,763,797
  16




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
    Three Months EndedMarch 31,2009


2008Balance, beginning of period

$
66,393


$
2,500Purchases, issuances and settlements


9,969



Transfers to Level 2


(47,611
)


Realized gains included in net income


943



161Balance, end of period

$
29,694


$
2,661Total gains for the period recognized in earnings attributable
    to the change in unrealized gains or losses relating to assets
    held at period end

$
727


$
161
   Fair
    Value Option
  instrument-by-instrument
       17




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  5.
    Unpaid
    Losses and Loss Adjustment Expenses     Three Months EndedMarch 31,2009


2008Gross unpaid losses and LAE, beginning of period

$
2,987,803


$
3,178,506Less ceded unpaid losses and LAE


684,239



1,197,496Net unpaid losses and LAE, beginning of period


2,303,564



1,981,010Losses and LAE incurred related to:Current period


146,735



196,262Prior years (favorable) adverse development


(10,885
)


13,348Total losses and LAE incurred


135,850



209,610Losses and LAE paid related to:Current period


30,561



27,517Prior years


208,064



130,037Total losses and LAE paid


238,625



157,554Net unpaid losses and LAE, end of period


2,200,789



2,033,066Add ceded unpaid losses and LAE


670,237



1,139,807Gross unpaid losses and LAE, end of period

$
2,871,026


$
3,172,873
       March 31, 2009Ceded unpaid losses and LAE in the table above

$
670,237Reconciling items:Reinsurance recoverable on paid losses and LAE


15,587Retroactive reinsurance recoverable


261,404Total reconciling items


276,991Reinsurance recoverable on the consolidated balance sheet

$
947,228
  18




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  6.
    Asbestos
    and Environmental Losses and Loss Adjustment Expenses    Three Months EndedMarch 31,2009


2008AsbestosGross unpaid losses and allocated LAE (ALAE),
    beginning of period

$
387,224


$
428,139Less ceded unpaid losses and ALAE


85,336



94,497Net unpaid losses and ALAE, beginning of period


301,888



333,642Net losses and ALAE incurred






25,500Net paid losses and ALAE


24,864



8,126Net unpaid losses and ALAE, end of period


277,024



351,016Add ceded unpaid losses and ALAE


95,432



83,178Gross unpaid losses and ALAE, end of period

$
372,456


$
434,194
   Three Months EndedMarch 31,2009


2008EnvironmentalGross unpaid losses and ALAE, beginning of period

$
107,948


$
117,768Less ceded unpaid losses and ALAE


28,969



32,725Net unpaid losses and ALAE, beginning of period


78,979



85,043Net losses and ALAE incurred






Net paid losses and ALAE


1,928



2,410Net unpaid losses and ALAE, end of period


77,051



82,633Add ceded unpaid losses and ALAE


30,466



31,754Gross unpaid losses and ALAE, end of period

$
107,517


$
114,387
    19




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  7.
    Reinsurance    Three Months EndedMarch 31,2009


2008Premiums written:Direct

$
210,899


$
278,049Assumed from other companies, pools and associations


7,326



4,544Ceded to other companies, pools and associations


(37,955
)


(37,940
)Net premiums written

$
180,270


$
244,653Premiums earned:Direct

$
236,552


$
302,887Assumed from other companies, pools and associations


7,672



4,886Ceded to other companies, pools and associations


(36,794
)


(35,963
)Premiums earned

$
207,430


$
271,810
     Three Months Ended March 31,2009


2008Earned premiums ceded to reinsurers

$
(36,794
)

$
(35,963
)Commissions earned on ceded reinsurance premiums


8,254



7,606Claims incurred ceded to reinsurers


23,575



9,255Provision for uncollectible reinsurance


(2,000
)


(2,000
)Net impact of ceded reinsurance transactions

$
(6,965
)

$
(21,102
)
     March 31,


December 31,2009


2008Reinsurance recoverable on unpaid losses and LAE

$
931,641


$
949,364Reinsurance receivable on paid losses and LAE


15,587



18,853Total reinsurance recoverable

$
947,228


$
968,217
    20




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
  Corporate
    Aggregate Reinsurance
      Three Months EndedMarch 31,2009


2008Funds held interest charged to investment income

$
(3,767
)

$
(3,734
)Less: amortization of deferred income on retroactive reinsurance
    included in losses and LAE


(3,721
)


(3,803
)(Decrease) increase in income before income taxes

$
(46
)

$
69
     Three Months EndedMarch 31,2009


2008Decrease in reinsurance recoverable due from reinsurers

$



$
Less: related premiums paid






Decrease in income deferred during the period






Amortization of deferred income


(3,721
)


(3,803
)Decrease in deferred income


(3,721
)


(3,803
)Deferred income on retroactive reinsurance  beginning
    of period


121,277



152,041Deferred income on retroactive reinsurance  end of
    period

$
117,556


$
148,238
     Form 10-K
  8.
    Income
    Taxes   21




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
   9.
    Commitments
    and Contingencies       22




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited, dollars in thousands)
   10.
    Segment
    Reporting    Three Months EndedMarch 31,2009


2008General liability

$
39,529


$
54,032Workers compensation


47,414



57,699Commercial automobile


35,403



53,557Property


30,560



55,990Commercial multi-peril


19,480



20,566Accident and health


28,671



22,923Other1


6,373



7,043Total premiums earned

$
207,430


$
271,810
     1
    
    Other includes surety, homeowners
    and personal automobile lines of business.    Three Months EndedMarch 31,2009


2008Amount


Ratio


Amount


RatioAccident year loss and LAE ratios:General liability

$
27,028



68.4
%

$
40,208



74.4
%Workers compensation


38,669



81.6
%


48,530



84.1
%Commercial automobile


24,755



69.9
%


39,350



73.5
%Property


22,543



73.8
%


36,271



64.8
%Commercial multi-peril


11,343



58.2
%


12,778



62.1
%Accident and health


19,732



68.8
%


15,698



68.5
%Other


2,665



41.8
%


3,427



48.7
%Total accident year losses and LAE


146,735



70.7
%


196,262



72.2
%Prior years loss development


(10,885
)


(5.2
)


13,348



4.9Calendar year losses and LAE

$
135,850



65.5
%

$
209,610



77.1
%
     11.
    Subsequent
    Event   23




---



##### 



ITEM 2.  MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Form 10-K
     Statements
    Regarding Forward-Looking Information
    
    Competitive conditions in the insurance market and the ability
    to attract and retain new business;
    Adverse effect of continuing volatility in the global financial
    markets and current economic downturn;
    Insufficient loss reserves, including reserves for asbestos,
    environmental and other latent claims;
    Occurrence of natural or man-made catastrophic events;
    Inability to realize the Companys investment objectives;
    Inability to obtain reinsurance coverage on reasonable terms and
    prices, particularly property catastrophe reinsurance;
    Exposure to credit risk, in the event reinsurers or
    policyholders fail to pay the Company amounts owed to it;
    Restrictions on the ability of the Companys insurance
    subsidiaries to pay dividends;
    Lowering or loss of one of the Companys financial strength
    ratings;
    Loss of key producers;
    Changes in the business or regulatory environment in which the
    Company operates as a result of recent insurance industry
    investigations by government authorities and other parties;
    SEC requests for information from the Company;
    Exposure to emerging claims and coverage issues;
    Subordination of debt securities to the obligations and
    liabilities of the Companys insurance subsidiaries;
    Ability of Fairfax to determine the outcome of corporate action
    requiring stockholder approval;
    Changes in governmental regulations; and
    Exposure to credit risks on novated policies. 24




---



##### 



Form 10-K Form 10-Q.
  Critical
    Accounting Policies and Estimates
      Form 10-K
  Unpaid
    Losses and Loss Adjustment Expenses
         25




---



##### 



Investments
    , Fair Value
    Measurements
   26




---



##### 



Reinsurance
    Recoverable
         27




---



##### 



Deferred
    Income Tax Assets
    and/or
      Summary
    of Operations
  Overview
     28




---



##### 



29




---



##### 



Market
    Conditions
       30




---



##### 



Results
    of Operations
    Three Months EndedMarch 31,2009


2008Gross premiums written

$
218,225


$
282,593Net premiums written

$
180,270


$
244,653Premiums earned

$
207,430


$
271,810Losses and LAE


135,850



209,610Underwriting expenses


67,437



81,057Underwriting income (loss)


4,143



(18,857
)Investment income and realized investment gains and losses


(55,801
)


171,109Interest and other expense


7,736



9,162(Loss) income before income taxes and equity in earnings of
    investees


(59,394
)


143,090Income tax (benefit) expense


(28,367
)


49,226(Loss) income before equity in earnings of investees


(31,027
)


93,864Equity in earnings (losses) of investees, net of tax


80



(463
)Net (loss) income

$
(30,947
)

$
93,401Loss and LAE ratio


65.5
%


77.1
%Underwriting expense ratio


32.5



29.8Combined ratio


98.0
%


106.9
%        31




---



##### 



Underwriting
    Results
  Gross
    Premiums Written
    Three Months Ended March 31,Increase/


Percent2009


2008


(Decrease)


ChangeGeneral liability

$
52,143


$
63,835


$
(11,692
)


(18.3
)%Workers compensation


50,080



54,718



(4,638
)


(8.5
)%Commercial automobile


27,710



58,234



(30,524
)


(52.4
)%Property


23,459



48,364



(24,905
)


(51.5
)%Commercial multi-peril


19,348



19,453



(105
)


(0.5
)%Accident and health


40,730



33,210



7,520



22.6
%Other1


4,755



4,779



(24
)


(0.5
)%Total gross premiums written

$
218,225


$
282,593


$
(64,368
)


(22.8
)%     1
    
    Other includes surety, homeowners
    and personal automobile lines of business.      Casualty Gross Premiums Written
   32




---



##### 



Property Gross Premiums Written
      Other Gross Premiums Written
    Net
    Premiums Written
    Premiums
    Earned
    Losses
    and Loss Adjustment Expenses
     33




---



##### 



Underwriting
    Expenses
        Investment
    Results
    Three Months EndedMarch 31,2009


2008Average investments, at book
    value1

$
3,861,573


$
4,548,155Investment income

$
35,270


$
15,841Realized investment (losses) gains


(91,071
)


155,268Pre-tax equity in earnings (losses) of investees


123



(712
)Change in unrealized investment gains and losses and foreign
    currency translation


(118,727
)


(13,403
)Total return on investments

$
(174,405
)

$
156,994Annualized total return on investments


(18.1
)%


13.8
%     1
    
    Includes cash and cash equivalents
    and assets pledged for derivatives.     34




---



##### 



Investment Income
    Three Months EndedMarch 31,2009


2008Interest on fixed income securities

$
28,514


$
24,291Dividends from equity securities


12,163



6,908Earnings (losses) from other invested assets


804



(13,680
)Other, primarily interest on cash and cash equivalents


497



9,953Gross investment income


41,978



27,472Interest on funds held under reinsurance contracts


(3,767
)


(5,309
)Investment expenses


(2,941
)


(6,322
)Investment income

$
35,270


$
15,841      Realized Investment Gains and Losses
    Three Months EndedMarch 31,2009


2008Fixed income securities

$
265


$
12,137Equity securities


1,484



Derivatives and short-sale obligations


31,854



226,699Investments at equity and other invested assets


(70,273
)


(42,655
)(36,670
)


196,181Other than temporary impairment charges:Equity securities


(50,894
)


(39,648
)Fixed income securities


(3,507
)


(1,265
)(54,401
)


(40,913
)Total pre-tax net realized investment (losses) gains

$
(91,071
)

$
155,268  35




---



##### 



The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115
  Interest
    and Other Expense
    Liquidity
    and Capital Resources
  Holding
    Company
         36




---



##### 



Insurance
    Subsidiaries
        short-term short-term
   37




---



##### 



Ratings
        ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK       38




---



##### 



Interest
    Rate Risk
    At March 31, 2009


At December 31, 2008Fair Value of








Fair Value ofFixed Income


Hypothetical


Hypothetical


Fixed Income


Hypothetical


Hypothetical(dollars in millions)

Securities


$ Change


% Change


Securities


$ Change


% Change200 basis point decline

$
2,099,846


$
283,765



15.6
%

$
2,106,515


$
339,183



19.2
%100 basis point decline

$
1,961,124


$
145,043



8.0
%

$
1,958,505


$
191,173



10.8
%Base scenario

$
1,816,081










$
1,767,332







100 basis point increase

$
1,641,181


$
(174,900
)


(9.6
)%

$
1,584,304


$
(183,028
)


(10.4
)%200 basis point increase

$
1,486,467


$
(329,614
)


(18.1
)%

$
1,425,703


$
(341,629
)


(19.3
)%    39




---



##### 



Equity
    Price Risk
    Foreign
    Currency Exchange Rate Risk
    ITEM 4T.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Internal
    Control Over Financial Reporting
     40




---



##### 



PART II
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS          ITEM 6.
    EXHIBITS   41




---



##### 



SIGNATURES    CRUM & FORSTER HOLDINGS CORP.
    (Registrant)
  Date: April 30, 2009

By:  /s/  Douglas
    M. LibbyDouglas
    M. Libby
    President and Chief Executive Officer   Date: April 30, 2009

By:  /s/  Mary
    Jane RobertsonMary
    Jane Robertson
    Executive Vice President, Chief
    Financial Officer and Treasurer  42




---



##### 



INDEX TO
    EXHIBITS  Exhibit No.*  31
.1

Certification of President and Chief Executive Officer pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.*  31
.2

Certification of Executive Vice President, Chief Financial
    Officer and Treasurer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.*  32
.1

Certification of President and Chief Executive Officer pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002.*  32
.2

Certification of Executive Vice President, Chief Financial
    Officer and Treasurer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.99
.1

Risk Factors (incorporated into Part II of this
    Form 10-Q
    by reference to the section entitled Risk Factors in
    the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2008 filed with the
    Securities and Exchange Commission on February 27, 2009).     *
    
    Filed herewith 43