FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    (Figures and amounts are in US$ and $ millions except
    per share amounts and as otherwise indicated. Figures may not
    add due to rounding.)
  Notes:  (1)
    Readers of the Managements Discussion and Analysis of
    Financial Condition and Results of Operations should review the
    entire Annual Report for additional commentary and information.
    Additional information relating to the company, including its
    annual information form, can be found on SEDAR at
    www.sedar.com,which can also be accessed from the
    companys website www.fairfax.ca.  (2)
    Management analyzes and assesses the underlying insurance,
    reinsurance and runoff operations and the financial position of
    the consolidated group in various ways. Certain of these
    measures provided in this Annual Report, which have been used
    historically and disclosed regularly in Fairfaxs Annual
    Reports and interim financial reporting, are non-GAAP measures.
    Where non-GAAP measures are provided, descriptions are clearly
    provided in the commentary as to the nature of the adjustments
    made.(3)
    The combined ratio  which may be calculated
    differently by different companies and is calculated by the
    company as the sum of the loss ratio (claims losses and loss
    adjustment expenses expressed as a percentage of net premiums
    earned) and the expense ratio (commissions, premium acquisition
    costs and other underwriting expenses as a percentage of net
    premiums earned)  is the traditional measure of
    underwriting results of property and casualty companies, but is
    regarded as a non-GAAP measure.(4)
    Other non-GAAP measures included in the Capital Resources and
    Management section of this Managements Discussion and
    Analysis of Financial Condition include: net debt divided by
    total equity and non-controlling interests, net debt divided by
    net total capital and total debt divided by total capital. The
    company also calculates an interest coverage ratio as a measure
    of its ability to service its debt.(5)
    References in this MD&A to Fairfaxs insurance and
    reinsurance operations do not include Fairfaxs runoff
    operations.  Sources
    of Revenue
    2009


2008


2007Net premiums earnedInsurance       Canada
    (Northbridge)


969.2



1,076.1



1,017.1 U.S.
    (Crum & Forster)


781.3



1,005.0



1,187.4 Asia
    (Fairfax Asia)


116.0



84.6



68.7Reinsurance  OdysseyRe


1,927.4



2,076.4



2,120.5 Other


628.1



269.6



258.4Runoff






17.4



(3.3
)4,422.0



4,529.1



4,648.8Interest and dividends


712.7



626.4



761.0Net gains on investments


944.5



2,570.7



1,665.9Other revenue


556.4



99.4



434.56,635.6



7,825.6



7,510.2




---



##### 



reinsurance-to-close
  reinsurance-to-close year-over-year year-over-year year-over-year
  non-U.S. operations year-over-year year-over-year
  year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
              Net
    Earnings




---



##### 



2009


2008


2007(1)(2)Combined ratiosInsurance       Canada
    (Northbridge)


105.9
%


103.5
%


96.5
% U.S.
    (Crum & Forster)


104.1
%


117.6
%


93.5
% Asia
    (Fairfax Asia)


82.6
%


91.8
%


70.4
%Reinsurance  OdysseyRe


96.7
%


101.3
%


95.5
% Other


98.1
%


116.6
%


95.8
%Consolidated


99.8
%


106.2
%


94.9
%Sources of net earningsUnderwritingInsurance       Canada
    (Northbridge)


(57.1
)


(37.9
)


36.0 U.S.
    (Crum & Forster)


(32.0
)


(177.2
)


77.0 Asia
    (Fairfax Asia)


20.2



6.9



20.3Reinsurance  OdysseyRe


64.3



(27.7
)


94.7 Other


11.9



(45.0
)


10.9Underwriting income (loss)


7.3



(280.9
)


238.9Interest and dividends  insurance and reinsurance


557.0



476.1



604.4Operating income


564.3



195.2



843.3Net gains on investments  insurance and reinsurance


668.0



1,381.8



1,025.5Runoff


31.2



392.6



187.6Other(3)


12.4



1.4



25.4Interest expense


(166.3
)


(158.6
)


(209.5
)Corporate overhead and other


96.0



631.9



288.1Pre-tax income


1,205.6



2,444.3



2,160.4Income taxes


(214.9
)


(755.6
)


(711.1
)Non-controlling interests


(133.9
)


(214.9
)


(353.5
)Net earnings


856.8



1,473.8



1,095.8   (1)
    
    Excluding the impact in 2008 of Crum &
    Forsters lawsuit settlement in the first quarter and
    Crum & Forsters reinsurance commutation loss in
    the second quarter, the combined ratios in 2008 were 106.7% and
    103.8% for Crum & Forster and Fairfax consolidated
    respectively.(2)
    
    Prior to giving effect to the above-mentioned items affecting
    Crum & Forster and catastrophe losses related to
    Hurricanes Ike and Gustav, the Fairfax consolidated combined
    ratio in 2008 was 96.5%.(3)
    
    Other comprises the pre-tax income before interest and other
    of the Ridley animal nutrition business for the years ended
    December 31, 2009 and 2008 and the Cunningham Lindsey
    claims adjusting business for the year ended December 31,
    2007.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
            year-over-year




---



##### 



Net
    Earnings by Business Segment
    Year
    ended December 31, 2009
  Crum &

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,250.5


863.8


285.8


2,195.0


688.3


5,283.4


1.1





(190.5)





5,094.0Net premiums written


928.7


716.4


127.9


1,893.8


619.8


4,286.6


(0.5)











4,286.1Net premiums earned


969.2


781.3


116.0


1,927.4


628.1


4,422.0














4,422.0Underwriting profit (loss)


(57.1)


(32.0)


20.2


64.3


11.9


7.3














7.3Interest and dividends


113.0


113.9


9.0


283.6


37.5


557.0














557.0Operating income before:


55.9


81.9


29.2


347.9


49.4


564.3














564.3Net gains (losses) on investments


94.4


229.1


17.8


353.6


(25.8)


669.1


129.2





(1.1)





797.2Runoff operating loss




















(98.0)











(98.0)Other(1)























12.4








12.4Interest expense





(27.8)





(31.0)


(5.1)


(63.9)





(1.0)





(101.4)


(166.3)Corporate overhead and other


(19.8)


(3.3)


(2.3)


(25.8)


(13.1)


(64.3)











160.3


96.0Pre-tax income (loss)


130.5


279.9


44.7


644.7


5.4


1,105.2


31.2


11.4


(1.1)


58.9


1,205.6Income taxes
































(214.9)Non-controlling interests
































(133.9)Net earnings
































856.8   Year
    ended December 31, 2008
  Crum &

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,452.1


1,019.6


227.0


2,294.5


245.8


5,239.0


12.6





(190.2)





5,061.4Net premiums written


1,099.5


878.2


86.5


2,030.8


226.1


4,321.1


11.1











4,332.2Net premiums earned


1,076.1


1,005.0


84.6


2,076.4


269.6


4,511.7


17.4











4,529.1Underwriting profit (loss)


(37.9)


(177.2)


6.9


(27.7)


(45.0)


(280.9)














(280.9)Interest and dividends


107.9


86.2


1.6


250.3


30.1


476.1














476.1Operating income (loss) before:


70.0


(91.0)


8.5


222.6


(14.9)


195.2














195.2Net gains (losses) on investments


25.7


605.7


3.0


740.1


28.1


1,402.6


499.8





(20.8)





1,881.6Runoff operating loss




















(107.2)











(107.2)Other(1)























1.4








1.4Interest expense





(28.3)





(34.2)


(2.6)


(65.1)





(0.4)





(93.1)


(158.6)Corporate overhead and other


(14.5)


(8.8)


(5.5)


(13.9)


(1.9)


(44.6)











676.5


631.9Pre-tax income (loss)


81.2


477.6


6.0


914.6


8.7


1,488.1


392.6


1.0


(20.8)


583.4


2,444.3Income taxes
































(755.6)Non-controlling interests
































(214.9)Net earnings
































1,473.8




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Year
    ended December 31, 2007
  Crum &

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,531.3


1,245.0


171.2


2,282.7


250.2


5,480.4


8.0





(273.9)





5,214.5Net premiums written


996.8


1,100.9


70.5


2,089.4


251.2


4,508.8


(10.4)











4,498.4Net premiums earned


1,017.1


1,187.4


68.7


2,120.5


258.4


4,652.1


(3.3)











4,648.8Underwriting profit


36.0


77.0


20.3


94.7


10.9


238.9














238.9Interest and dividends


119.2


133.4


17.4


309.3


25.1


604.4














604.4Operating income before:


155.2


210.4


37.7


404.0


36.0


843.3














843.3Net gains (losses) on investments


230.2


250.3





553.4


8.9


1,042.8


276.8





(17.3)





1,302.3Runoff operating loss




















(89.2)











(89.2)Other(1)























25.4








25.4Interest expense





(51.0)





(37.7)





(88.7)





(15.7)





(105.1)


(209.5)Corporate overhead and other


(12.4)


(9.6)


(3.5)


(12.6)





(38.1)











326.2


288.1Pre-tax income (loss)


373.0


400.1


34.2


907.1


44.9


1,759.3


187.6


9.7


(17.3)


221.1


2,160.4Income taxes
































(711.1)Non-controlling interests
































(353.5)Net earnings
































1,095.8   (1)
    
    Other comprises the pre-tax income of the Ridley animal
    nutrition business for the years ended December 31, 2009
    and 2008 and the Cunningham Lindsey claims adjusting business
    for the year ended December 31, 2007.  Segmented
    Balance Sheets
    (a)
    The balance sheet for each segment is on a legal entity basis
    for the subsidiaries within the segment (except for nSpire Re in
    Runoff, which excludes intercompany balances related to
    U.S. acquisition financing), prepared in accordance with
    Canadian GAAP and Fairfaxs accounting policies and basis
    of accounting. Accordingly, these segmented balance sheets
    differ from those published by Crum & Forster and
    OdysseyRe primarily due to differences between Canadian and US
    GAAP and from those published by Advent primarily due to
    differences between Canadian GAAP and IFRS as adopted by the
    European Union. The segmented balance sheets of Northbridge,
    OdysseyRe, Advent and Other (Ridley) also include purchase price
    adjustments principally related to goodwill and intangible
    assets which arose on their initial acquisition or on a
    subsequent step acquisition by the company.(b)
    Investments in Fairfax affiliates, which are carried at cost,
    are disclosed in the financial information accompanying the
    discussion of the companys business segments. Affiliated
    insurance and reinsurance balances, including premiums
    receivable, reinsurance recoverable, deferred premium
    acquisition costs, funds withheld payable to reinsurers,
    provision for claims and unearned premiums, are not shown
    separately but are eliminated in Corporate and Other.(c)
    Corporate and Other includes the Fairfax entity and its
    subsidiary intermediate holding companies as well as the
    consolidating and eliminating entries required under Canadian
    GAAP to prepare consolidated financial statements. The most
    significant of those entries are derived from the elimination of
    intercompany reinsurance (primarily consisting of reinsurance
    provided by Group Re, reinsurance between OdysseyRe and the
    primary insurers, and reinsurance related to pre-acquisition
    reinsurance arrangements), which affects recoverable from
    reinsurers, provision for claims and unearned premiums. The
    $1,412.4 (2008  $1,060.6) Corporate and Other long
    term debt as at December 31, 2009 consisted primarily of
    Fairfax debt of $1,236.9 (2008  $869.6), other long
    term obligations consisting of TIG trust preferred securities of
    $9.1 (2008  $17.9) and purchase consideration payable
    of $164.4 (2008  $169.8) related to the TRG
    acquisition (see note 9 to the consolidated financial
    statements).




---



##### 



Segmented
    Balance Sheet as at December 31, 2009
  Insurance


ReinsuranceCrum &


Fairfax








Operating








CorporateNorthbridge


Forster


Asia


OdysseyRe


Other


Companies


Runoff


Other(1)


& Other


ConsolidatedAssetsHolding company cash, short term 
    investments and marketable securities


27.4



2.5







83.0







112.9











1,138.7



1,251.6Accounts receivable and other


395.4



206.2



54.6



733.9



158.6



1,548.7



228.3



39.2



39.2



1,855.4Recoverable from reinsurers


1,130.5



927.3



170.3



1,025.0



88.9



3,342.0



1,378.0







(910.9
)


3,809.1Portfolio investments


3,186.6



3,639.1



554.4



8,433.8



1,602.2



17,416.1



2,413.8



1.6



247.1



20,078.6Deferred premium acquisition costs


122.4



45.7



13.5



126.5



24.2



332.3















332.3Future income taxes


18.4



72.8







93.4



29.9



214.5



552.7



1.0



(449.5
)


318.7Premises and equipment


12.1



6.9



7.5



11.5



2.0



40.0



1.4



87.3



39.9



168.6Goodwill and intangible assets


219.8



20.9



5.5



152.4



18.7



417.3







21.9



(0.4
)


438.8Due from affiliates


78.7







1.8







9.2



89.7



4.8







(94.5
)


Other assets


10.9



13.8







33.2



1.2



59.1



25.1



54.1



11.4



149.7Investments in Fairfax affiliates


33.0



104.5







138.5



69.1



345.1



309.6







(654.7
)


Total assets


5,235.2



5,039.7



807.6



10,831.2



2,004.0



23,917.7



4,913.7



205.1



(633.7
)


28,402.8LiabilitiesSubsidiary indebtedness






























12.1







12.1Accounts payable and accrued liabilities


166.2



147.8



105.1



399.1



25.9



844.1



177.2



45.5



135.4



1,202.2Income taxes payable


10.0



11.1



7.5



31.5







60.1



0.3



0.1



10.4



70.9Short sale and derivative obligations














40.8







40.8



7.2



0.3



8.9



57.2Due to affiliates






1.5







13.0



0.3



14.8











(14.8
)


Funds withheld payable to reinsurers


30.6



248.2



25.0



43.8



21.2



368.8



21.3







(35.2
)


354.9Provision for claims


2,802.2



2,672.4



218.0



5,507.8



1,090.8



12,291.2



3,265.7







(809.8
)


14,747.1Unearned premiums


713.8



297.8



116.6



691.2



196.2



2,015.6











(95.5
)


1,920.1Future income taxes payable


1.7







3.6







2.0



7.3







22.8



(30.1
)


Long term debt






307.5







487.0



94.2



888.7







0.6



1,412.4



2,301.7Total liabilities


3,724.5



3,686.3



475.8



7,214.2



1,430.6



16,531.4



3,471.7



81.4



581.7



20,666.2Non-controlling interests










4.0











4.0











113.6



117.6Shareholders equity


1,510.7



1,353.4



327.8



3,617.0



573.4



7,382.3



1,442.0



123.7



(1,329.0
)


7,619.0Total liabilities and shareholders equity


5,235.2



5,039.7



807.6



10,831.2



2,004.0



23,917.7



4,913.7



205.1



(633.7
)


28,402.8CapitalDebt






307.5







487.0



94.2



888.7







0.6



1,412.4



2,301.7Non-controlling interests














69.1







69.1







44.5



4.0



117.6Investments in Fairfax affiliates


33.0



104.5







138.5



69.1



345.1



309.6







(654.7
)


Shareholders equity


1,477.7



1,248.9



327.8



3,409.4



504.3



6,968.1



1,132.4



79.2



(560.7
)


7,619.0Total capital


1,510.7



1,660.9



327.8



4,104.0



667.6



8,271.0



1,442.0



124.3



201.0



10,038.3% of total capital


15.0
%


16.5
%


3.3
%


40.9
%


6.7
%


82.4
%


14.4
%


1.2
%


2.0
%


100.0
%   (1)
    
    Other comprises the balance sheet of the Ridley animal
    nutrition business as at December 31, 2009.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Segmented
    Balance Sheet as at December 31, 2008
  Insurance


ReinsuranceCrum &


Fairfax








Operating








CorporateNorthbridge


Forster


Asia


OdysseyRe


Other


Companies


Runoff


Other(1)


& Other


ConsolidatedAssetsHolding company cash, short term investments and marketable
    securities






8.4















8.4











1,555.8



1,564.2Accounts receivable and other


373.8



221.8



56.5



701.3



122.0



1,475.4



142.7



45.2



25.4



1,688.7Recoverable from reinsurers


1,053.3



1,006.7



156.4



868.0



93.4



3,177.8



1,927.8







(871.4
)


4,234.2Portfolio investments


2,748.5



3,741.0



421.1



7,743.8



1,191.3



15,845.7



2,478.1



6.2



85.0



18,415.0Deferred premium acquisition costs


113.6



52.7







139.1



17.7



323.1



0.1







(1.3
)


321.9Future income taxes


32.4



197.8







304.4



30.3



564.9



637.7



4.7



(507.9
)


699.4Premises and equipment


10.7



6.2



1.2



10.7



0.7



29.5



2.2



85.6



15.8



133.1Goodwill and intangible assets


18.5



22.9



5.5



48.2



3.9



99.0



0.1



25.3



(1.2
)


123.2Due from affiliates






0.7



1.1







0.9



2.7











(2.7
)


Other assets


4.2



11.4







20.9



2.3



38.8



20.5



60.8



5.6



125.7Investments in Fairfax affiliates


28.2



94.3







124.7



75.9



323.1



274.4







(597.5
)


Total assets


4,383.2



5,363.9



641.8



9,961.1



1,538.4



21,888.4



5,483.6



227.8



(294.4
)


27,305.4LiabilitiesSubsidiary indebtedness






























21.1







21.1Accounts payable and accrued liabilities


141.7



254.8



89.1



398.3



11.8



895.7



243.3



59.4



128.1



1,326.5Income taxes payable






165.6



6.0



238.1







409.7



2.5







244.1



656.3Short sale and derivative obligations














8.6







8.6



11.6







9.2



29.4Due to affiliates


0.1











0.6







0.7



5.3







(6.0
)


Funds withheld payable to reinsurers


30.7



231.6



21.6



58.0



28.8



370.7



20.7







(36.3
)


355.1Provision for claims


2,414.2



2,987.7



179.6



5,250.5



856.5



11,688.5



3,806.2







(766.3
)


14,728.4Unearned premiums


669.8



366.4



92.8



702.0



153.5



1,984.5



0.4







(94.3
)


1,890.6Future income taxes payable


2.8



















2.8







28.6



(31.4
)


Long term debt






305.2







486.5



93.4



885.1







0.7



1,060.6



1,946.4Total liabilities


3,259.3



4,311.3



389.1



7,142.6



1,144.0



16,246.3



4,090.0



109.8



507.7



20,953.8Non-controlling interests










2.7











2.7











1,380.1



1,382.8Shareholders equity


1,123.9



1,052.6



250.0



2,818.5



394.4



5,639.4



1,393.6



118.0



(2,182.2
)


4,968.8Total liabilities and shareholders equity


4,383.2



5,363.9



641.8



9,961.1



1,538.4



21,888.4



5,483.6



227.8



(294.4
)


27,305.4CapitalDebt






305.2







486.5



93.4



885.1







0.7



1,060.6



1,946.4Non-controlling interests


394.1











896.8



40.2



1,331.1







49.0



2.7



1,382.8Investments in Fairfax affiliates


28.2



94.3







124.7



75.9



323.1



274.4







(597.5
)


Shareholders equity


701.6



958.3



250.0



1,797.0



278.3



3,985.2



1,119.2



69.0



(204.6
)


4,968.8Total capital


1,123.9



1,357.8



250.0



3,305.0



487.8



6,524.5



1,393.6



118.7



261.2



8,298.0% of total capital


13.5
%


16.4
%


3.0
%


39.8
%


5.9
%


78.6
%


16.8
%


1.4
%


3.2
%


100.0
%   (1)
    
    Other comprises the balance sheet of the Ridley animal
    nutrition business as at December 31, 2008.  Holding company cash, short term investments and marketable
    securities




---



##### 



start-up
  Accounts receivable and other
  Reinsurance recoverables
  Future income taxes




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Portfolio investments
  Goodwill and intangible assets
  Provision for claims
  Non-controlling interests
  Components
    of Net Earnings
  Underwriting
    and Operating Income
  company-by-company




---



##### 



Canadian
    Insurance 
    Northbridge(1)
  2009


2008


2007Underwriting profit (loss)


(57.1
)


(37.9
)


36.0Combined ratioLoss & LAE


75.7
%


75.2
%


68.4
%Commissions


11.8
%


10.7
%


8.3
%Underwriting expense


18.4
%


17.6
%


19.8
%105.9
%


103.5
%


96.5
%Gross premiums written


1,250.5



1,452.1



1,531.3Net premiums written


928.7



1,099.5



996.8Net premiums earned


969.2



1,076.1



1,017.1Underwriting profit (loss)


(57.1
)


(37.9
)


36.0Interest and dividends


113.0



107.9



119.2Operating income


55.9



70.0



155.2Net gains on investments


94.4



25.7



230.2Pre-tax income before interest and other


150.3



95.7



385.4Net income after taxes


91.8



45.7



273.3    (1)
    
    These results differ from the standalone results of
    Northbridge primarily due to purchase accounting adjustments
    recorded by Fairfax related to the privatization of Northbridge.
    Excluding these purchase price adjustments, Northbridges
    2009 underwriting loss and combined ratio were $51.7 and 105.3%
    respectively.  small-to-medium year-over-year small-to-medium
  year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



2009


2008AssetsHolding company cash, short term investments and marketable
    securities


27.4



Accounts receivable and other


395.4



373.8Recoverable from reinsurers


1,130.5



1,053.3Portfolio investments


3,186.6



2,748.5Deferred premium acquisition costs


122.4



113.6Future income taxes


18.4



32.4Premises and equipment


12.1



10.7Goodwill and intangible assets


219.8



18.5Due from affiliates


78.7



Other assets


10.9



4.2Investment in Fairfax affiliates


33.0



28.2Total assets


5,235.2



4,383.2LiabilitiesAccounts payable and accrued liabilities


166.2



141.7Income taxes payable


10.0



Due to affiliates






0.1Funds withheld payable to reinsurers


30.6



30.7Provision for claims


2,802.2



2,414.2Unearned premiums


713.8



669.8Future income taxes payable


1.7



2.8Total liabilities


3,724.5



3,259.3Shareholders equity


1,510.7



1,123.9Total liabilities and shareholders equity


5,235.2



4,383.2   (1)
    
    This balance sheet differs from the standalone balance sheet
    of Northbridge primarily due to purchase accounting adjustments
    (principally goodwill and intangible assets) which arose on the
    privatization of Northbridge. Excluding these purchase
    accounting adjustments, Northbridges shareholders
    equity was $1,345.8 at December 31, 2009.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Affiliate

% interestRidley


30.7   U.S.
    Insurance  Crum &
    Forster(1)
  2009


2008


2007Underwriting profit (loss)


(32.0
)


(177.2
)


77.0Combined ratioLoss & LAE


69.2
%


85.8
%


64.9
%Commissions


11.8
%


12.0
%


12.0
%Underwriting expense


23.1
%


19.8
%


16.6
%104.1
%


117.6
%


93.5
%Gross premiums written


863.8



1,019.6



1,245.0Net premiums written


716.4



878.2



1,100.9Net premiums earned


781.3



1,005.0



1,187.4Underwriting profit (loss)


(32.0
)


(177.2
)


77.0Interest and dividends


113.9



86.2



133.4Operating income (loss)


81.9



(91.0
)


210.4Net gains on investments


229.1



605.7



250.3Pre-tax income before interest and other


311.0



514.7



460.7Net income after taxes


212.7



315.1



267.3    (1)
    
    These results differ from those published by Crum &
    Forster Holdings Corp., primarily due to differences between
    Canadian and US GAAP.  year-over-year




---



##### 



year-over-year year-over-year
  year-over-year year-over-year year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    year-over-year
      2009


2008AssetsHolding company cash, short term investments and marketable
    securities


2.5



8.4Accounts receivable and other


206.2



221.8Recoverable from reinsurers


927.3



1,006.7Portfolio investments


3,639.1



3,741.0Deferred premium acquisition costs


45.7



52.7Future income taxes


72.8



197.8Premises and equipment


6.9



6.2Goodwill and intangible assets


20.9



22.9Due from affiliates






0.7Other assets


13.8



11.4Investments in Fairfax affiliates


104.5



94.3Total assets


5,039.7



5,363.9LiabilitiesAccounts payable and accrued liabilities


147.8



254.8Income taxes payable


11.1



165.6Due to affiliates


1.5



Funds withheld payable to reinsurers


248.2



231.6Provision for claims


2,672.4



2,987.7Unearned premiums


297.8



366.4Long term debt


307.5



305.2Total liabilities


3,686.3



4,311.3Shareholders equity


1,353.4



1,052.6Total liabilities and shareholders equity


5,039.7



5,363.9   (1)
    
    These balance sheets differ from those published by
    Crum & Forster Holdings Corp., primarily due to
    differences between Canadian and US GAAP.




---



##### 



Affiliate

% interestTRG Holdings


1.4Advent


17.5OdysseyRe


8.8   10-K www.cfins.com.
  Asian
    Insurance  Fairfax Asia
  2009


2008


2007Underwriting profit


20.2



6.9



20.3Combined ratioLoss & LAE


73.1
%


81.5
%


56.3
%Commissions


(1.7
)%


(6.6
)%


(3.2
)%Underwriting expense


11.2
%


16.9
%


17.3
%82.6
%


91.8
%


70.4
%Gross premiums written


285.8



227.0



171.2Net premiums written


127.9



86.5



70.5Net premiums earned


116.0



84.6



68.7Underwriting profit


20.2



6.9



20.3Interest and dividends


9.0



1.6



17.4Operating income


29.2



8.5



37.7Net gains on investments


17.8



3.0



Pre-tax income before interest and other


47.0



11.5



37.7Net income after taxes


38.3



0.9



28.7




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
          (www.icicilombard.com)




---



##### 



2009


2008AssetsAccounts receivable and other


54.6



56.5Recoverable from reinsurers


170.3



156.4Portfolio investments


554.4



421.1Deferred premium acquisition costs


13.5



Premises and equipment


7.5



1.2Goodwill and intangible assets


5.5



5.5Due from affiliates


1.8



1.1Total assets


807.6



641.8LiabilitiesAccounts payable and accrued liabilities


105.1



89.1Income taxes payable


7.5



6.0Funds withheld payable to reinsurers


25.0



21.6Provision for claims


218.0



179.6Unearned premiums


116.6



92.8Future income taxes payable


3.6



Total liabilities


475.8



389.1Non-controlling interests


4.0



2.7Shareholders equity


327.8



250.0Total liabilities and shareholders equity


807.6



641.8     Reinsurance 
    OdysseyRe(1)
  2009


2008


2007Underwriting profit (loss)


64.3



(27.7
)


94.7Combined ratioLoss & LAE


67.6
%


72.7
%


66.4
%Commissions


19.5
%


20.1
%


20.6
%Underwriting expense


9.6
%


8.5
%


8.5
%96.7
%


101.3
%


95.5
%Gross premiums written


2,195.0



2,294.5



2,282.7Net premiums written


1,893.8



2,030.8



2,089.4Net premiums earned


1,927.4



2,076.4



2,120.5Underwriting profit (loss)


64.3



(27.7
)


94.7Interest and dividends


283.6



250.3



309.3Operating income


347.9



222.6



404.0Net gains on investments


353.6



740.1



553.4Pre-tax income before interest and other


701.5



962.7



957.4Net income after taxes


486.9



613.9



596.0   (1)
    
    These results differ from those published by Odyssey Re
    Holdings Corp. primarily due to differences between Canadian and
    US GAAP and due to purchase accounting adjustments recorded by
    Fairfax related to the privatization of OdysseyRe.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
         year-over-year




---



##### 



2009


2008AssetsHolding company cash, short term investments and marketable
    securities


83.0



Accounts receivable and other


733.9



701.3Recoverable from reinsurers


1,025.0



868.0Portfolio investments


8,433.8



7,743.8Deferred premium acquisition costs


126.5



139.1Future income taxes


93.4



304.4Premises and equipment


11.5



10.7Goodwill and intangible assets


152.4



48.2Other assets


33.2



20.9Investments in Fairfax affiliates


138.5



124.7Total assets


10,831.2



9,961.1LiabilitiesAccounts payable and accrued liabilities


399.1



398.3Income taxes payable


31.5



238.1Short sale and derivative obligations


40.8



8.6Due to affiliates


13.0



0.6Funds withheld payable to reinsurers


43.8



58.0Provision for claims


5,507.8



5,250.5Unearned premiums


691.2



702.0Long term debt


487.0



486.5Total liabilities


7,214.2



7,142.6Shareholders equity


3,617.0



2,818.5Total liabilities and shareholders equity


10,831.2



9,961.1   (1)
    
    These balance sheets differ from those published by Odyssey
    Re Holdings Corp. primarily due to differences between Canadian
    and US GAAP and purchase accounting adjustments (principally
    goodwill and intangible assets) which arose on the privatization
    of OdysseyRe. Excluding these purchase accounting adjustments,
    OdysseyRes Canadian GAAP shareholders equity was
    $3,512.6 at December 31, 2009.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
         Affiliate

% interestTRG Holdings


13.0Fairfax Asia


26.2Advent


21.7   10-K www.odysseyre.com.
  Reinsurance 
    Other




---



##### 



2009


2008


2007Inter-Group Re


Advent(1)


Polish
    Re(2)


company


Total


Group Re


Advent(1)


Total


Group ReUnderwriting profit (loss)


(10.3
)


21.6



0.6







11.9



(22.7
)


(22.3
)


(45.0
)


10.9Combined ratioLoss & LAE


77.5
%


71.2
%


76.3
%






74.4
%


79.3
%


96.3
%


84.3
%


54.6
%Commissions


25.2
%


14.1
%


18.4
%






19.2
%


30.6
%


23.8
%


28.6
%


39.1
%Underwriting expense


1.3
%


7.2
%


4.5
%






4.5
%


2.0
%


8.1
%


3.7
%


2.1
%104.0
%


92.5
%


99.2
%






98.1
%


111.9
%


128.2
%


116.6
%


95.8
%Gross premiums written


263.7



386.1



88.4



(49.9
)


688.3



185.4



60.4



245.8



250.2Net premiums written


263.7



277.0



79.1







619.8



185.5



40.6



226.1



251.2Net premiums earned


255.2



289.6



83.3







628.1



190.8



78.8



269.6



258.4Underwriting profit (loss)


(10.3
)


21.6



0.6







11.9



(22.7
)


(22.3
)


(45.0
)


10.9Interest and dividends


15.6



17.8



4.1







37.5



22.4



7.7



30.1



25.1Operating income (loss)


5.3



39.4



4.7







49.4



(0.3
)


(14.6
)


(14.9
)


36.0Net gains (losses) on investments


(22.5
)


(11.0
)


7.7







(25.8
)


40.5



(12.4
)


28.1



8.9Pre-tax income (loss) before interest and other


(17.2
)


28.4



12.4







23.6



40.2



(27.0
)


13.2



44.9Net income (loss) after taxes


(14.2
)


6.7



11.3







3.8



49.2



(20.2
)


29.0



44.9   (1)
    
    These results differ from those published by Advent primarily
    due to differences in classification between Canadian GAAP and
    IFRS.(2)
    
    These results differ from those published by Polish Re
    primarily due to differences between Canadian and Polish
    GAAP.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    reinsurance-to-close
  year-over-year
  start-up
    2009


2008Inter-Group Re


Advent(1)


Polish
    Re(2)


company


Total


Group Re


Advent(1)


TotalAssetsAccounts receivable and other


53.9



105.9



15.6



(16.8
)


158.6



28.4



93.6



122.0Recoverable from reinsurers


0.4



99.9



14.6



(26.0
)


88.9



0.4



93.0



93.4Portfolio investments


821.0



638.9



142.3







1,602.2



655.6



535.7



1,191.3Deferred premium acquisition costs


3.9



13.5



6.8







24.2



3.1



14.6



17.7Future income taxes






29.9











29.9







30.3



30.3Premises and equipment






0.4



1.6







2.0







0.7



0.7Goodwill and intangible assets






4.3



14.4







18.7







3.9



3.9Due from affiliates


9.2















9.2



0.9







0.9Other assets






1.2











1.2







2.3



2.3Investments in Fairfax affiliates


69.1















69.1



75.9







75.9Total assets


957.5



894.0



195.3



(42.8
)


2,004.0



764.3



774.1



1,538.4LiabilitiesAccounts payable and accrued liabilities


0.6



18.5



6.8







25.9







11.8



11.8Due to affiliates










0.3







0.3











Funds withheld payable to reinsurers






39.2



0.1



(18.1
)


21.2



0.2



28.6



28.8Provision for claims


509.6



520.1



78.1



(17.0
)


1,090.8



404.4



452.1



856.5Unearned premiums


114.6



63.0



26.3



(7.7
)


196.2



91.6



61.9



153.5Future income taxes payable










2.0







2.0











Long term debt






94.2











94.2







93.4



93.4Total liabilities


624.8



735.0



113.6



(42.8
)


1,430.6



496.2



647.8



1,144.0Shareholders equity


332.7



159.0



81.7







573.4



268.1



126.3



394.4Total liabilities and shareholders equity


957.5



894.0



195.3



(42.8
)


2,004.0



764.3



774.1



1,538.4   (1)
    
    This balance sheet differs from that published by Advent
    primarily due to differences in classification between Canadian
    GAAP and IFRS and purchase accounting adjustments (principally
    goodwill) which arose on the privatization of Advent. Excluding
    these purchase accounting adjustments, Advents Canadian
    GAAP shareholders equity was $165.6 at December 31,
    2009.(2)
    
    This balance sheet differs from that published by Polish Re
    primarily due to differences between Canadian and Polish GAAP
    and purchase accounting adjustments (principally goodwill and
    intangible assets) which arose on the acquisition of Polish Re.
    Excluding these purchase accounting adjustments, Polish
    Res Canadian GAAP shareholders equity was $63.0 at
    December 31, 2009.




---



##### 



Affiliate

% interestNorthbridge


1.5Advent


18.8Ridley


25.1   Runoff
      2009


2008


2007Gross premiums written


1.1



12.6



8.0Net premiums written


(0.5
)


11.1



(10.4
)Net premiums earned






17.4



(3.3
)Losses on claims


(57.6
)


(83.2
)


(107.2
)Operating expenses


(94.8
)


(109.6
)


(70.3
)Interest and dividends


54.4



68.2



91.6Operating loss


(98.0
)


(107.2
)


(89.2
)Net gains on investments


129.2



499.8



276.8Pre-tax income before interest and other


31.2



392.6



187.6




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



2009


2008AssetsAccounts receivable and other


228.3



142.7Recoverable from reinsurers


1,378.0



1,927.8Portfolio investments


2,413.8



2,478.1Deferred premium acquisition costs






0.1Future income taxes


552.7



637.7Premises and equipment


1.4



2.2Goodwill and intangible assets






0.1Due from affiliates


4.8



Other assets


25.1



20.5Investments in Fairfax affiliates


309.6



274.4Total assets


4,913.7



5,483.6LiabilitiesAccounts payable and accrued liabilities


177.2



243.3Income taxes payable


0.3



2.5Short sale and derivative obligations


7.2



11.6Due to affiliates






5.3Funds withheld payable to reinsurers


21.3



20.7Provision for claims


3,265.7



3,806.2Unearned premiums






0.4Total liabilities


3,471.7



4,090.0Shareholders equity


1,442.0



1,393.6Total liabilities and shareholders equity


4,913.7



5,483.6




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Affiliate

% interestOdysseyRe


19.0Northbridge


16.4Advent


20.8TRG Holdings


8.0   Other(1)
  2009


2008


2007Revenue


556.4



99.4



434.5Costs and expenses


(544.0
)


(98.0
)


(401.5
)Operating income


12.4



1.4



33.0Net losses on investments










(7.6
)Pre-tax income before interest and other


12.4



1.4



25.4Interest expense


(1.0
)


(0.4
)


(15.7
)Pre-tax income


11.4



1.0



9.7   (1)
    
    These results differ from those published by Ridley Inc.
    primarily due to purchase accounting adjustments recorded by
    Fairfax related to the acquisition of Ridley.




---



##### 



2009


2008AssetsAccounts receivable and other


39.2



45.2Portfolio investments


1.6



6.2Future income taxes


1.0



4.7Premises and equipment


87.3



85.6Goodwill and intangible assets


21.9



25.3Other assets


54.1



60.8Total assets


205.1



227.8LiabilitiesSubsidiary indebtedness


12.1



21.1Accounts payable and accrued liabilities


45.5



59.4Income taxes payable


0.1



Short sale and derivative obligations


0.3



Future income taxes payable


22.8



28.6Long term debt


0.6



0.7Total liabilities


81.4



109.8Shareholders equity


123.7



118.0Total liabilities and shareholders equity


205.1



227.8   Interest
    and Dividends
        year-over-year
  Net Gains
    on Investments




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
            mark-to-market




---



##### 



Excess of saleproceeds overNotional


Original


Sale


originalamount


acquisition cost


proceeds


acquisition costFY 2007


965.5



25.7



199.3



173.6FY 2008


11,629.8



245.8



2,048.7



1,802.9FY 2009


3,042.9



46.9



231.6



184.7Cumulative sales since inception


15,638.2



318.4



2,479.6



2,161.2Remaining credit default swap positions at December 31, 2009


5,926.2



114.8



71.6
(1)


(43.2
)(2)Cumulative realized and unrealized from inception


21,564.4



433.2



2,551.2



2,118.0   (1)
    
    Market value as of December 31, 2009(2)
    
    Unrealized gain (measured using original acquisition cost) as
    of December 31, 2009      Interest
    Expense
    year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      2009


2008


2007Fairfax


101.4



89.1



105.1Crum & Forster


27.8



28.3



29.8Crum & Forster debt offering and tender offer costs










21.2OdysseyRe


31.0



34.2



37.7Cunningham Lindsey






4.0



15.7Advent


5.1



2.6



Ridley


1.0



0.4



166.3



158.6



209.5   Corporate
    Overhead and Other
    2009


2008


2007Fairfax corporate overhead


88.3



94.7



110.0Subsidiary holding companies corporate overhead


64.3



44.6



38.1Holding company interest and dividends


(36.4
)


(28.8
)


(19.3
)Holding company net gains on investments


(147.3
)


(689.1
)


(371.2
)Investment management and administration fees


(64.9
)


(53.3
)


(45.7
)(96.0
)


(631.9
)


(288.1
)     year-over-year




---



##### 



Income
    Taxes
        Non-controlling
    Interests
    2009


2008


2007OdysseyRe


130.1



209.9



241.0Northbridge


2.7



18.4



111.0Ridley


0.3



0.2



Advent


0.8



(13.6
)


Cunningham Lindsey










1.5133.9



214.9



353.5




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Provision
    for Claims




---



##### 



Favourable/(Unfavourable)2009


2008Insurance      Canada
    (Northbridge)


14.1



63.3 U.S.
    (Crum & Forster)


25.0



25.2 Asia
    (Fairfax Asia)


8.1



(3.4
)Reinsurance  OdysseyRe


11.3



10.1 Other


(31.2
)


(2.3
)Insurance and reinsurance operating companies


27.3



92.9Runoff


(57.6
)


(64.1
)Crum & Forster reinsurance commutation






(84.2
)Net reserve development


(30.3
)


(55.4
)     Reconciliation of Provision for Claims and LAE as at December
    31
  2009


2008


2007


2006


2005Total insurance subsidiaries


3,810.4



3,716.3



3,478.3



3,184.0



3,037.3Reinsurance subsidiaries owned throughout the
    year(1)


5,629.6



4,964.3



5,051.5



4,986.7



4,527.0Reinsurance subsidiaries acquired during the
    year(2)


68.4



372.9











Total reinsurance subsidiaries


5,698.0



5,337.2



5,051.5



4,986.7



4,527.0Runoff subsidiaries owned throughout the year


1,956.7



1,989.9



2,116.5



2,487.9



1,759.7Runoff subsidiaries acquired during the
    year(3)


















38.2Total runoff subsidiaries


1,956.7



1,989.9



2,116.5



2.487.9



1,797.9Net provision for claims and LAE


11,465.1



11,043.4



10,646.3



10,658.6



9,362.2Reinsurance
    gross-up


3,282.0



3,685.0



4,401.8



4,843.7



6,872.9Gross provision for claims and LAE


14,747.1



14,728.4



15,048.1



15,502.3



16,235.1   (1)
    
    Including Group Re(2)
    
    Polish Re in 2009 and Advent in 2008(3)
    
    Corifrance in 2005




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
          Canadian
    Insurance  Northbridge
    Reconciliation
    of Provision for Claims  Northbridge
  2009


2008


2007


2006


2005(In Cdn$ except as indicated)Provision for claims and LAE at January 1


1,931.8



1,696.0



1,640.2



1,408.7



1,153.9Incurred losses on claims and LAEProvision for current accident years claims


849.4



925.3



778.4



780.8



825.9Foreign exchange effect on claims


(36.6
)


59.2



(46.8
)


0.8



(5.8
)Increase (decrease) in provision for prior accident years
    claims


(16.0
)


(67.1
)


(31.5
)


54.1



(38.1
)Total incurred losses on claims and LAE


796.8



917.4



700.1



835.7



782.0Payments for losses on claims and LAEPayments on current accident years claims


(272.3
)


(298.6
)


(267.9
)


(251.1
)


(248.1
)Payments on prior accident years claims


(483.0
)


(383.0
)


(376.4
)


(353.1
)


(279.1
)Total payments for losses on claims and LAE


(755.3
)


(681.6
)


(644.3
)


(604.2
)


(527.2
)Provision for claims and LAE at December 31


1,973.3



1,931.8



1,696.0



1,640.2



1,408.7Exchange rate


0.9539



0.8100



1.0132



0.8593



0.8561Provision for claims and LAE at December 31 converted to U.S.
    dollars


1,882.3



1,564.8



1,718.4



1,409.5



1,205.9




---



##### 



Northbridges Calendar Year Claims Reserve
    Development
  Calendar yearAs at December 31

1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009(In Cdn$)Provision for claims including LAE


603.3



585.5



621.9



728.9



855.4



1,153.9



1,408.7



1,640.2



1,696.0



1,931.8



1,973.3Cumulative payments as of:One year later


218.9



223.7



200.7



273.7



233.4



279.1



353.1



376.4



383.0



483.0Two years later


334.4



333.8



366.6



396.9



377.9



441.8



594.2



619.5



656.0Three years later


417.8



458.2



451.4



500.1



493.3



576.0



777.3



835.4Four years later


516.9



525.3



527.2



577.1



585.1



707.7



937.7Five years later


566.7



573.9



580.6



632.3



671.0



803.4Six years later


600.7



609.0



616.3



687.0



729.7Seven years later


627.3



634.3



654.4



722.3Eight years later


646.4



660.5



677.3Nine years later


665.1



676.7Ten years later


677.8Reserves re-estimated as of:One year later


596.7



617.9



630.1



724.8



864.8



1,114.6



1,461.7



1,564.3



1,674.0



1,883.8Two years later


621.6



634.3



672.3



792.1



880.8



1,094.0



1,418.1



1,545.4



1,635.1Three years later


638.0



673.9



721.8



812.2



890.1



1,096.7



1,412.5



1,510.3Four years later


674.9



717.2



741.6



826.9



903.2



1,107.2



1,400.2Five years later


711.8



724.5



752.2



836.6



924.4



1,117.7Six years later


714.0



734.8



762.1



857.9



935.0Seven years later


723.8



743.2



780.4



862.7Eight years later


733.6



756.8



784.7Nine years later


743.7



766.8Ten years later


754.7Favourable (unfavourable) development


(151.4
)


(181.3
)


(162.8
)


(133.8
)


(79.6
)


36.2



8.5



129.9



60.9



48.0




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Northbridges Accident Year Claims Reserve
    Development
  Accident year1999 &As at December 31

Prior


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009(In Cdn$)End of first year


603.3



207.7



227.7



299.5



404.2



522.4



573.1



531.6



508.1



640.8



572.4One year later


596.7



215.2



219.6



253.3



346.4



467.2



646.8



499.2



505.1



631.7Two years later


621.6



215.2



222.1



271.0



342.3



437.2



600.5



485.9



501.3Three years later


638.0



217.9



228.4



271.3



336.9



426.9



584.4



463.2Four years later


674.9



224.3



240.9



275.4



340.3



416.2



561.6Five years later


711.8



229.4



241.2



275.2



340.2



416.1Six years later


714.0



229.8



242.6



278.3



346.0Seven years later


723.9



228.6



247.3



278.6Eight years later


733.6



232.0



241.7Nine years later


743.7



230.9Ten years later


754.7Favourable (unfavourable) development


(25.1
)%


(11.2
)%


(6.1
)%


7.0
%


14.4
%


20.3
%


2.0
%


12.9
%


1.3
%


1.4
%     U.S.
    Insurance  Crum & Forster
    Reconciliation of Provision for Claims  U.S.
    Insurance
  2009


2008


2007


2006


2005Provision for claims and LAE at January 1


2,038.3



1,668.9



1,686.9



1,756.7



1,703.1Transfer of Fairmont to Runoff














(146.2
)


Incurred losses on claims and LAEProvision for current accident years claims


566.0



802.8



816.8



762.2



785.9Increase (decrease) in provision for prior accident years
    claims


(25.0
)


59.0



(46.6
)


(48.9
)


(31.3
)Total incurred losses on claims and LAE


541.0



861.8



770.2



713.3



754.6Payments for losses on claims and LAEPayments on current accident years claims


(157.0
)


(228.3
)(1)


(217.2
)


(158.0
)


(171.5
)Payments on prior accident years claims


(632.9
)


(264.1
)


(571.0
)


(478.9
)


(529.5
)Total payments for losses on claims and LAE


(789.9
)


(492.4
)


(788.2
)


(636.9
)


(701.0
)Provision for claims and LAE at December 31


1,789.4



2,038.3



1,668.9



1,686.9



1,756.7   (1)
    
    Reduced by $302.5 of proceeds from a significant reinsurance
    commutation.




---



##### 



Crum &
    Forsters Calendar Year Claims Reserve Development
    (excluding Fairmont prior to 2006)
  Calendar yearAs at December 31

1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009Provision for claims including LAE


2,187.5



1,736.6



1,318.2



1,238.4



1,538.2



1,578.2



1,610.6



1,686.9



1,668.9



2,038.3



1,789.4Cumulative payments as of:One year later


757.4



667.2



447.0



161.3



460.0



466.0



478.9



571.0



264.1



632.9Two years later


1,301.8



1,012.2



525.0



514.5



792.2



796.7



848.7



629.2



649.0Three years later


1,568.4



1,083.8



812.4



780.0



1,045.1



1,066.1



804.7



904.3Four years later


1,633.9



1,311.1



1,029.8



970.2



1,257.1



959.6



1,013.8Five years later


1,855.3



1,483.6



1,185.5



1,144.6



1,111.5



1,118.3Six years later


2,023.8



1,613.9



1,337.6



960.8



1,241.7Seven years later


2,151.5



1,739.9



1,137.6



1,064.1Eight years later


2,276.0



1,531.6



1,232.6Nine years later


2,085.4



1,617.9Ten years later


2,166.9Reserves re-estimated as of:One year later


2,263.1



1,691.0



1,337.7



1,278.6



1,508.1



1,546.9



1,561.7



1,640.3



1,727.9



2,013.3Two years later


2,269.2



1,708.3



1,411.7



1,285.9



1,536.0



1,509.2



1,525.3



1,716.5



1,692.4Three years later


2,282.0



1,754.8



1,420.7



1,308.2



1,513.3



1,499.7



1,640.4



1,700.3Four years later


2,325.1



1,765.2



1,438.6



1,296.8



1,545.5



1,616.7



1,653.0Five years later


2,348.0



1,779.1



1,437.0



1,330.0



1,674.8



1,658.2Six years later


2,361.6



1,794.1



1,469.0



1,457.2



1,719.4Seven years later


2,368.4



1,816.6



1,592.4



1,472.9Eight years later


2,388.5



1,945.5



1,607.5Nine years later


2,513.4



1,957.5Ten years later


2,530.1Favourable (unfavourable) development


(342.6
)


(220.9
)


(289.3
)


(234.5
)


(181.2
)


(80.0
)


(42.4
)


(13.4
)


(23.5
)


25.0       Crum & Forsters Accident Year Claims Reserve
    Development
  Accident year1999 &As at December 31

Prior


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009End of first year


2,187.5



231.0



294.4



347.7



420.9



530.1



529.7



604.2



599.6



574.5



408.9One year later


2,263.1



179.3



296.6



313.9



383.5



470.9



518.5



594.0



582.5



585.1Two years later


2,269.2



183.7



324.1



312.2



389.1



455.9



491.6



555.1



563.0Three years later


2,282.0



187.1



322.8



316.7



377.8



414.2



489.7



526.3Four years later


2,325.1



174.6



326.7



306.8



376.8



401.9



460.8Five years later


2,348.0



174.9



310.1



308.0



378.9



398.8Six years later


2,361.6



183.2



319.6



311.8



407.8Seven years later


2,368.4



185.6



314.2



312.4Eight years later


2,388.5



189.5



317.2Nine years later


2,513.4



184.9Ten years later


2,530.1Favourable (unfavourable) development


(15.7
)%


20.0
%


(7.7
)%


10.2
%


3.1
%


24.8
%


13.0
%


12.9
%


6.1
%


(1.8
)%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Asian
    Insurance  Fairfax Asia
    Reconciliation of Provision for Claims  Fairfax
    Asia
  2009


2008


2007


2006


2005Provision for claims and LAE at January 1


113.2



91.0



87.6



74.7



54.7Incurred losses on claims and LAEProvision for current accident years claims


92.8



65.5



43.1



34.7



39.6Foreign exchange effect on claims


2.5



0.1



2.2



2.1



(0.2
)Increase (decrease) in provision for prior accident years
    claims


(8.1
)


3.4



(4.4
)


2.8



5.1Total incurred losses on claims and LAE


87.2



69.0



40.9



39.6



44.5Payments for losses on claims and LAEPayments on current accident years claims


(20.7
)


(15.9
)


(11.0
)


(11.1
)


(11.2
)Payments on prior accident years claims


(41.0
)


(30.9
)


(26.5
)


(15.6
)


(13.3
)Total payments for losses on claims and LAE


(61.7
)


(46.8
)


(37.5
)


(26.7
)


(24.5
)Provision for claims and LAE at December 31


138.7



113.2



91.0



87.6



74.7     Year acquiredFalcon Insurance


1998Winterthur (Asia) (now part of First Capital Insurance)


2001First Capital Insurance


2004




---



##### 



Fairfax
    Asias Calendar Year Claims Reserve Development
  Calendar yearAs at December 31

1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009Provision for claims including LAE


9.2



11.0



29.6



23.1



25.1



54.7



74.7



87.6



91.0



113.2



138.7Cumulative payments as of:One year later


2.3



5.7



19.0



10.1



7.9



13.3



15.6



26.5



30.9



41.0Two years later


5.3



7.9



26.1



14.1



13.1



21.9



32.6



45.2



49.8Three years later


6.3



9.7



27.9



16.5



15.9



29.1



44.6



56.3Four years later


7.0



10.8



29.1



17.8



17.3



32.6



50.3Five years later


7.1



11.6



29.5



18.2



17.9



33.8Six years later


7.2



11.6



29.7



18.5



18.2Seven years later


7.2



11.7



29.8



18.7Eight years later


7.2



11.7



30.0Nine years later


7.2



11.7Ten years later


7.2Reserves re-estimated as of:One year later


8.9



13.4



32.8



22.4



24.9



59.6



79.6



84.5



94.9



106.0Two years later


9.1



14.1



32.3



22.2



23.1



58.2



72.2



84.1



84.7Three years later


9.3



13.6



32.2



21.3



21.2



49.9



71.8



75.0Four years later


8.3



13.3



31.5



20.5



20.0



48.3



64.7Five years later


8.0



12.8



30.8



19.6



20.0



43.5Six years later


7.5



12.3



30.2



19.8



19.2Seven years later


7.4



11.9



30.4



19.6Eight years later


7.2



11.9



30.4Nine years later


7.2



11.9Ten years later


7.2Favourable (unfavourable) development


2.0



(0.9
)


(0.8
)


3.5



5.9



11.2



10.0



12.6



6.3



7.2     Reinsurance 
    OdysseyRe
    Reconciliation of Provision for Claims 
    OdysseyRe
  2009


2008


2007


2006


2005Provision for claims and LAE at January 1


4,560.3



4,475.6



4,403.1



3,865.4



3,132.5Incurred losses on claims and LAEProvision for current accident years claims


1,313.3



1,518.8



1,367.9



1,344.3



1,888.9Foreign exchange effect on claims


58.8



(143.2
)


26.6



46.6



(28.1
)Increase (decrease) in provision for prior accident years
    claims


(11.3
)


(10.1
)


40.5



185.4



166.5Total incurred losses on claims and LAE


1,360.8



1,365.5



1,435.0



1,576.3



2,027.3Payments for losses on claims and LAEPayments on current accident years claims


(230.6
)


(264.8
)


(251.4
)


(251.3
)


(380.7
)Payments on prior accident years claims


(1,024.2
)


(1,016.0
)


(1,111.1
)


(787.3
)


(913.7
)Total payments for losses on claims and LAE


(1,254.8
)


(1,280.8
)


(1,362.5
)


(1,038.6
)


(1,294.4
)Provision for claims and LAE at December 31


4,666.3



4,560.3



4,475.6



4,403.1



3,865.4




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      OdysseyRes Calendar Year Claims Reserve
    Development
  Calendar yearAs at December 31

1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009Provision for claims including LAE


1,831.5



1,666.8



1,674.4



1,844.6



2,340.9



3,132.5



3,865.4



4,403.1



4,475.6



4,560.3



4,666.3Cumulative payments as of:One year later


608.5



596.2



616.2



601.8



632.4



913.7



787.3



1,111.1



1,016.0



1,024.2Two years later


1,041.3



1,009.9



985.4



998.8



1,212.9



1,298.5



1,614.0



1,808.2



1,646.5Three years later


1,332.8



1,276.4



1,295.5



1,423.6



1,455.7



1,835.7



2,160.9



2,273.0Four years later


1,505.5



1,553.1



1,601.6



1,562.6



1,898.4



2,221.0



2,520.9Five years later


1,718.4



1,802.2



1,665.8



1,932.4



2,206.1



2,490.5Six years later


1,901.2



1,827.3



1,968.7



2,188.1



2,426.5Seven years later


1,904.4



2,061.8



2,173.5



2,373.8Eight years later


2,102.7



2,224.6



2,327.9Nine years later


2,248.7



2,352.3Ten years later


2,362.0Reserves re-estimated as of:One year later


1,846.2



1,689.9



1,740.4



1,961.5



2,522.1



3,299.0



4,050.8



4,443.6



4,465.5



4,549.0Two years later


1,862.2



1,768.1



1,904.2



2,201.0



2,782.1



3,537.0



4,143.5



4,481.5



4,499.0Three years later


1,931.4



1,987.9



2,155.2



2,527.7



3,049.6



3,736.1



4,221.3



4,564.3Four years later


2,113.2



2,241.1



2,468.0



2,827.3



3,293.8



3,837.5



4,320.5Five years later


2,292.2



2,535.0



2,725.8



3,076.8



3,414.1



3,950.1Six years later


2,526.7



2,750.5



2,973.6



3,202.2



3,534.4Seven years later


2,702.1



2,968.9



3,079.3



3,324.8Eight years later


2,893.0



3,068.6



3,193.7Nine years later


2,985.4



3,181.5Ten years later


3,094.0Favourable (unfavourable) development


(1,262.5
)


(1,514.7
)


(1,519.3
)


(1,480.2
)


(1,193.5
)


(817.6
)


(455.1
)


(161.2
)


(23.4
)


11.3       OdysseyRes Accident Year Claims Reserve
    Development
  Accident Year1999 &As at December 31

Prior


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009End of first year


1,831.3



429.1



580.9



720.6



981.3



1,242.1



1,480.2



1,139.6



1,143.1



1,110.8



1,141.5One year later


1,846.2



436.0



568.7



673.5



923.8



1,149.3



1,427.6



1,087.4



1,095.2



1,066.1Two years later


1,862.2



445.0



512.7



661.6



856.4



1,119.7



1,321.2



1,047.5



1,045.7Three years later


1,931.2



483.0



510.2



675.4



824.1



1,074.6



1,297.5



1,031.1Four years later


2,113.2



557.7



529.2



717.7



818.8



1,055.9



1,284.1Five years later


2,292.2



617.0



571.6



719.4



813.7



1,048.1Six years later


2,526.7



656.8



601.0



739.1



811.4Seven years later


2,702.1



684.3



606.9



747.3Eight years later


2,893.0



691.7



608.4Nine years later


2,985.4



696.0Ten years later


3,094.0Favourable (unfavourable) development


(69.0
)%


(62.2
)%


(4.7
)%


(3.7
)%


17.3
%


15.6
%


13.2
%


9.5
%


8.5
%


4.0
%




---



##### 



Reinsurance 
    Other (Group Re, Advent and Polish Re)
    Reconciliation of Provision for Claims 
    Reinsurance  Other
  2009


2008


2007


2006


2005Provision for claims and LAE at January 1


742.0



554.4



558.8



632.3



459.2Transfer to
    Runoff(1)






(97.9
)










Incurred losses on claims and LAEProvision for current accident years claims


371.4



132.4



168.6



201.0



325.9Foreign exchange effect on claims


69.0



(86.7
)


65.0



(0.4
)


8.2Increase (decrease) in provision for prior accident years
    claims


31.2



2.3



(28.4
)


25.2



(0.9
)Total incurred losses on claims and LAE


471.6



48.0



205.2



225.8



333.2Payments for losses on claims and LAEPayments on current accident years claims


(81.5
)


(42.4
)


(54.4
)


(73.7
)


(55.6
)Payments on prior accident years claims


(196.4
)


(93.0
)


(155.2
)


(225.6
)


(104.5
)Total payments for losses on claims and LAE


(277.9
)


(135.4
)


(209.6
)


(299.3
)


(160.1
)Provision for claims and LAE at December
    31(2)


68.4



372.9











Provision for claims and LAE at December 31 excluding CTR Life


1,004.1



742.0



554.4



558.8



632.3CTR Life


27.6



34.9



21.5



24.8



29.3Provision for claims and LAE at December 31


1,031.7



776.9



575.9



583.6



661.6   (1)
    
    Transfer to Runoff of nSpire Res Group Re business in
    2008.(2)
    
    Polish Re in 2009 and Advent in 2008.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
       Reinsurance  Others Calendar Year Claims
    Reserve
    Development(1)
  Calendar YearAs at December 31

1999


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009Provisions for claims including LAE


205.7



209.8



232.4



226.1



263.3



267.6



315.6



373.5



456.5



742.0



1,004.1Cumulative payments as of:One year later


34.8



47.5



66.6



78.2



115.8



54.3



40.3



85.9



93.0



197.7Two years later


73.6



100.5



129.7



175.5



152.8



74.6



104.3



151.9



160.5Three years later


119.9



146.0



215.0



206.0



164.9



128.8



160.5



209.4Four years later


146.9



221.0



232.0



209.0



210.0



179.2



206.6Five years later


215.4



227.7



222.5



243.4



251.8



216.2Six years later


216.5



205.4



243.7



276.7



280.8Seven years later


189.0



220.4



265.2



299.5Eight years later


200.7



237.9



279.7Nine years later


213.3



249.8Ten years later


223.0Reserves re-estimated as of:One year later


191.1



205.3



229.5



268.2



286.3



279.6



319.4



429.4



383.8



833.5Two years later


185.2



202.8



258.5



295.2



302.9



288.2



361.9



375.8



454.1Three years later


185.5



222.7



277.5



310.1



317.3



326.7



322.9



436.9Four years later


202.4



242.0



283.2



323.4



348.4



302.8



377.6Five years later


216.9



245.3



291.1



348.1



338.0



351.7Six years later


217.6



251.5



307.9



343.5



375.2Seven years later


222.6



266.0



305.8



374.6Eight years later


235.4



266.9



327.1Nine years later


236.0



287.1Ten years later


254.0Favourable (unfavourable) development


(48.3
)


(77.3
)


(94.7
)


(148.5
)


(111.9
)


(84.1
)


(62.0
)


(63.4
)


2.4



(91.5
)   (1)
    
    The above table has been restated to reflect the transfer of
    nSpire Res Group Re business to Runoff effective
    January 1, 2008.




---



##### 



Runoff
    Reconciliation of Provision for Claims 
    Runoff
  2009


2008


2007


2006


2005Provision for claims and LAE at January 1


1,989.9



2,116.5



2,487.9



1,797.9



1,481.6Transfer to
    Runoff(1)






97.9







146.2



Incurred losses on claims and LAEProvision for current accident years claims






13.7



5.3



96.2



63.9Foreign exchange effect on claims


14.3



(30.5
)


21.0



29.9



7.3Increase in provision for prior accident years claims


57.6



64.1



90.9



75.8



442.9Increase in provision  Swiss Re commutation














412.6



Total incurred losses on claims and LAE


71.9



47.3



117.2



614.5



514.1Payments for losses on claims and LAEPayments on current accident years claims






(2.6
)


(4.1
)


(32.8
)


(31.0
)Payments on prior accident years claims


(105.1
)(2)


(269.2
)


(484.5
)


(37.9
)(3)


(205.0
)(4)Total payments for losses on claims and LAE


(105.1
)


(271.8
)


(488.6
)


(70.7
)


(236.0
)Provision for claims and LAE at December 31 before the undernoted


1,956.7



1,989.9



2,116.5



2,487.9



1,759.7Provision for claims and LAE at December 31 for Corifrance


















38.2Provision for claims and LAE at December 31


1,956.7



1,989.9



2,116.5



2,487.9



1,797.9   (1)
    
    Transfer to Runoff of nSpire Res Group Re business in
    2008, and of Fairmont in 2006.(2)
    
    Reduced by $136.2 of proceeds received from the commutation
    of several reinsurance treaties.(3)
    
    Reduced by $587.4 of proceeds received from the commutation
    of the Swiss Re corporate adverse development cover.(4)
    
    Reduced by $570.3 of proceeds received and proceeds due from
    the commutation of two significant adverse development
    covers.    Asbestos,
    Pollution and Other Hazards
  General
    A&E Discussion




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
          2009


2008


2007Gross


Net


Gross


Net


Gross


NetRunoffProvision for A&E claims and ALAE at January 1


914.8



276.1



988.8



285.9



1,090.3



309.5A&E losses and ALAE incurred during the year


74.6



89.1



26.3



17.4



3.8



(7.8
)A&E losses and ALAE paid during the year


83.1



11.1



100.3



27.2



105.3



15.8Provision for A&E claims and ALAE at December 31


906.3



354.1



914.8



276.1



988.8



285.9Crum & ForsterProvision for A&E claims and ALAE at January 1


444.6



380.7



485.5



418.6



486.3



421.7A&E losses and ALAE incurred during the year


26.5



7.0



31.9



34.6



54.9



46.5A&E losses and ALAE paid during the year


80.0



47.7



72.8



72.5



55.7



49.6Provision for A&E claims and ALAE at December 31


391.1



340.0



444.6



380.7



485.5



418.6OdysseyReProvision for A&E claims and ALAE at January 1


394.8



260.4



381.2



256.9



344.6



215.7A&E losses and ALAE incurred during the year


70.3



40.6



76.4



45.1



100.1



77.5A&E losses and ALAE paid during the year


51.4



35.4



62.8



41.6



63.5



36.3Provision for A&E claims and ALAE at December 31


413.7



265.6



394.8



260.4



381.2



256.9Fairfax TotalProvision for A&E claims and ALAE at January 1


1,754.2



917.2



1,855.5



961.4



1,921.2



946.9A&E losses and ALAE incurred during the year


171.4



136.7



134.6



97.1



158.8



116.2A&E losses and ALAE paid during the year


214.5



94.2



235.9



141.3



224.5



101.7Provision for A&E claims and ALAE at December 31


1,711.1



959.7



1,754.2



917.2



1,855.5



961.4




---



##### 



Runoff


Crum & Forster


OdysseyReNet loss and ALAE reserves


354.1



340.0



265.63-year average net paid loss and ALAE


18.0



56.6



37.83-year survival ratio


19.6



6.0



7.0   Asbestos
    Claim Discussion
      2009


2008


2007Gross


Net


Gross


Net


Gross


NetRunoffProvision for asbestos claims and ALAE at January 1


589.0



186.8



655.4



199.9



729.8



219.0Asbestos losses and ALAE incurred during the year


120.3



74.6



7.1



4.0



6.2



(8.7
)Asbestos losses and ALAE paid during the year


40.9



9.9



73.5



17.1



80.6



10.4Provision for asbestos claims and ALAE at December 31


668.4



251.5



589.0



186.8



655.4



199.9Crum & ForsterProvision for asbestos claims and ALAE at January 1


356.4



301.8



391.5



333.6



404.4



348.2Asbestos losses and ALAE incurred during the year


21.2



2.8



23.1



25.2



31.1



24.3Asbestos losses and ALAE paid during the year


63.5



35.3



58.2



57.0



44.0



38.9Provision for asbestos claims and ALAE at December 31


314.1



269.3



356.4



301.8



391.5



333.6OdysseyReProvision for asbestos claims and ALAE at January 1


360.6



230.5



339.2



222.4



308.7



189.0Asbestos losses and ALAE incurred during the year


69.4



40.0



73.8



41.0



85.9



63.0Asbestos losses and ALAE paid during the year


43.4



28.9



52.4



32.9



55.4



29.6Provision for asbestos claims and ALAE at December 31


386.6



241.6



360.6



230.5



339.2



222.4Fairfax TotalProvision for asbestos claims and ALAE at January 1


1,306.0



719.1



1,386.1



755.9



1,442.9



756.2Asbestos losses and ALAE incurred during the year


210.9



117.4



104.0



70.2



123.2



78.6Asbestos losses and ALAE paid during the year


147.8



74.1



184.1



107.0



180.0



78.9Provision for asbestos claims and ALAE at December 31


1,369.1



762.4



1,306.0



719.1



1,386.1



755.9




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      insured-by-insured ground-up,
  insured-by-insured
    Environmental
    Pollution Discussion




---



##### 



2009

2008

2007Gross

Net

Gross

Net

Gross

NetRunoffProvision for pollution claims and ALAE at January 1


325.8



89.3



333.4



86.0



360.5



90.5Pollution losses and ALAE incurred during the year


(45.7
)


14.5



19.2



13.4



(2.4
)


0.9Pollution losses and ALAE paid during the year


42.2



1.2



26.8



10.1



24.7



5.4Provision for pollution claims and ALAE at December 31


237.9



102.6



325.8



89.3



333.4



86.0Crum & ForsterProvision for pollution claims and ALAE at January 1


88.2



78.9



94.0



85.0



81.9



73.5Pollution losses and ALAE incurred during the year


5.3



4.2



8.8



9.4



23.8



22.2Pollution losses and ALAE paid during the year


16.5



12.4



14.6



15.5



11.7



10.7Provision for pollution claims and ALAE at December 31


77.0



70.7



88.2



78.9



94.0



85.0OdysseyReProvision for pollution claims and ALAE at January 1


34.2



29.9



42.0



34.5



35.9



26.7Pollution losses and ALAE incurred during the year


0.9



0.6



2.6



4.1



14.2



14.5Pollution losses and ALAE paid during the year


8.0



6.5



10.4



8.7



8.1



6.7Provision for pollution claims and ALAE at December 31


27.1



24.0



34.2



29.9



42.0



34.5Fairfax TotalProvision for pollution claims and ALAE at January 1


448.2



198.1



469.4



205.5



478.3



190.7Pollution losses and ALAE incurred during the year


(39.5
)


19.3



30.6



26.9



35.6



37.6Pollution losses and ALAE paid during the year


66.7



20.1



51.8



34.3



44.5



22.8Provision for pollution claims and ALAE at December 31


342.0



197.3



448.2



198.1



469.4



205.5   ground-up,
    Summary




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Reinsurance
    Recoverables
  and/or




---



##### 



A.M. Best rating


Gross


Net(or S&P


reinsurance


recoverable(3)Group

Principal reinsurers

equivalent)(1)


recoverable(2)


reinsuranceSwiss Re

Swiss Re America Corp.




A



706.7



408.1Lloyds

Lloyds




A



315.8



274.8Nationwide

Nationwide Mutual Ins Co.




A+



248.5



248.4Munich

Munich Reinsurance Co. of Canada




A+



165.4



140.7HDI

Hannover Rueckversicherung




A



123.7



95.9Everest

Everest Reinsurance Co.




A+



121.8



89.1SCOR

SCOR Canada Reinsurance Co.




A-



117.8



97.9Aegon

Arc Re




(4
)


109.2



17.5Ace

Insurance Co. of North America




A+



95.5



92.7Transatlantic

Transatlantic Re




A



91.3



86.6CNA

CNA Ins. Companies




A



80.1



42.8AXA

Colisee Re




NR



63.5



53.1Berkshire Hathaway

General Reinsurance Corp.




A++



61.4



58.0Arch Capital

Arch Reinsurance Co.




A



53.6



12.7Travelers

Travelers Indemnity Co.




A+



52.7



51.8Genworth

Genworth Life and Annuity Insurance Co.




A



50.1



50.1Platinum

Platinum Underwriters Reinsurance Co.




A



47.1



40.1GIC

General Insurance Corp. of India




A-



46.4



4.5Max Capital

Max Bermuda Ltd.




A-



43.1



15.1Enstar/Castlewood

Unionamerica Insurance




NR



39.5



34.3PartnerRe

Paris Re SA




A



38.9



30.8Liberty Mutual

Employers Insurance of Wausau




A



36.0



35.3Cigna

Connecticut General Life Insurance Co.




A



32.9



32.8Ullico

Ullico Casualty Co.




B+



32.7



Brit

Brit Insurance Ltd.




A



32.3



27.7Chubb

Federal Insurance Co.




A++



31.2



30.9Aspen

Aspen Insurance UK Ltd




A



31.0



28.0Met Life

Metropolitan Life Insurance Co.




A+



28.1



28.1Aviva

Aviva International Insurance Ltd.




A



27.7



27.4AIG

National Union Fire Insurance Co. of Pittsburgh




A



27.5



27.4CCR

Caisse Centrale de Reassurance




A++



27.2



21.6XL

XL Reinsurance America Inc.




A



26.2



22.0Toa Re

Toa Reinsurance Co. of America




A



25.0



23.3Globale Re

Global Reinsurance Corp.




NR



25.0



22.0Aioi

Aioi Insurance Co. Ltd.




A



24.5



17.4Hartford

Excess Insurance Co. Ltd.




A



23.6



22.4Validus

Validus Reinsurance Ltd.




A-



22.6



17.8Sompo

Sompo Japan Insurance Inc.




A+



22.1



20.2Manulife

John Hancock Life Insurance Co.




A+



21.8



18.8Singapore Re

Singapore Re Corp




A-



21.0



4.7Allstate

Allstate Insurance Co.




A+



20.3



20.3White Mountains

White Mountains Reinsurance Co. of America




A-



19.3



17.9FM Global

Factory Mutual Insurance Co.




A+



18.5



18.4Tokio Marine

Tokio Marine & Nichido Fire Insurance Co. Ltd.




A++



18.4



16.1Symetra

Symetra Life Insurance Co.




A



17.6



17.6Starr

Starr Indemnity & Liability Co.




A



17.3



17.3Zurich

Zurich Insurance Co.




A



17.2



7.9Axis

Axis Reinsurance Co.




A



16.8



16.8WR Berkley

Berkley Insurance Co.




A+



16.2



15.1Dukes Place

Seaton Insurance Co.




NR



15.3



15.3Sub-total










3,367.4



2,535.5Other reinsurers










822.8



623.5Total reinsurance recoverable










4,190.2



3,159.0Provision for uncollectible reinsurance










381.1



381.1Net reinsurance recoverable










3,809.1



2,777.9   (1)
    
    Of principal reinsurer (or, if principal reinsurer is not
    rated, of group).(2)
    
    Before specific provisions for uncollectible reinsurance.(3)
    
    Net of outstanding balances for which security was held, but
    before specific provisions for uncollectible reinsurance.(4)
    
    Aegon is rated A- by S&P; Arc Re is not rated.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
       Consolidated
    Reinsurance Recoverables
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


124.0



8.4



115.6A+


871.4



76.1



795.3A


1,837.4



470.3



1,367.1A-


352.8



143.5



209.3B++


39.6



9.9



29.7B+


60.7



41.3



19.4B or lower


17.6



0.3



17.3Not rated


806.0



235.7



570.3Pools & associations


80.7



45.7



35.04,190.2



1,031.2



3,159.0Provision for uncollectible reinsurance




381.1







381.1Net reinsurance recoverable




3,809.1







2,777.9




---



##### 



Reinsurance
    Recoverables  Reinsurance and Insurance Operating
    Companies
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


95.9



8.3



87.6A+


456.6



57.7



398.9A


1,334.2



404.6



929.6A-


295.2



138.2



157.0B++


32.0



9.2



22.8B+


55.9



39.0



16.9B or lower


6.1



0.3



5.8Not rated


336.4



132.2



204.2Pools & associations


68.8



45.7



23.12,681.1



835.2



1,845.9Provision for uncollectible reinsurance




127.7







127.7Net reinsurance recoverable




2,553.4







1,718.2   Reinsurance
    Recoverables  Runoff Operations
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


28.1



0.1



28.0A+


414.8



18.4



396.4A


503.2



65.7



437.5A-


57.6



5.3



52.3B++


7.6



0.7



6.9B+


4.8



2.3



2.5B or lower


11.5







11.5Not rated


469.6



103.5



366.1Pools & associations


11.9







11.91,509.1



196.0



1,313.1Provision for uncollectible reinsurance




253.4







253.4Net reinsurance recoverable




1,255.7







1,059.7




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
          Float




---



##### 



Average longBenefit


term CanadaUnderwriting





(cost)


treasury bondYear

profit (loss)


Average float


of float


yield1986


2.5



21.6



11.6%



9.6
%(Up and Down Arrow)2005


(437.5
)


7,323.9



(6.0%
)


4.4
%2006


212.6



8,212.9



2.6%



4.3
%2007


238.9



8,617.7



2.8%



4.3
%2008


(280.9
)


8,917.8



(3.1%
)


4.1
%2009


7.3



9,449.1



0.1%



3.9
%Weighted average since inception










(2.3%
)


5.0
%Fairfax weighted average financing differential since inception:
    2.7%     TotalInsuranceCanadian


U.S.


Asian





andYear

Insurance


Insurance


Insurance


Reinsurance


Reinsurance


Runoff


Total2005


1,461.8



1,884.9



120.2



4,501.1



7,968.0



788.6



8,756.62006


1,586.0



1,853.8



85.4



4,932.6



8,457.8



2,061.0



10,518.82007


1,887.4



1,812.8



86.9



4,990.4



8,777.5



1,770.5



10,548.02008


1,739.1



2,125.1



68.9



5,125.0



9,058.1



1,783.8



10,841.92009


2,052.8



2,088.9



125.7



5,572.7



9,840.1



1,733.2



11,573.3     Insurance
    Environment




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Investments
    Average


Interest and dividend incomeinvestments at


Pre-tax


After taxYear

carrying value


Amount


Yield


Per share


Amount


Yield


Per share(%)


($)





(%)


($)1986


46.3



3.4



7.34



0.70



1.8



3.89



0.38(Up and Down Arrow)1999


10,020.3



532.7



5.32



39.96



348.0



3.47



26.102000


11,291.5



534.0



4.73



40.54



377.6



3.34



28.662001


10,264.3



436.9



4.26



33.00



297.1



2.89



22.442002


10,377.9



436.1



4.20



30.53



292.2



2.82



20.462003


11,527.5



331.9



2.88



23.78



215.8



1.87



15.462004


12,955.8
(1)


375.7



2.90



27.17



244.3



1.89



17.662005


14,142.5
(1)


466.1



3.30



28.34



303.0



2.14



18.422006


15,827.0
(1)


746.5



4.72



42.03



485.3



3.07



27.322007


17,898.0
(1)(2)


761.0



4.25



42.99



494.7



2.76



27.952008


19,468.8
(1)(2)


626.4



3.22



34.73



416.6



2.14



23.102009


20,604.2
(1)(2)


712.7



3.46



38.94



477.5



2.32



26.09   (1)
    
    Net of $57.2 (2008  $29.4; 2007 
    $1,062.8; 2006  $783.3; 2005  $700.3;
    2004  539.5) of short sale and derivative obligations
    of the holding company and the subsidiary companies.(2)
    
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively, and
    accordingly prior period investment balances in this table have
    not been restated.




---



##### 



Cash andshort term





Preferred


Common


Real





Per shareYear

investments


Bonds(2)


stocks


stocks(3)


estate


Total


($)1985


6.4



14.1



1.0



2.5







24.0



4.80(Up and Down Arrow)1999


1,766.9



9,165.9



92.3



1,209.0



55.6



12,289.7



915.352000


1,663.0



7,825.5



46.7



813.6



50.8



10,399.6



793.812001


1,931.3



7,357.3



79.4



811.7



49.1



10,228.8



712.762002


2,033.2



7,390.6



160.1



992.1



20.5



10,596.5



753.902003


6,120.8



4,705.2



142.3



1,510.7



12.2



12,491.2



901.352004


4,075.0
(1)


7,260.9



135.8



1,960.9



28.0



13,460.6
(1)


840.80
(1)2005


4,385.0
(1)


8,127.4



15.8



2,324.0



17.2



14,869.4
(1)


835.11
(1)2006


5,188.9
(1)


9,017.2



16.4



2,579.2



18.0



16,819.7
(1)


948.62
(1)2007(4)


3,965.7
(1)


11,669.1



19.9



3,339.5



6.5



19,000.7
(1)


1,075.50
(1)2008(4)


6,343.5
(1)


9,069.6



50.3



4,480.0



6.4



19,949.8
(1)


1,140.85
(1)2009(4)


3,658.8
(1)


11,550.7



357.6



5,697.9



8.0



21,273.0
(1)


1,064.24
(1)   (1)
    
    Net of $57.2 (2008  $29.4; 2007 
    $1,062.8; 2006  $783.3; 2005  700.3;
    2004  $539.5) of short sale and derivative
    obligations of the holding company and the subsidiary
    companies.(2)
    
    Includes credit derivatives.(3)
    
    Includes investments at equity and equity derivatives.(4)
    
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively, and
    accordingly prior period investment balances in this table have
    not been restated.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Carrying value ofIssuer Credit Rating

fixed income portfolio

%AAA/Aaa


5,748.9



50.1AA/Aa


1,695.4



14.8A/A


1,468.5



12.8BBB/Baa


970.8



8.5BB/Ba


253.5



2.2B/B


291.9



2.5Lower than B/B and unrated


1,039.4



9.1Total


11,468.4



100.0




---



##### 



Interest
    Rate Risk
      December 31,
    2009
  Hypothetical $ changeeffect on:Fair value of


Otherfixed income


comprehensive


Net


HypotheticalChange in Interest Rates

portfolio


income


earnings


% change200 basis point increase


9,689.3



(448.6
)


(752.3
)


(15.5
)100 basis point increase


10,535.9



(241.5
)


(389.4
)


(8.1
)No change


11,468.4











100 basis point decrease


12,434.0



268.9



384.1



8.4200 basis point decrease


13,521.5



585.7



806.0



17.9




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Return on
    the Investment Portfolio
    Change inNet gains (losses)


unrealizedAverage








Change in


recorded in:


gains


Total returninvestments


Interest


Net


unrealized





Other


(losses)


on averageat carrying


and


realized


gains


Net


comprehensive


on equity method


investmentsYear

value


dividends


gains


(losses)


earnings


income


investments





(%)1986


46.3



3.4



0.7



(0.2
)














3.9



8.4(Up and Down Arrow)1999


10,020.3



532.7



63.8



(871.4
)














(274.9
)


(2.7
)2000


11,291.5



534.0



259.1



584.1















1,377.2



12.22001


10,264.3



436.9



121.0



194.0















751.9



7.32002


10,377.9



436.1



465.0



263.2















1,164.3



11.22003


11,527.5



331.9



826.1



142.4















1,300.4



11.32004


12,955.8
(1)


375.7



300.5
(2)


165.6















841.8



6.52005


14,142.5
(1)


466.1



385.7



73.0















924.8



6.52006


15,827.0
(1)


746.5



789.4
(3)


(247.8
)














1,288.1



8.12007


17,898.0
(1)(4)


761.0











1,639.5
(6)


304.5



(131.2
)


2,573.8



14.42008


19,468.8
(1)(4)


626.4











2,718.6
(6)


(426.7
)


278.3



3,196.6



16.42009


20,604.2
(1)(4)


712.7











904.3
(6)


1,076.7



(185.2
)


2,508.5



12.2Cumulative from inception






6,771.8



3,887.8







5,262.4















9.9
(5)   (1)
    
    Net of $57.2 (2008  $29.4; 2007 
    $1,062.8; 2006  $783.3; 2005  $700.3;
    2004  $539.5) of short sale and derivative
    obligations of the holding company and the subsidiary
    companies.(2)
    
    Excludes the $40.1 gain on the companys 2004 secondary
    offering of Northbridge and the $27.0 loss in connection with
    the companys repurchase of outstanding debt at a premium
    to par.(3)
    
    Excludes the $69.7 gain on the companys 2006 secondary
    offering of OdysseyRe, the $15.7 loss on the companys
    repurchase of outstanding debt at a premium to par and the $8.1
    dilution loss on conversions during 2006 of the OdysseyRe
    convertible senior debenture.(4)
    
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively, and
    accordingly prior period investment balances in this table have
    not been restated.(5)
    
    Simple average of the total return on average investments for
    each of the 24 years.(6)
    
    Excluding a net gain in 2009 of $14.3 (2008  net
    loss of $147.9; 2007  net gain of $26.4) recognized
    on the companys underwriting activities. Net gains on
    investments in 2009 also excluded $25.9 of gains recognized on
    transactions in the common and preferred shares of the
    companys consolidated subsidiaries.




---



##### 



Capital
    Resources and Management
    2009


2008


2007


2006(1)


2006


2005Holding company cash, short term investments and marketable
    securities, net of short sale and derivative obligations


1,242.7



1,555.0



963.4



783.6



767.4



559.0Holding company debt


1,236.9



869.6



1,063.2



1,181.5



1,202.6



1,365.3Subsidiary debt


903.4



910.2



915.0



974.2



981.3



933.2Other long term obligations  holding company


173.5



187.7



192.6



197.1



197.1



244.5Total debt


2,313.8



1,967.5



2,170.8



2,352.8



2,381.0



2,543.0Net debt


1,071.1



412.5



1,207.4



1,569.2



1,613.6



1,984.0Common shareholders equity


7,391.8



4,866.3



4,121.4



2,799.6



2,720.3



2,507.6Preferred equity


227.2



102.5



136.6



136.6



136.6



136.6Non-controlling interests


117.6



1,382.8



1,585.0



1,300.6



1,292.9



751.4Total equity and non-controlling interests


7,736.6



6,351.6



5,843.0



4,236.8



4,149.8



3,395.6Net debt/total equity and non-controlling interests


13.8
%


6.5
%


20.7
%


37.0
%


38.9
%


58.4
%Net debt/net total
    capital(2)


12.2
%


6.1
%


17.1
%


27.0
%


28.0
%


36.9
%Total debt/total
    capital(3)


23.0
%


23.7
%


27.1
%


35.7
%


36.5
%


42.8
%Interest
    coverage(4)


8.2
x


16.4
x


11.3
x


5.2
x


5.2
x


n/a   (1)
    
    Balances reflect the adjustment at January 1, 2007 upon
    adoption of the accounting standards described in note 2 to
    the consolidated financial statements.(2)
    
    Net total capital is calculated by the company as the sum of
    total shareholders equity, non-controlling interests and
    net debt.(3)
    
    Total capital is calculated by the company as the sum of
    total shareholders equity, non-controlling interests and
    total debt.(4)
    
    Interest coverage is calculated by the company as the sum of
    earnings (loss) from operations before income taxes and interest
    expense divided by interest expense.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
              Number of


Averagesubordinate


issue/repurchase


Net proceeds/Date

voting shares


price per share


(repurchase cost)2005  issue of shares


1,843,318



162.75



299.82005  repurchase of shares


(49,800
)


148.59



(7.4
)2006  repurchase of shares


(67,800
)


113.57



(7.7
)2007  repurchase of shares


(38,600
)


181.35



(7.0
)2008  issue of shares


886,888



216.83



192.32008  repurchase of shares


(1,066,601
)


264.39



(282.0
)2009  issue of shares


2,881,844



343.29



989.32009  repurchase of shares


(360,100
)


341.29



(122.9
)




---



##### 



Net premiums written to surplus(total shareholders equity)2009


2008


2007


2006


2005InsuranceNorthbridge (Canada)


0.7



1.0



0.7



1.0



1.1Crum & Forster (U.S.)


0.5



0.8



0.8



1.0



0.9Fairmont
    (U.S.)(1)


n/a



n/a



n/a



n/a



0.9Fairfax Asia


0.4



0.3



0.3



0.4



0.5ReinsuranceOdysseyRe


0.5



0.7



0.8



1.1



1.5Other(2)


1.1



0.6



0.6



1.2



1.1Canadian insurance industry


1.0



1.0



1.0



1.0



1.1U.S. insurance industry


0.8



1.0



0.9



0.9



1.0   (1)
    
    Crum & Forster acquired the ongoing Fairmont
    business in 2006.(2)
    
    Other includes Group Re and Advent (effective
    September 11, 2008) and Polish Re (effective
    January 7, 2009).




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      StandardIssuer Credit Ratings

A.M. Best


& Poors


Moodys


DBRSFairfax Financial Holdings Limited


bbb



BBB-



Ba1



BBB (low
)Crum & Forster Holdings Corp.


bbb



BBB-



Ba1



Odyssey Re Holdings Corp.


bbb



BBB-



Baa3



Financial Strength RatingsCrum & Forster Holdings
    Corp.(1)


A



A-



Baa



Odyssey Re Holdings
    Corp.(1)


A



A-



A3



Lombard General Insurance Company of Canada


A



A-







Commonwealth Insurance Company


A



A-







Markel Insurance Company of Canada


A



A-







Federated Insurance Company of Canada


A



A-







CRC (Bermuda) Reinsurance Limited


A











First Capital Insurance Limited


A











Falcon Insurance Company (Hong Kong) Limited






A-







Advent Capital (Holdings) PLC


A
(2)


A+
(2)






Polish Re


B++



BBB







   (1)
    
    Financial strength ratings apply to the operating
    companies(2)
    
    Advents ratings are the A.M. Best and Standard &
    Poors ratings assigned to Lloyds    Liquidity




---



##### 



start-up
      Contractual
    Obligations
    Less than








More than1 year


1 - 3 years


3 - 5 years


5 years


TotalGross claims liability


3,412.7



4,240.0



2,343.0



4,751.4



14,747.1Long term debt obligations  principal


1.8



181.0



225.2



1,774.9



2,182.9Long term debt obligations  interest


156.8



306.3



268.0



647.8



1,378.9Operating leases  obligations


51.7



66.9



36.3



79.4



234.3Other long term liabilities  principal


6.1



10.8



9.5



147.1



173.5Other long term liabilities  interest


15.0



28.3



26.7



44.0



114.03,644.1



4,833.3



2,908.7



7,444.6



18,830.7     Lawsuits
    Managements
    Evaluation of Disclosure Controls and Procedures




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f)
    Internal Control-Integrated Framework. Internal Control  Integrated
    Framework
    Issues
    and Risks
    Claims Reserves
    Latent Claims




---



##### 



Recoverable from Reinsurers
      Cost
    of Reinsurance and Adequate Protection
      Catastrophe Exposure
    Foreign Exchange




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Competition
    Pricing Risk
    Regulation
    Taxation
      Strategic




---



##### 



Reliance on Distribution Channels
      Cyclical Nature of the Property & Casualty
    Business
            Regional or Geographical Limitations and Risks




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        General Economic Conditions
  Impact on insurance and reinsurance business:
      Impact on bonds, common and preferred stocks and derivative
    securities holdings:
      Goodwill and Intangibles




---



##### 



Ratings
    Key
    Employees
    Access to Capital
    Information Requests or Proceedings by Government
    Authorities
    Lawsuits
    day-to-day
  Technology




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Change in
    Presentation of Foreign Currency Gains (Losses)
    2009


2008


2007Net gains (losses) on investments:Underwriting activities


14.3



(147.9
)


26.4Investing activities


(31.9
)


102.5



111.1Foreign currency gains (losses) included in pre-tax net earnings


(17.6
)


(45.4
)


137.5Other comprehensive income  investing activities
    foreign currency gains (losses)


(39.3
)


41.6



(45.2
)(56.9
)


(3.8
)


92.3   Change in
    Accounting Policy
      International Financial Reporting Standards
    (IFRS)




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
                Critical
    Accounting Estimates and Judgments
    Provision for Claims




---



##### 




    Loss trend factors are used to establish expected loss ratios
    for subsequent accident years based on the projected loss ratios
    for prior accident years. Provisions for inflation and social
    inflation (e.g., awards by judges and juries which progressively
    increase in size at a rate exceeding that of general inflation)
    and trends in court interpretations of coverage are among the
    factors which must be considered.
    Expected loss ratios for the latest accident years generally
    reflect the expected loss ratios from prior accident years
    adjusted for the loss trend, as well as the impact of rate level
    changes and other quantifiable factors.
    Loss development factors are used to arrive at the ultimate
    amount of losses incurred for each accident year based on
    reported loss information. These factors, which are initially
    calculated based on historical loss development patterns (i.e.,
    the emergence of reported losses over time relative to the
    ultimate losses to be paid), are then adjusted for current
    trends.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Provision for Uncollectible Reinsurance
    Recoverables
    Provision for Other than Temporary Impairment in the Value of
    Investments
    Valuation Allowance for Recovery of Future Income
    Taxes
    Assessment of Goodwill for Potential Impairment
    Compliance
    with Corporate Governance Rules




---



##### 



Forward-Looking
    Statements
      Quarterly
    Data (unaudited)
  Years
    ended December 31
 First


Second


Third


Fourth


FullQuarter


Quarter


Quarter


Quarter


Year2009Revenue


1,279.4



1,735.5



2,213.4



1,407.3



6,635.6Net earnings (loss)


(60.4
)


275.4



562.4



79.4



856.8Net earnings (loss) per share

$
(3.55
)

$
15.65


$
31.04


$
1.66


$
43.99Net earnings (loss) per diluted share

$
(3.55
)

$
15.56


$
30.88


$
1.65


$
43.752008Revenue


2,370.5



1,243.5



2,162.9



2,048.7



7,825.6Net earnings


631.8



27.6



467.6



346.8



1,473.8Net earnings per share

$
34.72


$
0.84


$
25.40


$
19.73


$
80.38Net earnings per diluted share

$
33.78


$
0.84


$
25.27


$
19.62


$
79.532007Revenue


1,538.7



1,691.1



1,879.6



2,400.8



7,510.2Net earnings


110.9



168.1



253.2



563.6



1,095.8Net earnings per share

$
6.10


$
9.32


$
14.12


$
31.71


$
61.20Net earnings per diluted share

$
5.88


$
8.92


$
13.47


$
30.15


$
58.38




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Stock
    Prices and Share Information
      First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Cdn$)2009High


404.00



329.99



416.40



417.35Low


272.38



275.95



281.79



364.00Close


326.00



292.00



397.73



410.002008High


342.20



340.00



350.00



390.00Low


255.32



240.01



221.94



303.85Close


298.90



261.00



341.14



390.002007High


276.00



270.48



262.54



311.87Low


200.00



203.50



195.25



222.16Close


260.00



203.50



242.52



287.00The table that follows presents the Toronto Stock Exchange and
    New York Stock Exchange high, low and closing U.S. dollar
    prices of subordinate voting shares of Fairfax for each quarter
    of 2009, 2008 and 2007.First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(1)(US$)2009High


328.76



280.49



382.38



393.00Low


211.01



237.16



241.50



343.00Close


260.50



249.49



370.73



393.002008High


343.00



336.00



330.00



355.48Low


258.23



235.70



210.50



241.71Close


287.10



253.90



328.50



313.412007High


238.75



234.42



260.57



310.34Low


169.41



191.67



180.00



228.64Close


224.58



191.67



244.00



286.13   (1)
    
    Effective November 24, 2009, Fairfaxs subordinate
    voting shares are traded in both Canadian and U.S. dollars in
    the Toronto Stock Exchange. On December 10, 2009,
    Fairfaxs subordinate voting shares were voluntarily
    delisted from the New York Stock Exchange.