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. Additional information 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, net debt divided by net total capital and total
    debt divided by total capital. The company also calculates an
    interest coverage ratio and an interest and preferred share
    dividend distribution coverage ratio as a measure of its ability
    to service its debt and pay dividends to its preferred
    shareholders.(5)
    References in this Managements Discussion and Analysis of
    Financial Condition and Results of Operations to Fairfaxs
    insurance and reinsurance operations do not include
    Fairfaxs runoff operations.  Sources
    of Revenue
    2010


2009


2008Net premiums earnedInsurance       Canada
    (Northbridge)


996.6



969.2



1,076.1 U.S.
    (Crum & Forster and Zenith National)


1,000.1



781.3



1,005.0 Asia
    (Fairfax Asia)


155.0



116.0



84.6Reinsurance  OdysseyRe


1,885.7



1,927.4



2,076.4Reinsurance and Insurance  Other


536.0



628.1



269.6Runoff


7.2







17.44,580.6



4,422.0



4,529.1Interest and dividends


762.4



712.7



626.4Net gains on investments


188.5



944.5



2,570.7Excess of fair value of net assets acquired over purchase price


83.1







Other revenue


549.1



556.4



99.46,163.7



6,635.6



7,825.6   year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        mark-to-market mark-to-market mark-to-market
  reinsurance-to-close




---



##### 



reinsurance-to-close
    reinsurance-to-close year-over-year year-over-year year-over-year
    reinsurance-to-close




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Net
    Earnings




---



##### 



2010


2009


2008(1)(2)Combined ratiosInsurance       Canada
    (Northbridge)


107.3
%


105.9
%


103.5
% U.S.
    (Crum & Forster and Zenith National)


116.8
%


104.1
%


117.6
% Asia
    (Fairfax Asia)


89.3
%


82.6
%


91.8
%Reinsurance  OdysseyRe


98.6
%


96.7
%


101.3
%Reinsurance and Insurance  Other


107.2
%


98.1
%


116.6
%Consolidated


105.2
%


99.8
%


106.2
%Sources of net earningsUnderwritingInsurance       Canada
    (Northbridge)


(72.4
)


(57.1
)


(37.9
) U.S.
    (Crum & Forster and Zenith National)


(168.2
)


(32.0
)


(177.2
) Asia
    (Fairfax Asia)


16.6



20.2



6.9Reinsurance  OdysseyRe


25.8



64.3



(27.7
)Reinsurance and Insurance  Other


(38.4
)


11.9



(45.0
)Underwriting profit (loss)


(236.6
)


7.3



(280.9
)Interest and dividends  insurance and reinsurance


603.4



557.0



476.1Operating income


366.8



564.3



195.2Net gains on investments  insurance and reinsurance


215.4



668.0



1,381.8Runoff


143.5



31.2



392.6Other (animal nutrition)


10.3



12.4



1.4Interest expense


(195.4
)


(166.3
)


(158.6
)Corporate overhead and other


(188.9
)


96.0



631.9Pre-tax income


351.7



1,205.6



2,444.3Income taxes


119.5



(214.9
)


(755.6
)Net earnings


471.2



990.7



1,688.7Attributable to:Shareholders of Fairfax


469.0



856.8



1,473.8Non-controlling interests


2.2



133.9



214.9471.2



990.7



1,688.7   (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%.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      year-over-year
  2010


2009


2008Net gains (losses) on investments:Common stocks


476.5



239.0



35.7Equity derivatives


(755.9
)


224.3



2,061.1Bonds


573.9



937.9



218.9Preferred stocks


(13.8
)


26.6



3.0Other derivatives


26.4



(147.2
)


1,305.7Partial disposition of investee company


77.9







Provisions for other than temporary impairments


(33.7
)


(340.0
)


(1,011.8
)Foreign currency


(178.2
)


(17.6
)


(45.4
)Other


15.4



21.5



3.5188.5



944.5



2,570.7   mark-to-market mark-to-market mark-to-market mark-to-market




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Net
    Earnings by Business Segment
    Year
    ended December 31, 2010
  OtherReinsurance





OtherFairfax



and

Ongoing



(animal



Corporate &Northbridge

U.S.

Asia

OdysseyRe

Insurance

Operations

Runoff

nutrition)

Intercompany

Other

ConsolidatedGross premiums written


1,299.9


1,078.3


353.2


2,167.3


628.0


5,526.7


2.8





(166.6)





5,362.9Net premiums written


985.0


919.5


157.4


1,853.8


530.5


4,446.2


2.8











4,449.0Net premiums earned


996.6


1,000.1


155.0


1,885.7


536.0


4,573.4


7.2











4,580.6Underwriting profit (loss)


(72.4)


(168.2)


16.6


25.8


(38.4)


(236.6)














(236.6)Interest and dividends


125.8


103.9


39.8


288.9


45.0


603.4














603.4Operating income (loss) before:


53.4


(64.3)


56.4


314.7


6.6


366.8














366.8Net gains (losses) on investments


55.7


122.5


(3.5)


(28.8)


72.9


218.8


98.7





(3.4)





314.1Runoff(1)




















44.8











44.8Other (animal nutrition)























10.3








10.3Interest expense





(30.7)





(30.5)


(4.5)


(65.7)


(3.2)


(0.6)





(125.9)


(195.4)Corporate overhead and other


(15.4)


(7.7)


(2.4)


(31.3)


(3.1)


(59.9)











(129.0)


(188.9)Pre-tax income (loss)


93.7


19.8


50.5


224.1


71.9


460.0


140.3


9.7


(3.4)


(254.9)


351.7Income taxes
































119.5Net earnings
































471.2Attributable to:Shareholders of Fairfax
































469.0Non-controlling interests
































2.2471.2   (1)
    
    Comprised of the $83.1 excess of the fair value of net assets
    acquired over the purchase price related to the acquisition of
    GFIC, partially offset by the Runoff operating loss of $38.3.  Year
    ended December 31, 2009
  OtherReinsurance





OtherFairfax



and

Ongoing



(animal



Corporate &Northbridge

U.S.

Asia

OdysseyRe

Insurance

Operations

Runoff

nutrition)

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




















(98.0)











(98.0)Other (animal nutrition)























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)Net earnings
































990.7Attributable to:Shareholders of Fairfax
































856.8Non-controlling interests
































133.9990.7




---



##### 



Year
    ended December 31, 2008
  OtherReinsurance





OtherFairfax



and

Ongoing



(animal



Corporate &Northbridge

U.S.

Asia

OdysseyRe

Insurance

Operations

Runoff

nutrition)

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




















(107.2)











(107.2)Other (animal nutrition)























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)Net earnings
































1,688.7Attributable to:Shareholders of Fairfax
































1,473.8Non-controlling interests
































214.91,688.7   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 (at
    December 31, 2009), Zenith National 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, Zenith National,
    OdysseyRe, Advent, Polish Re, Runoff 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
    $1,659.9 ($1,412.4 at December 31, 2009) Corporate and
    Other long term debt as at December 31, 2010 consisted
    primarily of Fairfax debt of $1,498.1 ($1,236.9 at
    December 31, 2009), other long term obligations consisting
    of TIG trust preferred securities of $9.1 ($9.1 at
    December 31, 2009) and purchase consideration payable of
    $158.6 ($164.4 at December 31, 2009) related to the TRG
    acquisition (see note 11 to the consolidated financial
    statements).




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Segmented
    Balance Sheet as at December 31, 2010
  OtherReinsuranceFairfax





and


Operating





Other (animal


CorporateNorthbridge


U.S.


Asia


OdysseyRe


Insurance


Companies


Runoff


nutrition)


& Other


ConsolidatedAssetsHolding company cash, short term investments and marketable
    securities


36.6



13.5







39.9







90.0











1,450.7



1,540.7Accounts receivable and other


377.7



347.4



87.1



669.0



172.3



1,653.5



108.4



38.3



2.1



1,802.3Income taxes receivable


98.4



35.4







50.5



2.8



187.1



5.8







23.9



216.8Recoverable from reinsurers


1,119.5



1,145.6



278.5



1,113.3



132.3



3,789.2



1,103.6







(899.0
)


3,993.8Portfolio investments


3,302.3



4,491.4



693.2



8,400.5



1,741.1



18,628.5



2,998.6



1.1



353.6



21,981.8Deferred premium acquisition costs


125.0



53.9



16.1



136.3



25.7



357.0















357.0Future income taxes


26.9



93.7







192.5



35.0



348.1



597.8



1.7



(433.2
)


514.4Premises and equipment


12.1



48.0



7.7



8.0



5.8



81.6



1.3



85.2



29.5



197.6Goodwill and intangible assets


233.7



511.1



5.5



156.0



18.4



924.7







21.9



2.5



949.1Due from affiliates


235.5







1.7



192.5



0.1



429.8



17.7







(447.5
)


Other assets


41.4



38.5







30.7



1.8



112.4



27.8



50.8



(6.3
)


184.7Investments in Fairfax affiliates


34.8



133.9







227.6



72.9



469.2



240.6







(709.8
)


Total assets


5,643.9



6,912.4



1,089.8



11,216.8



2,208.2



27,071.1



5,101.6



199.0



(633.5
)


31,738.2LiabilitiesSubsidiary indebtedness






























2.2







2.2Accounts payable and accrued liabilities


205.4



183.1



148.6



345.2



71.5



953.8



157.2



48.1



110.5



1,269.6Income taxes payable










8.6



20.9



0.4



29.9



2.0



0.3



(6.8
)


25.4Short sale and derivative obligations


41.5



4.1



10.1



99.8







155.5







0.2



61.2



216.9Due to affiliates






3.9











0.5



4.4











(4.4
)


Funds withheld payable to reinsurers


37.8



266.1



37.9



43.9







385.7



19.7







(42.2
)


363.2Provision for claims


2,936.5



3,699.7



347.6



5,809.7



1,126.0



13,919.5



3,137.2







(786.4
)


16,270.3Unearned premiums


718.7



457.5



137.2



662.8



217.2



2,193.4



27.0







(99.5
)


2,120.9Future income taxes


1.2



8.4



2.6







0.3



12.5







22.4



(34.9
)


Long term debt






344.8







485.2



93.0



923.0



143.8



0.6



1,659.9



2,727.3Total liabilities


3,941.1



4,967.6



692.6



7,467.5



1,508.9



18,577.7



3,486.9



73.8



857.4



22,995.8EquityShareholders equity attributable to shareholders of Fairfax


1,702.8



1,944.8



392.4



3,749.3



699.3



8,488.6



1,614.7



125.2



(1,531.9
)


8,696.6Non-controlling interests










4.8











4.8











41.0



45.8Total equity


1,702.8



1,944.8



397.2



3,749.3



699.3



8,493.4



1,614.7



125.2



(1,490.9
)


8,742.4Total liabilities and total equity


5,643.9



6,912.4



1,089.8



11,216.8



2,208.2



27,071.1



5,101.6



199.0



(633.5
)


31,738.2CapitalDebt






344.8







485.2



93.0



923.0



143.8



0.6



1,659.9



2,727.3Non-controlling interests










4.8











4.8







41.0







45.8Investments in Fairfax affiliates


34.8



133.9







227.6



72.9



469.2



240.6







(709.8
)


Shareholders equity attributable to shareholders of Fairfax


1,668.0



1,810.9



392.4



3,521.7



626.4



8,019.4



1,374.1



84.2



(781.1
)


8,696.6Total capital


1,702.8



2,289.6



397.2



4,234.5



792.3



9,416.4



1,758.5



125.8



169.0



11,469.7% of total capital


14.8
%


20.0
%


3.5
%


36.9
%


6.9
%


82.1
%


15.3
%


1.1
%


1.5
%


100.0
%




---



##### 



Segmented
    Balance Sheet as at December 31, 2009
  OtherReinsuranceFairfax





and


Operating





Other (animal


CorporateNorthbridge


U.S.


Asia


OdysseyRe


Insurance


Companies


Runoff


nutrition)


& 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


377.3



206.2



54.6



733.9



153.4



1,525.4



229.2



39.1



11.3



1,805.0Income taxes receivable


18.1















5.2



23.3







0.1



27.0



50.4Recoverable from reinsurers


1,130.5



927.3



170.3



1,025.0



88.9



3,342.0



1,378.0







(901.4
)


3,818.6Portfolio 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



50.1



13.5



161.8



24.2



372.0















372.0Future 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



5,044.1



807.6



10,866.5



2,004.0



23,957.4



4,914.6



205.1



(625.1
)


28,452.0LiabilitiesSubsidiary indebtedness






























12.1







12.1Accounts payable and accrued liabilities


166.2



152.2



105.1



434.4



25.9



883.8



177.2



45.5



131.6



1,238.1Income taxes payable


10.0



11.1



7.5



31.5







60.1



1.2



0.1



9.5



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







(790.2
)


14,766.7Unearned premiums


713.8



297.8



116.6



691.2



196.2



2,015.6











(101.8
)


1,913.8Future income taxes


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



3,690.7



475.8



7,249.5



1,430.6



16,571.1



3,472.6



81.4



590.3



20,715.4EquityShareholders equity attributable to shareholders of Fairfax


1,510.7



1,353.4



327.8



3,617.0



573.4



7,382.3



1,442.0



123.7



(1,329.0
)


7,619.0Non-controlling interests










4.0











4.0











113.6



117.6Total equity


1,510.7



1,353.4



331.8



3,617.0



573.4



7,386.3



1,442.0



123.7



(1,215.4
)


7,736.6Total liabilities and total equity


5,235.2



5,044.1



807.6



10,866.5



2,004.0



23,957.4



4,914.6



205.1



(625.1
)


28,452.0CapitalDebt






307.5







487.0



94.2



888.7







0.6



1,412.4



2,301.7Non-controlling interests










4.0



69.1







73.1







44.5







117.6Investments in Fairfax affiliates


33.0



104.5







138.5



69.1



345.1



309.6







(654.7
)


Shareholders equity attributable to shareholders of Fairfax


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



331.8



4,104.0



667.6



8,275.0



1,442.0



124.3



197.0



10,038.3% of total capital


15.0
%


16.6
%


3.3
%


40.9
%


6.6
%


82.4
%


14.4
%


1.2
%


2.0
%


100.0
%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Holding company cash, short term investments and marketable
    securities
  start-up
  Accounts receivable and other
  Recoverable from reinsurers
  Income taxes receivable
  Portfolio investments




---



##### 



mark-to-market
  Future income taxes
        Goodwill and intangible assets
  Provision for claims




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Non-controlling interests
  Components
    of Net Earnings
  Underwriting
    and Operating Income
    Canadian
    Insurance 
    Northbridge(1)
  2010


2009


2008Underwriting profit (loss)


(72.4
)


(57.1
)


(37.9
)Combined ratioLoss & LAE


74.8
%


75.7
%


75.2
%Commissions


12.0
%


11.8
%


10.7
%Underwriting expense


20.5
%


18.4
%


17.6
%107.3
%


105.9
%


103.5
%Gross premiums written


1,299.9



1,250.5



1,452.1Net premiums written


985.0



928.7



1,099.5Net premiums earned


996.6



969.2



1,076.1Underwriting profit (loss)


(72.4
)


(57.1
)


(37.9
)Interest and dividends


125.8



113.0



107.9Operating income


53.4



55.9



70.0Net gains on investments


55.7



94.4



25.7Pre-tax income before interest and other


109.1



150.3



95.7Net earnings


80.7



91.8



45.7    (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
    2010 and 2009 underwriting loss and combined ratio were $66.4
    and $51.7, and 106.7% and 105.3% respectively.




---



##### 



small-to-medium small-to-medium
  small-to-medium year-over-year small-to-medium
    mark-to-market mark-to-market year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      year-over-year
        2010

2009AssetsHolding company cash, short term investments and marketable
    securities


36.6



27.4Accounts receivable and other


377.7



377.3Income taxes receivable


98.4



18.1Recoverable from reinsurers


1,119.5



1,130.5Portfolio investments


3,302.3



3,186.6Deferred premium acquisition costs


125.0



122.4Future income taxes


26.9



18.4Premises and equipment


12.1



12.1Goodwill and intangible assets


233.7



219.8Due from affiliates


235.5



78.7Other assets


41.4



10.9Investment in Fairfax affiliates


34.8



33.0Total assets


5,643.9



5,235.2LiabilitiesAccounts payable and accrued liabilities


205.4



166.2Income taxes payable






10.0Short sales and derivative obligations


41.5



Funds withheld payable to reinsurers


37.8



30.6Provision for claims


2,936.5



2,802.2Unearned premiums


718.7



713.8Future income taxes


1.2



1.7Total liabilities


3,941.1



3,724.5Total equity


1,702.8



1,510.7Total liabilities and total equity


5,643.9



5,235.2




---



##### 



Affiliate

% interestRidley


31.8   U.S.
    Insurance
  2010


2009


2008Crum &


Zenith





Crum &


Crum &Forster


National(1)


Total


Forster(1)


Forster(1)Underwriting profit (loss)


(66.5
)


(101.7
)


(168.2
)


(32.0
)


(177.2
)Combined ratioLoss & LAE


74.3
%


89.2
%


78.3
%


69.2
%


85.8
%Commissions


12.1
%


9.9
%


11.5
%


11.8
%


12.0
%Underwriting expense


22.7
%


38.7
%


27.0
%


23.1
%


19.8
%109.1
%


137.8
%


116.8
%


104.1
%


117.6
%Gross premiums written


886.0



192.3



1,078.3



863.8



1,019.6Net premiums written


733.4



186.1



919.5



716.4



878.2Net premiums earned


731.2



268.9



1,000.1



781.3



1,005.0Underwriting profit (loss)


(66.5
)


(101.7
)


(168.2
)


(32.0
)


(177.2
)Interest and dividends


74.1



29.8



103.9



113.9



86.2Operating income (loss)


7.6



(71.9
)


(64.3
)


81.9



(91.0
)Net gains on investments


92.4



30.1



122.5



229.1



605.7Pre-tax income (loss) before interest and other


100.0



(41.8
)


58.2



311.0



514.7Net earnings (loss)


64.2



(24.0
)


40.2



212.7



315.1    (1)
    
    These results differ from those published by Crum &
    Forster Holdings Corp. and Zenith National, primarily due to
    differences between Canadian and US GAAP and purchase accounting
    adjustments recorded by Fairfax related to the acquisition of
    Zenith National.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Crum &
    Forster
  year-over-year
    year-over-year




---



##### 



year-over-year
  mark-to-market mark-to-market year-over-year
  year-over-year
      year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Zenith
    National
    mark-to-market




---



##### 



2010


2009Crum &


Zenith





Crum &Forster


National(1)


Total


Forster(1)AssetsHolding company cash, short term investments and marketable
    securities


1.4



12.1



13.5



2.5Accounts receivable and other


185.4



162.0



347.4



206.2Income taxes receivable


28.8



6.6



35.4



Recoverable from reinsurers


925.6



220.0



1,145.6



927.3Portfolio investments


2,920.3



1,571.1



4,491.4



3,639.1Deferred premium acquisition costs


49.6



4.3



53.9



50.1Future income taxes


93.7







93.7



72.8Premises and equipment


7.5



40.5



48.0



6.9Goodwill and intangible assets


22.8



488.3



511.1



20.9Other assets


13.1



25.4



38.5



13.8Investments in Fairfax affiliates


133.9







133.9



104.5Total assets


4,382.1



2,530.3



6,912.4



5,044.1LiabilitiesAccounts payable and accrued liabilities


126.0



57.1



183.1



152.2Income taxes payable














11.1Short sales and derivative obligations


4.1







4.1



Due to affiliates


2.6



1.3



3.9



1.5Funds withheld payable to reinsurers


266.1







266.1



248.2Provision for claims


2,526.3



1,173.4



3,699.7



2,672.4Unearned premiums


295.8



161.7



457.5



297.8Future income taxes






8.4



8.4



Long term debt


306.8



38.0



344.8



307.5Total liabilities


3,527.7



1,439.9



4,967.6



3,690.7Total equity


854.4



1,090.4



1,944.8



1,353.4Total liabilities and total equity


4,382.1



2,530.3



6,912.4



5,044.1    (1)
    
    These balance sheets differ from those published by
    Crum & Forster Holdings Corp. and Zenith National,
    primarily due to differences between Canadian and US GAAP and
    purchase accounting adjustments (principally goodwill and
    intangible assets) which arose on the acquisition of Zenith
    National. Excluding these purchase accounting adjustments,
    Zenith Nationals Canadian GAAP total equity was $687.2 at
    December 31, 2010.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Affiliate

% interestTRG Holdings


1.4Advent


17.5OdysseyRe


8.8Zenith National


2.0     Asian
    Insurance  Fairfax Asia
  2010


2009


2008Underwriting profit


16.6



20.2



6.9Combined ratioLoss & LAE


77.6
%


73.1
%


81.5
%Commissions


1.4
%


(1.7
)%


(6.6
)%Underwriting expense


10.3
%


11.2
%


16.9
%89.3
%


82.6
%


91.8
%Gross premiums written


353.2



285.8



227.0Net premiums written


157.4



127.9



86.5Net premiums earned


155.0



116.0



84.6Underwriting profit


16.6



20.2



6.9Interest and dividends


39.8



9.0



1.6Operating income


56.4



29.2



8.5Net gains (losses) on investments


(3.5
)


17.8



3.0Pre-tax income before interest and other


52.9



47.0



11.5Net earnings


46.0



39.6



1.5     mark-to-market




---



##### 



year-over-year
      (www.icicilombard.com)
    2010


2009AssetsAccounts receivable and other


87.1



54.6Recoverable from reinsurers


278.5



170.3Portfolio investments


693.2



554.4Deferred premium acquisition costs


16.1



13.5Premises and equipment


7.7



7.5Goodwill and intangible assets


5.5



5.5Due from affiliates


1.7



1.8Total assets


1,089.8



807.6LiabilitiesAccounts payable and accrued liabilities


148.6



105.1Income taxes payable


8.6



7.5Short sales and derivative obligations


10.1



Funds withheld payable to reinsurers


37.9



25.0Provision for claims


347.6



218.0Unearned premiums


137.2



116.6Future income taxes


2.6



3.6Total liabilities


692.6



475.8Total equity


397.2



331.8Total liabilities and total equity


1,089.8



807.6




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Reinsurance 
    OdysseyRe(1)
  2010


2009


2008Underwriting profit (loss)


25.8



64.3



(27.7
)Combined ratioLoss & LAE


69.8
%


67.6
%


72.7
%Commissions


18.4
%


19.5
%


20.1
%Underwriting expense


10.4
%


9.6
%


8.5
%98.6
%


96.7
%


101.3
%Gross premiums written


2,167.3



2,195.0



2,294.5Net premiums written


1,853.8



1,893.8



2,030.8Net premiums earned


1,885.7



1,927.4



2,076.4Underwriting profit (loss)


25.8



64.3



(27.7
)Interest and dividends


288.9



283.6



250.3Operating income


314.7



347.9



222.6Net gains (losses) on investments


(28.8
)


353.6



740.1Pre-tax income before interest and other


285.9



701.5



962.7Net earnings


225.3



486.9



613.9    (1)
    
    These results differ from those published by Odyssey Re
    Holdings Corp. primarily due to differences between Canadian and
    US GAAP and purchase accounting adjustments recorded by Fairfax
    related to the privatization of OdysseyRe.    year-over-year




---



##### 



year-over-year
  year-over-year
  mark-to-market mark-to-market




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      year-over-year
      2010(1)


2009(1)AssetsHolding company cash, short term investments and marketable
    securities


39.9



83.0Accounts receivable and other


669.0



733.9Income taxes receivable


50.5



Recoverable from reinsurers


1,113.3



1,025.0Portfolio investments


8,400.5



8,433.8Deferred premium acquisition costs


136.3



161.8Future income taxes


192.5



93.4Premises and equipment


8.0



11.5Goodwill and intangible assets


156.0



152.4Due from affiliates


192.5



Other assets


30.7



33.2Investments in Fairfax affiliates


227.6



138.5Total assets


11,216.8



10,866.5LiabilitiesAccounts payable and accrued liabilities


345.2



434.4Income taxes payable


20.9



31.5Short sale and derivative obligations


99.8



40.8Due to affiliates






13.0Funds withheld payable to reinsurers


43.9



43.8Provision for claims


5,809.7



5,507.8Unearned premiums


662.8



691.2Long term debt


485.2



487.0Total liabilities


7,467.5



7,249.5Total equity


3,749.3



3,617.0Total liabilities and total equity


11,216.8



10,866.5    (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 total equity was $3,643.6 at
    December 31, 2010 ($3,512.6 at December 31, 2009).




---



##### 



Affiliate

% interestTRG Holdings


13.0Fairfax Asia


26.2Advent


21.7Zenith National


6.2     Reinsurance
    and Insurance  Other




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      2010


2009Fairfax


Inter-














InterGroup Re


Advent(1)


Polish Re


Brasil


company


Total


Group Re


Advent(1)


Polish Re


company


TotalUnderwriting profit (loss)


(8.2
)


(18.0
)


(3.0
)


(9.2
)






(38.4
)


(10.3
)


21.6



0.6







11.9Combined ratioLoss & LAE


76.9
%


69.4
%


79.3
%










74.4
%


77.5
%


71.2
%


76.3
%






74.4
%Commissions


24.8
%


22.9
%


17.0
%










23.0
%


25.2
%


14.1
%


18.4
%






19.2
%Underwriting expense


1.6
%


16.1
%


8.1
%










9.8
%


1.3
%


7.2
%


4.5
%






4.5
%103.3
%


108.4
%


104.4
%










107.2
%


104.0
%


92.5
%


99.2
%






98.1
%Gross premiums written


243.3



318.9



81.7



35.0



(50.9
)


628.0



263.7



386.1



88.4



(49.9
)


688.3Net premiums written


243.3



214.3



68.2



4.7







530.5



263.7



277.0



79.1







619.8Net premiums earned


250.8



214.8



69.6



0.8







536.0



255.2



289.6



83.3







628.1Underwriting profit (loss)


(8.2
)


(18.0
)


(3.0
)


(9.2
)






(38.4
)


(10.3
)


21.6



0.6







11.9Interest and dividends


24.4



16.7



3.0



0.9







45.0



15.6



17.8



4.1







37.5Operating income (loss)


16.2



(1.3
)






(8.3
)






6.6



5.3



39.4



4.7







49.4Net gains (losses) on investments


59.2



5.2



6.0



2.5







72.9



(22.5
)


(11.0
)


7.7







(25.8
)Pre-tax income (loss) before interest and other


75.4



3.9



6.0



(5.8
)






79.5



(17.2
)


28.4



12.4







23.6Net earnings (loss)


75.1



(2.0
)


6.1



(6.3
)






72.9



(14.2
)


6.7



11.3







3.8   2008Group Re


Advent(1)


TotalUnderwriting profit (loss)


(22.7
)


(22.3
)


(45.0
)Combined ratioLoss & LAE


79.3
%


96.3
%


84.3
%Commissions


30.6
%


23.8
%


28.6
%Underwriting expense


2.0
%


8.1
%


3.7
%111.9
%


128.2
%


116.6
%Gross premiums written


185.4



60.4



245.8Net premiums written


185.5



40.6



226.1Net premiums earned


190.8



78.8



269.6Underwriting profit (loss)


(22.7
)


(22.3
)


(45.0
)Interest and dividends


22.4



7.7



30.1Operating income (loss)


(0.3
)


(14.6
)


(14.9
)Net gains (losses) on investments


40.5



(12.4
)


28.1Pre-tax income (loss) before interest and other


40.2



(27.0
)


13.2Net earnings (loss)


49.2



(20.2
)


29.0    (1)
    
    These results for Advent differ from those published by
    Advent Capital (Holdings) PLC primarily due to differences in
    classification between Canadian GAAP and IFRS as adopted by the
    European Union.




---



##### 



reinsurance-to-close start-up mark-to-market mark-to-market




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    reinsurance-to-close
    2010


2009Fairfax


Inter-














Inter-Group Re


Advent(1)


Polish Re


Brasil


company


Total


Group Re


Advent(1)


Polish Re


company


TotalAssetsAccounts receivable and other


51.2



102.0



13.9



18.2



(13.0
)


172.3



53.9



100.7



15.6



(16.8
)


153.4Income taxes receivable






2.5



0.3











2.8







5.2











5.2Recoverable from reinsurers


0.4



149.7



18.0



29.8



(65.6
)


132.3



0.4



99.9



14.6



(26.0
)


88.9Portfolio investments


966.5



582.5



139.3



52.8







1,741.1



821.0



638.9



142.3







1,602.2Deferred premium acquisition costs


5.0



12.7



5.9



2.1







25.7



3.9



13.5



6.8







24.2Future income taxes






34.8



0.1



0.1







35.0







29.9











29.9Premises and equipment






3.8



1.6



0.4







5.8







0.4



1.6







2.0Goodwill and intangible assets






4.3



13.9



0.2







18.4







4.3



14.4







18.7Due from affiliates










0.1











0.1



9.2















9.2Other assets






1.8















1.8







1.2











1.2Investments in Fairfax affiliates


72.9



















72.9



69.1















69.1Total assets


1,096.0



894.1



193.1



103.6



(78.6
)


2,208.2



957.5



894.0



195.3



(42.8
)


2,004.0LiabilitiesAccounts payable and accrued liabilities


0.3



37.1



2.5



31.6







71.5



0.6



18.5



6.8







25.9Income taxes payable


0.2







0.2











0.4



















Due to affiliates


0.5



















0.5











0.3







0.3Funds withheld payable to reinsurers






18.4











(18.4
)










39.2



0.1



(18.1
)


21.2Provision for claims


550.1



535.2



86.2



8.8



(54.3
)


1,126.0



509.6



520.1



78.1



(17.0
)


1,090.8Unearned premiums


112.4



60.7



23.3



26.7



(5.9
)


217.2



114.6



63.0



26.3



(7.7
)


196.2Future income taxes










0.3











0.3











2.0







2.0Long term debt






93.0















93.0







94.2











94.2Total liabilities


663.5



744.4



112.5



67.1



(78.6
)


1,508.9



624.8



735.0



113.6



(42.8
)


1,430.6Total equity


432.5



149.7



80.6



36.5







699.3



332.7



159.0



81.7







573.4Total liabilities and total equity


1,096.0



894.1



193.1



103.6



(78.6
)


2,208.2



957.5



894.0



195.3



(42.8
)


2,004.0    (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 total equity was $156.4 at December 31, 2010 ($165.6
    at December 31, 2009).




---



##### 



Affiliate

% interestNorthbridge


1.5Advent


18.8Ridley


26.0   Runoff
      2010


2009


2008Gross premiums written


2.8



1.1



12.6Net premiums written


2.8



(0.5
)


11.1Net premiums earned


7.2







17.4Losses on claims


(43.5
)


(57.6
)


(83.2
)Operating expenses


(80.5
)


(94.8
)


(109.6
)Interest and dividends


78.5



54.4



68.2Operating loss


(38.3
)


(98.0
)


(107.2
)Net gains on investments


98.7



129.2



499.8Pre-tax income before interest and other


60.4



31.2



392.6Excess of fair value of net assets acquired over purchase price


83.1







Pre-tax income


143.5



31.2



392.6   year-over-year




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    mark-to-market mark-to-market




---



##### 



2010


2009AssetsAccounts receivable and other


108.4



229.2Income taxes receivable


5.8



Recoverable from reinsurers


1,103.6



1,378.0Portfolio investments


2,998.6



2,413.8Future income taxes


597.8



552.7Premises and equipment


1.3



1.4Due from affiliates


17.7



4.8Other assets


27.8



25.1Investments in Fairfax affiliates


240.6



309.6Total assets


5,101.6



4,914.6LiabilitiesAccounts payable and accrued liabilities


157.2



177.2Income taxes payable


2.0



1.2Short sale and derivative obligations






7.2Funds withheld payable to reinsurers


19.7



21.3Provision for claims


3,137.2



3,265.7Unearned premiums


27.0



Long term debt


143.8



Total liabilities


3,486.9



3,472.6Total equity


1,614.7



1,442.0Total liabilities and total equity


5,101.6



4,914.6




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Affiliate

% interestOdysseyRe


19.0Advent


20.8TRG Holdings


8.0   Other
    (animal
    nutrition)(1)
  2010


2009


2008Revenue


549.1



556.4



99.4Costs and expenses


(538.8
)


(544.0
)


(98.0
)Pre-tax income before interest and other


10.3



12.4



1.4Interest expense


(0.6
)


(1.0
)


(0.4
)Pre-tax income


9.7



11.4



1.0    (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.        Interest
    and Dividends




---



##### 



Net Gains
    on Investments
    2010


2009


2008Net gains (losses) on investments:Common stocks


476.5



239.0



35.7Equity derivatives


(755.9
)


224.3



2,061.1Bonds


573.9



937.9



218.9Preferred stocks


(13.8
)


26.6



3.0Other derivatives


26.4



(147.2
)


1,305.7Partial disposition of investee company


77.9







Provisions for other than temporary impairments


(33.7
)


(340.0
)


(1,011.8
)Foreign currency


(178.2
)


(17.6
)


(45.4
)Other


15.4



21.5



3.5188.5



944.5



2,570.7   mark-to-market mark-to-market mark-to-market mark-to-market




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        mark-to-market mark-to-market
      mark-to-market




---



##### 



Interest
    Expense
        2010


2009


2008Fairfax


125.9



101.4



89.1Crum & Forster


28.2



27.8



28.3Zenith National


2.5







OdysseyRe


30.5



31.0



34.2Cunningham Lindsey










4.0Advent


4.5



5.1



2.6Runoff (TIG)


3.2







Ridley


0.6



1.0



0.4195.4



166.3



158.6   Corporate
    Overhead and Other
    2010


2009


2008Fairfax corporate overhead


83.9



88.3



94.7Subsidiary holding companies corporate overhead


59.9



64.3



44.6Holding company interest and dividends


(14.8
)


(36.4
)


(28.8
)Holding company net (gains) losses on investments


125.6



(147.3
)


(689.1
)Investment management and administration fees


(65.7
)


(64.9
)


(53.3
)188.9



(96.0
)


(631.9
)   mark-to-market




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Income
    Taxes
        Non-controlling
    Interests
    2010


2009


2008OdysseyRe






128.8



209.3Northbridge






2.7



18.4Ridley


1.3



0.3



0.2Advent






0.8



(13.6
)Fairfax Asia


0.9



1.3



0.62.2



133.9



214.9




---



##### 



Provision
    for Claims




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Favourable/(Unfavourable)2010


2009Insurance      Canada
    (Northbridge)


1.2



14.1 U.S.
    (Crum & Forster)


(11.3
)


25.0 Asia
    (Fairfax Asia)


10.0



8.1Reinsurance  OdysseyRe


3.6



11.3Reinsurance and Insurance  Other


32.4



(31.2
)Insurance and reinsurance operating companies


35.9



27.3Runoff


(50.6
)


(57.6
)Net reserve development


(14.7
)


(30.3
)     Reconciliation
    of Provision for Claims and LAE as at December 31
  2010


2009


2008


2007


2006Insurance subsidiaries owned throughout the year


3,849.0



3,810.4



3,716.3



3,478.3



3,184.0Insurance subsidiaries acquired during the
    year(1)


964.3















Total insurance subsidiaries


4,813.3



3,810.4



3,716.3



3,478.3



3,184.0Reinsurance subsidiaries owned throughout the
    year(2)


5,906.9



5,629.6



4,964.3



5,051.5



4,986.7Reinsurance subsidiaries acquired during the
    year(3)






68.4



372.9







Total reinsurance subsidiaries


5,906.9



5,698.0



5,337.2



5,051.5



4,986.7Runoff subsidiaries owned throughout the year


1,700.6



1,956.7



1,989.9



2,116.5



2,487.9Runoff subsidiaries acquired during the
    year(4)


394.4















Total runoff subsidiaries


2,095.0



1,956.7



1,989.9



2,116.5



2.487.9Net provision for claims and LAE


12,815.2



11,465.1



11,043.4



10,646.3



10,658.6Reinsurance
    gross-up


3,455.1



3,301.6



3,685.0



4,401.8



4,843.7Gross provision for claims and LAE


16,270.3



14,766.7



14,728.4



15,048.1



15,502.3   (1)
    
    Zenith National in 2010.(2)
    
    Including Group Re.(3)
    
    Polish Re in 2009 and Advent in 2008.(4)
    
    GFIC and Syndicate 2112 in 2010.




---



##### 



Canadian
    Insurance  Northbridge
    Reconciliation
    of Provision for Claims  Northbridge
  2010


2009


2008


2007


2006(In Cdn$ except as indicated)Provision for claims and LAE at January 1


1,973.3



1,931.8



1,696.0



1,640.2



1,408.7Incurred losses on claims and LAEProvision for current accident years claims


769.2



849.4



925.3



778.4



780.8Foreign exchange effect on claims


(7.9
)


(36.6
)


59.2



(46.8
)


0.8Increase (decrease) in provision for prior accident years
    claims


(1.3
)


(16.0
)


(67.1
)


(31.5
)


54.1Total incurred losses on claims and LAE


760.0



796.8



917.4



700.1



835.7Payments for losses on claims and LAEPayments on current accident years claims


(266.3
)


(272.3
)


(298.6
)


(267.9
)


(251.1
)Payments on prior accident years claims


(472.7
)


(483.0
)


(383.0
)


(376.4
)


(353.1
)Total payments for losses on claims and LAE


(739.0
)


(755.3
)


(681.6
)


(644.3
)


(604.2
)Provision for claims and LAE at December 31


1,994.3



1,973.3



1,931.8



1,696.0



1,640.2Exchange rate


1.0064



0.9539



0.8100



1.0132



0.8593Provision for claims and LAE at December 31 converted to U.S.
    dollars


2,007.0



1,882.3



1,564.8



1,718.4



1,409.5




---



##### 



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

2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010(In Cdn$)Provision for claims including LAE


585.5



621.9



728.9



855.4



1,153.9



1,408.7



1,640.2



1,696.0



1,931.8



1,973.3



1,994.3Cumulative payments as of:One year later


223.7



200.7



273.7



233.4



279.1



353.1



376.4



383.0



483.0



472.7Two years later


333.8



366.6



396.9



377.9



441.8



594.2



619.5



656.0



796.8Three years later


458.2



451.4



500.1



493.3



576.0



777.3



835.4



887.0Four years later


525.3



527.2



577.1



585.1



707.7



937.7



1,000.9Five years later


573.9



580.6



632.3



671.0



803.4



1,055.5Six years later


609.0



616.3



687.0



729.7



878.5Seven years later


634.3



654.4



722.3



778.9Eight years later


660.5



677.3



753.3Nine years later


676.7



701.5Ten years later


697.3Reserves re-estimated as of:One year later


617.9



630.1



724.8



864.8



1,114.6



1,461.7



1,564.3



1,674.0



1,883.8



1,965.8Two years later


634.3



672.3



792.1



880.8



1,094.0



1,418.1



1,545.4



1,635.1



1,901.2Three years later


673.9



721.8



812.2



890.1



1,096.7



1,412.5



1,510.3



1,635.1Four years later


717.2



741.6



826.9



903.2



1,107.2



1,400.2



1,507.9Five years later


724.5



752.2



836.6



924.4



1,117.7



1,398.4Six years later


734.8



762.1



857.9



935.0



1,124.7Seven years later


743.2



780.4



862.7



945.3Eight years later


756.8



784.7



876.1Nine years later


766.8



803.0Ten years later


785.6Favourable (unfavourable) development


(200.1
)


(181.1
)


(147.2
)


(89.9
)


29.2



10.3



132.3



60.9



30.6



7.5   small-to-medium




---



##### 



Northbridges
    Accident Year Claims Reserve Development
  Accident year2000 &As at December 31

Prior


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010(In Cdn$)End of first year


585.5



227.7



299.5



404.2



522.4



573.1



531.6



508.1



640.8



572.4



501.2One year later


617.9



219.6



253.3



346.4



467.2



646.8



499.2



505.1



631.7



547.6Two years later


634.3



222.1



271.0



342.3



437.2



600.5



485.9



501.3



649.1Three years later


673.9



228.4



271.3



336.9



426.9



584.4



463.2



503.5Four years later


717.2



240.9



275.4



340.3



416.2



561.6



462.5Five years later


724.5



241.2



275.2



340.2



416.1



552.8Six years later


734.8



242.6



278.3



346.0



412.8Seven years later


743.2



247.3



278.6



342.9Eight years later


756.8



241.7



273.9Nine years later


766.8



241.1Ten years later


785.6Favourable (unfavourable) development


(34.2)%



(5.9)%



8.5%



15.2%



21.0%



3.5%



13.0%



0.9%



(1.3)%



4.3%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    U.S.
    Insurance
    Reconciliation
    of Provision for Claims  U.S. Insurance
  2010


2009


2008


2007


2006Provision for claims and LAE at January 1


1,789.4



2,038.3



1,668.9



1,686.9



1,756.7Transfer of Fairmont to
    Runoff(1)


















(146.2
)Incurred losses on claims and LAEProvision for current accident years claims


532.3



566.0



802.8



816.8



762.2Increase (decrease) in provision for prior accident years
    claims


11.3



(25.0
)


59.0



(46.6
)


(48.9
)Total incurred losses on claims and LAE


543.6



541.0



861.8



770.2



713.3Payments for losses on claims and LAEPayments on current accident years
    claims(2)


(143.4
)


(157.0
)


(228.3
)


(217.2
)


(158.0
)Payments on prior accident years claims


(550.6
)


(632.9
)


(264.1
)


(571.0
)


(478.9
)Total payments for losses on claims and LAE


(694.0
)


(789.9
)


(492.4
)


(788.2
)


(636.9
)Provision for claims and LAE at December 31 before the undernoted


1,639.0



1,789.4



2,038.3



1,668.9



1,686.9Insurance subsidiaries acquired during the
    year(3)


964.3















Provision for claims and LAE at December 31


2,603.3



1,789.4



2,038.3



1,668.9



1,686.9   (1)
    
    Crum & Forster transferred the Fairmont entities to
    U.S. runoff in 2006.(2)
    
    Reduced by $302.5 of proceeds from a significant reinsurance
    commutation in 2008.(3)
    
    Zenith National in 2010.




---



##### 



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

2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010Provision for claims including LAE


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



1,789.4



1,639.0Cumulative payments as of:One year later


667.2



447.0



161.3



460.0



466.0



478.9



571.0



264.1



632.9



550.6Two years later


1,012.2



525.0



514.5



792.2



796.7



848.7



629.2



649.0



1,033.9Three years later


1,083.8



812.4



780.0



1,045.1



1,066.1



804.7



904.3



956.4Four years later


1,311.1



1,029.8



970.2



1,257.1



959.6



1,013.8



1,139.1Five years later


1,483.6



1,185.5



1,144.6



1,111.5



1,118.3



1,195.1Six years later


1,613.9



1,337.6



960.8



1,241.7



1,265.4Seven years later


1,739.9



1,137.6



1,064.1



1,370.8Eight years later


1,531.6



1,232.6



1,167.8Nine years later


1,617.9



1,329.7Ten years later


1,707.1Reserves re-estimated as of:One year later


1,691.0



1,337.7



1,278.6



1,508.1



1,546.9



1,561.7



1,640.3



1,727.9



2,013.3



1,800.7Two years later


1,708.3



1,411.7



1,285.9



1,536.0



1,509.2



1,525.3



1,716.5



1,692.4



2,015.5Three years later


1,754.8



1,420.7



1,308.2



1,513.3



1,499.7



1,640.4



1,700.3



1,711.8Four years later


1,765.2



1,438.6



1,296.8



1,545.5



1,616.7



1,653.0



1,732.0Five years later


1,779.1



1,437.0



1,330.0



1,674.8



1,658.2



1,688.5Six years later


1,794.1



1,469.0



1,457.2



1,719.4



1,687.3Seven years later


1,816.6



1,592.4



1,472.9



1,746.8Eight years later


1,945.5



1,607.5



1,488.8Nine years later


1,957.5



1,623.9Ten years later


1,977.6Favourable (unfavourable) development


(241.0
)


(305.7
)


(250.4
)


(208.6
)


(109.1
)


(77.9
)


(45.1
)


(42.9
)


22.8



(11.3
)       Crum &
    Forsters Accident Year Claims Reserve
    Development
  Accident year2000 &As at December 31

Prior


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010End of first year


1,736.6



294.4



347.7



420.9



530.1



529.7



604.2



599.6



574.5



408.9



388.9One year later


1,691.0



296.6



313.9



383.5



470.9



518.5



594.0



582.5



585.1



418.0Two years later


1,708.3



324.1



312.2



389.1



455.9



491.6



555.1



563.0



567.8Three years later


1,754.8



322.8



316.7



377.8



414.2



489.7



526.3



550.9Four years later


1,765.2



326.7



306.8



376.8



401.9



460.8



522.5Five years later


1,779.1



310.1



308.0



378.9



398.8



467.2Six years later


1,794.1



319.6



311.8



407.8



400.5Seven years later


1,816.6



314.2



312.4



419.4Eight years later


1,945.5



317.2



311.9Nine years later


1,957.6



313.5Ten years later


1,977.6Favourable (unfavourable) development


(13.9
)%


(6.5
)%


10.3
%


0.4
%


24.4
%


11.8
%


13.5
%


8.1
%


1.2
%


(2.2
)%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Asian
    Insurance  Fairfax Asia
    Reconciliation
    of Provision for Claims  Fairfax Asia
  2010


2009


2008


2007


2006Provision for claims and LAE at January 1


138.7



113.2



91.0



87.6



74.7Incurred losses on claims and LAEProvision for current accident years claims


130.2



92.8



65.5



43.1



34.7Foreign exchange effect on claims


12.7



2.5



0.1



2.2



2.1Increase (decrease) in provision for prior accident years
    claims


(10.0
)


(8.1
)


3.4



(4.4
)


2.8Total incurred losses on claims and LAE


132.9



87.2



69.0



40.9



39.6Payments for losses on claims and LAEPayments on current accident years claims


(24.0
)


(20.7
)


(15.9
)


(11.0
)


(11.1
)Payments on prior accident years claims


(44.6
)


(41.0
)


(30.9
)


(26.5
)


(15.6
)Total payments for losses on claims and LAE


(68.6
)


(61.7
)


(46.8
)


(37.5
)


(26.7
)Provision for claims and LAE at December 31


203.0



138.7



113.2



91.0



87.6     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

2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010Provision for claims including LAE


11.0



29.6



23.1



25.1



54.7



74.7



87.6



91.0



113.2



138.7



203.0Cumulative payments as of:One year later


5.7



19.0



10.1



7.9



13.3



15.6



26.5



30.9



41.0



44.6Two years later


7.9



26.1



14.1



13.1



21.9



32.6



45.2



49.8



56.5Three years later


9.7



27.9



16.5



15.9



29.1



44.6



56.3



55.8Four years later


10.8



29.1



17.8



17.3



32.6



50.3



58.8Five years later


11.6



29.5



18.2



17.9



33.8



51.1Six years later


11.6



29.7



18.5



18.2



34.2Seven years later


11.7



29.8



18.7



18.3Eight years later


11.7



30.0



18.8Nine years later


11.7



30.0Ten years later


11.7Reserves re-estimated as of:One year later


13.4



32.8



22.4



24.9



59.6



79.6



84.5



94.9



106.0



136.3Two years later


14.1



32.3



22.2



23.1



58.2



72.2



84.1



84.7



100.2Three years later


13.6



32.2



21.3



21.2



49.9



71.8



75.0



79.5Four years later


13.3



31.5



20.5



20.0



48.3



64.7



72.2Five years later


12.8



30.8



19.6



20.0



43.5



63.4Six years later


12.3



30.2



19.8



19.2



42.9Seven years later


11.9



30.4



19.6



19.2Eight years later


11.9



30.4



19.7Nine years later


11.9



30.4Ten years later


11.8Favourable (unfavourable) development


(0.8
)


(0.8
)


3.4



5.9



11.8



11.3



15.4



11.5



13.0



2.4




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Reinsurance 
    OdysseyRe
    Reconciliation
    of Provision for Claims  OdysseyRe
  2010


2009


2008


2007


2006Provision for claims and LAE at January 1


4,666.3



4,560.3



4,475.6



4,403.1



3,865.4Incurred losses on claims and LAEProvision for current accident years claims


1,320.6



1,313.3



1,518.8



1,367.9



1,344.3Foreign exchange effect on claims


46.5



58.8



(143.2
)


26.6



46.6Increase (decrease) in provision for prior accident years
    claims


(3.6
)


(11.3
)


(10.1
)


40.5



185.4Total incurred losses on claims and LAE


1,363.5



1,360.8



1,365.5



1,435.0



1,576.3Payments for losses on claims and LAEPayments on current accident years claims


(184.4
)


(230.6
)


(264.8
)


(251.4
)


(251.3
)Payments on prior accident years claims


(988.2
)


(1,024.2
)


(1,016.0
)


(1,111.1
)


(787.3
)Total payments for losses on claims and LAE


(1,172.6
)


(1,254.8
)


(1,280.8
)


(1,362.5
)


(1,038.6
)Provision for claims and LAE at December 31


4,857.2



4,666.3



4,560.3



4,475.6



4,403.1     OdysseyRes
    Calendar Year Claims Reserve Development
  Calendar yearAs at December 31

2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010Provision for claims including LAE


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



4,666.3



4,857.2Cumulative payments as of:One year later


596.2



616.2



601.8



632.4



913.7



787.3



1,111.1



1,016.0



1,024.2



988.2Two years later


1,009.9



985.4



998.8



1,212.9



1,298.5



1,614.0



1,808.2



1,646.5



1,676.1Three years later


1,276.4



1,295.5



1,423.6



1,455.7



1,835.7



2,160.9



2,273.0



2,123.5Four years later


1,553.1



1,601.6



1,562.6



1,898.4



2,221.0



2,520.9



2,661.8Five years later


1,802.2



1,665.8



1,932.4



2,206.1



2,490.5



2,831.1Six years later


1,827.3



1,968.7



2,188.1



2,426.5



2,734.3Seven years later


2,061.8



2,173.5



2,373.8



2,625.8Eight years later


2,224.6



2,327.9



2,546.2Nine years later


2,352.3



2,476.7Ten years later


2,475.6Reserves re-estimated as of:One year later


1,689.9



1,740.4



1,961.5



2,522.1



3,299.0



4,050.8



4,443.6



4,465.5



4,549.0



4,662.7Two years later


1,768.1



1,904.2



2,201.0



2,782.1



3,537.0



4,143.5



4,481.5



4,499.0



4,567.7Three years later


1,987.9



2,155.2



2,527.7



3,049.6



3,736.1



4,221.3



4,564.3



4,537.8Four years later


2,241.1



2,468.0



2,827.3



3,293.8



3,837.5



4,320.5



4,623.1Five years later


2,535.0



2,725.8



3,076.8



3,414.1



3,950.1



4,393.0Six years later


2,750.5



2,973.6



3,202.2



3,534.4



4,023.3Seven years later


2,968.9



3,079.3



3,324.8



3,606.0Eight years later


3,068.6



3,193.7



3,396.0Nine years later


3,181.5



3,269.3Ten years later


3,252.2Favourable (unfavourable) development


(1,585.4
)


(1,594.9
)


(1,551.4
)


(1,265.1
)


(890.8
)


(527.6
)


(220.0
)


(62.2
)


(7.4
)


3.6




---



##### 



OdysseyRes
    Accident Year Claims Reserve Development
  Accident Year2000 &As at December 31

Prior


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010End of first year


1,666.8



580.9



720.6



981.3



1,242.1



1,480.2



1,139.6



1,143.1



1,110.8



1,141.5



1,182.7One year later


1,689.7



568.7



673.5



923.8



1,149.3



1,427.6



1,087.4



1,095.2



1,066.1



1,119.2Two years later


1,767.7



512.7



661.6



856.4



1,119.7



1,321.2



1,047.5



1,045.7



1,045.9Three years later


1,987.7



510.2



675.4



824.1



1,074.6



1,297.5



1,031.1



1,025.8Four years later


2,241.4



529.2



717.7



818.8



1,055.9



1,284.1



1,017.4Five years later


2,535.2



571.6



719.4



813.7



1,048.1



1,283.4Six years later


2,750.5



601.0



739.1



811.4



1,049.7Seven years later


2,968.8



606.9



747.3



811.7Eight years later


3,068.6



608.4



742.9Nine years later


3,181.5



613.3Ten years later


3,252.2Favourable (unfavourable) development


(95.1
)%


(5.6
)%


(3.1
)%


17.3
%


15.5
%


13.3
%


10.7
%


10.3
%


5.8
%


2.0
%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Reinsurance
    and Insurance  Other (Group Re, Advent, Polish Re and
    Fairfax Brasil)
    Reconciliation
    of Provision for Claims  Reinsurance and
    Insurance  Other
  2010


2009


2008


2007


2006Provision for claims and LAE at January 1


1,004.1



742.0



554.4



558.8



632.3Transfer to
    Runoff(1)










(97.9
)






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


429.3



371.4



132.4



168.6



201.0Foreign exchange effect on claims


20.1



69.0



(86.7
)


65.0



(0.4
)Increase (decrease) in provision for prior accident years
    claims


(32.4
)


31.2



2.3



(28.4
)


25.2Total incurred losses on claims and LAE


417.0



471.6



48.0



205.2



225.8Payments for losses on claims and LAEPayments on current accident years claims


(126.4
)


(81.5
)


(42.4
)


(54.4
)


(73.7
)Payments on prior accident years claims


(270.3
)


(196.4
)


(93.0
)


(155.2
)


(225.6
)Total payments for losses on claims and LAE


(396.7
)


(277.9
)


(135.4
)


(209.6
)


(299.3
)Insurance subsidiaries acquired during the
    year(2)






68.4



372.9







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


1,024.4



1,004.1



742.0



554.4



558.8CTR Life


25.3



27.6



34.9



21.5



24.8Provision for claims and LAE at December 31


1,049.7



1,031.7



776.9



575.9



583.6   (1)
    
    Transfer to Runoff of nSpire Res Group Re business in
    2008.(2)
    
    Polish Re in 2009 and Advent in 2008.




---



##### 



Reinsurance
    and Insurance  Others Calendar Year Claims
    Reserve
    Development(1)
  Calendar YearAs at December 31

2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010Provisions for claims including LAE


209.8



232.4



226.1



263.3



267.6



315.6



373.5



456.5



742.0



1,004.1



1,024.4Cumulative payments as of:One year later


47.5



66.6



78.2



115.8



54.3



40.3



85.9



93.0



197.7



240.5Two years later


100.5



129.7



175.5



152.8



74.6



104.3



151.9



160.5



262.5Three years later


146.0



215.0



206.0



164.9



128.8



160.5



209.4



238.7Four years later


221.0



232.0



209.0



210.0



179.2



206.6



267.3Five years later


227.7



222.5



243.4



251.8



216.2



252.7Six years later


205.4



243.7



276.7



280.8



252.5Seven years later


220.4



265.2



299.5



309.6Eight years later


237.9



279.7



320.6Nine years later


249.8



293.8Ten years later


262.3Reserves re-estimated as of:One year later


205.3



229.5



268.2



286.3



279.6



319.4



429.4



383.8



833.5



989.2Two years later


202.8



258.5



295.2



302.9



288.2



361.9



375.8



454.1



833.0Three years later


222.7



277.5



310.1



317.3



326.7



322.9



436.9



484.2Four years later


242.0



283.2



323.4



348.4



302.8



377.6



458.0Five years later


245.3



291.1



348.1



338.0



351.7



393.3Six years later


251.5



307.9



343.5



375.2



364.5Seven years later


266.0



305.8



374.6



384.7Eight years later


266.9



327.1



380.3Nine years later


287.1



334.7Ten years later


295.7Favourable (unfavourable) development


(85.9
)


(102.3
)


(154.2
)


(121.4
)


(96.9
)


(77.7
)


(84.5
)


(27.7
)


(91.0
)


14.9   (1)
    
    The table above has been restated to reflect the transfer of
    nSpire Res Group Re business to Runoff effective
    January 1, 2008.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Runoff
    Reconciliation
    of Provision for Claims  Runoff
  2010


2009


2008


2007


2006Provision for claims and LAE at January 1


1,956.7



1,989.9



2,116.5



2,487.9



1,797.9Transfer to
    Runoff(1)










97.9







146.2Incurred losses on claims and LAEProvision for current accident years claims


1.8







13.7



5.3



96.2Foreign exchange effect on claims


(8.4
)


14.3



(30.5
)


21.0



29.9Increase in provision for prior accident years claims


50.6



57.6



64.1



90.9



75.8Increase in provision  Swiss Re commutation


















412.6Total incurred losses on claims and LAE


44.0



71.9



47.3



117.2



614.5Payments for losses on claims and LAEPayments on current accident years claims


(0.1
)






(2.6
)


(4.1
)


(32.8
)Payments on prior accident years claims


(300.0
)


(105.1
)(2)


(269.2
)


(484.5
)


(37.9
)(3)Total payments for losses on claims and LAE


(300.1
)


(105.1
)


(271.8
)


(488.6
)


(70.7
)Runoff subsidiaries acquired during the
    year(4)


394.4















Provision for claims and LAE at December 31


2,095.0



1,956.7



1,989.9



2,116.5



2,487.9   (1)
    
    Transfer to Runoff of nSpire Res Group Re business in
    2008 and 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)
    
    GFIC and Syndicate 2112 in 2010.    Asbestos
    and Pollution
  Note: In this Asbestos and Pollution section, figures are in
    US$ millions unless otherwise indicated. Figures may not
    add due to rounding.
  General
    A&E Discussion




---



##### 



2010


2009


2008Gross


Net


Gross


Net


Gross


NetRunoffProvision for A&E claims and ALAE at January 1


906.3



354.1



914.8



276.1



988.8



285.9A&E losses and ALAE incurred during the year


22.2



16.9



74.6



89.1



26.3



17.4A&E losses and ALAE paid during the year


94.2



28.2



83.1



11.1



100.3



27.2Provision for A&E claims and ALAE at December 31


834.3



342.8



906.3



354.1



914.8



276.1US InsuranceProvision for A&E claims and ALAE at January 1


391.1



340.0



444.6



380.7



485.5



418.6A&E losses and ALAE incurred during the year


10.8



7.7



26.5



7.0



31.9



34.6A&E losses and ALAE paid during the year


53.8



45.1



80.0



47.7



72.8



72.5Insurance subsidiaries acquired during the
    year(1)


8.6



8.6















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


356.7



311.2



391.1



340.0



444.6



380.7OdysseyReProvision for A&E claims and ALAE at January 1


413.7



265.6



394.8



260.4



381.2



256.9A&E losses and ALAE incurred during the year


84.5



53.2



70.3



40.6



76.4



45.1A&E losses and ALAE paid during the year


55.3



38.0



51.4



35.4



62.8



41.6Provision for A&E claims and ALAE at December 31


442.9



280.8



413.7



265.6



394.8



260.4Fairfax TotalProvision for A&E claims and ALAE at January 1


1,711.1



959.7



1,754.2



917.2



1,855.5



961.4A&E losses and ALAE incurred during the year


117.5



77.8



171.4



136.7



134.6



97.1A&E losses and ALAE paid during the year


203.3



111.3



214.5



94.2



235.9



141.3Insurance subsidiaries acquired during the
    year(1)


8.6



8.6















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


1,633.9



934.8



1,711.1



959.7



1,754.2



917.2   (1)
    
    Zenith National in 2010.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Runoff


U.S. Insurance


OdysseyReNet loss and ALAE reserves


342.8



311.2



280.83-year
    average net paid loss and ALAE


22.2



56.8



38.33-year
    survival ratio


15.5



5.5



7.3   Asbestos
    Claim Discussion
      2010


2009


2008Gross


Net


Gross


Net


Gross


NetRunoffProvision for asbestos claims and ALAE at January 1


668.4



251.5



589.0



186.8



655.4



199.9Asbestos losses and ALAE incurred during the year


57.8



36.2



120.3



74.6



7.1



4.0Asbestos losses and ALAE paid during the year


62.3



22.7



40.9



9.9



73.5



17.1Provision for asbestos claims and ALAE at December 31


663.9



265.0



668.4



251.5



589.0



186.8US InsuranceProvision for asbestos claims and ALAE at January 1


314.1



269.3



356.4



301.8



391.5



333.6Asbestos losses and ALAE incurred during the year


9.8



6.7



21.2



2.8



23.1



25.2Asbestos losses and ALAE paid during the year


46.1



39.6



63.5



35.3



58.2



57.0Insurance subsidiaries acquired during the
    year(1)


6.6



6.6















Provision for asbestos claims and ALAE at December 31


284.4



243.0



314.1



269.3



356.4



301.8OdysseyReProvision for asbestos claims and ALAE at January 1


386.6



241.6



360.6



230.5



339.2



222.4Asbestos losses and ALAE incurred during the year


73.8



44.4



69.4



40.0



73.8



41.0Asbestos losses and ALAE paid during the year


51.1



34.2



43.4



28.9



52.4



32.9Provision for asbestos claims and ALAE at December 31


409.3



251.8



386.6



241.6



360.6



230.5Fairfax TotalProvision for asbestos claims and ALAE at January 1


1,369.1



762.4



1,306.0



719.1



1,386.1



755.9Asbestos losses and ALAE incurred during the year


141.4



87.3



210.9



117.4



104.0



70.2Asbestos losses and ALAE paid during the year


159.5



96.5



147.8



74.1



184.1



107.0Insurance subsidiaries acquired during the
    year(1)


6.6



6.6















Provision for asbestos claims and ALAE at December 31


1,357.6



759.8



1,369.1



762.4



1,306.0



719.1   (1)
    
    Zenith National in 2010.




---



##### 



insured-by-insured ground-up,
  insured-by-insured
    Environmental
    Pollution Discussion




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      2010


2009


2008Gross


Net


Gross


Net


Gross


NetRunoffProvision for pollution claims and ALAE at January 1


237.9



102.6



325.8



89.3



333.4



86.0Pollution losses and ALAE incurred during the year


(35.6
)


(19.3
)


(45.7
)


14.5



19.2



13.4Pollution losses and ALAE paid during the year


31.9



5.5



42.2



1.2



26.8



10.1Provision for pollution claims and ALAE at December 31


170.4



77.8



237.9



102.6



325.8



89.3US InsuranceProvision for pollution claims and ALAE at January 1


77.0



70.7



88.2



78.9



94.0



85.0Pollution losses and ALAE incurred during the year


1.0



1.0



5.3



4.2



8.8



9.4Pollution losses and ALAE paid during the year


7.7



5.5



16.5



12.4



14.6



15.5Insurance subsidiaries acquired during the
    year(1)


2.0



2.0















Provision for pollution claims and ALAE at December 31


72.3



68.2



77.0



70.7



88.2



78.9OdysseyReProvision for pollution claims and ALAE at January 1


27.1



24.0



34.2



29.9



42.0



34.5Pollution losses and ALAE incurred during the year


10.7



8.8



0.9



0.6



2.6



4.1Pollution losses and ALAE paid during the year


4.2



3.8



8.0



6.5



10.4



8.7Provision for pollution claims and ALAE at December 31


33.6



29.0



27.1



24.0



34.2



29.9Fairfax TotalProvision for pollution claims and ALAE at January 1


342.0



197.3



448.2



198.1



469.4



205.5Pollution losses and ALAE incurred during the year


(23.9
)


(9.5
)


(39.5
)


19.3



30.6



26.9Pollution losses and ALAE paid during the year


43.8



14.8



66.7



20.1



51.8



34.3Insurance subsidiaries acquired during the
    year(1)


2.0



2.0















Provision for pollution claims and ALAE at December 31


276.3



175.0



342.0



197.3



448.2



198.1   (1)
    
    Zenith National in 2010.  ground-up, ground-up,
    Summary




---



##### 



Recoverable
    from Reinsurers
  and/or
      A.M. Best rating


Gross


Net unsecured(or S&P


recoverable


recoverable(3)Group

Principal reinsurers

equivalent)(1)


from
    reinsurers(2)


from reinsurersSwiss Re

Swiss Re America Corp.




A



776.5



473.5Lloyds

Lloyds




A



296.8



264.4Munich

Munich Reinsurance Co. of Canada




A+



182.0



162.4Nationwide

Nationwide Mutual Insurance Co.




A+



137.0



136.9Berkshire Hathaway

General Reinsurance Corp.




A++



128.6



125.8Everest

Everest Reinsurance Co.




A+



125.5



105.1SCOR

SCOR Canada Reinsurance Co.




A



110.6



102.5HDI

Hannover Rueckversicherung




A



109.7



86.4CNA

Continental Casualty




A



107.5



72.5Aegon

Arc Re




(4
)


96.3



14.1Transatlantic

Transatlantic Reinsurance Co.




A



93.2



89.6GIC

General Insurance Corp. of India




A-



86.6



21.6Ace

Insurance Co. of North America




A+



80.5



79.0Enstar

Unionamerica Insurance




NR



66.3



61.6Alterra

Alterra Bermuda Ltd.




A



58.4



39.6AXA

Colisee Re




A



55.7



51.5Travelers

Travelers Indemnity Co.




A+



50.4



49.8Genworth

Genworth Life and Annuity Insurance Co.




A



49.8



49.8Platinum

Platinum Underwriters Reinsurance Co.




A



49.5



43.3Ullico

Ullico Casualty Co.




B+



49.1



Arch Capital

Arch Reinsurance Co.




A



46.2



19.7PartnerRe

Paris Re SA




A



39.5



33.4Brit

Brit Insurance Ltd.




A



38.2



33.3Singapore Re

Singapore Re Corp




A-



37.7



13.5Liberty Mutual

Employers Insurance of Wausau




A



37.6



37.1MS&AD Insurance Group

Aioi Nissay Dowa Insurance Co. Ltd.




A



34.5



25.5Cigna

Connecticut General Life Insurance Co.




A



32.3



32.2AIG

Lexington Insurance




A



31.4



25.6Aspen

Aspen Insurance UK Ltd




A



30.0



29.3Chubb

Federal Insurance Co.




A++



29.7



29.5CCR

Caisse Centrale de Reassurance




A++



29.2



22.4Aviva

Aviva International Insurance Ltd.




A



26.5



26.2Randall & Quilter

R&Q Reinsurance Co.




NR



26.1



26.1Allstate

Allstate Insurance Co.




A+



25.3



25.3




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    A.M. Best rating


Gross


Net unsecured(or S&P


recoverable


recoverable(3)Group

Principal reinsurers

equivalent)(1)


from
    reinsurers(2)


from reinsurersRenaissance

Renaissance Re




A+



24.7



24.0Met Life

Metropolitan Life Insurance Co.




A+



24.2



24.2Toa Re

Toa Reinsurance Co. of America




A



23.5



21.9FM Global

Factory Mutual Insurance Co.




A+



22.8



22.8Manulife

John Hancock Life Insurance Co.




A+



22.7



20.4White Mountains

White Mountains Reinsurance Co. of America




A-



22.5



20.4Hartford

Excess Insurance Co. Ltd.




A



21.5



18.2Validus

Validus Reinsurance Ltd.




A-



21.5



19.9Asia Capital

Asia Capital Re Group Pte Ltd.




A-



20.3



15.3Starr

Starr Indemnity & Liability Co.




A



18.9



18.9WR Berkley

Berkley Insurance Co.




A+



18.8



16.8XL

XL Reinsurance America Inc.




A



18.3



16.5Axis

Axis Reinsurance Co.




A



17.9



15.9Tokio Marine

Tokio Marine & Nichido Fire Insurance Co. Ltd.




A++



17.5



16.6Symetra

Symetra Life Insurance Co.




A



17.5



17.5Global Re

Global Reinsurance Corp. of America




NR



16.9



15.1Sub-total










3,503.7



2,712.9Other reinsurers










863.1



616.8Total recoverable from reinsurers










4,366.8



3,329.7Provision for uncollectible reinsurance










373.0



373.0Recoverable from reinsurers










3,993.8



2,956.7   (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.    Consolidated
    Recoverable from Reinsurers
 OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

recoverable


security


recoverableequivalent)

from reinsurers


is held


from reinsurersA++


176.4



8.5



167.9A+


841.0



72.0



769.0A


2,077.5



473.2



1,604.3A-


262.3



123.7



138.6B++


38.0



13.0



25.0B+


78.0



55.8



22.2B or lower


5.5







5.5Not rated


806.6



244.3



562.3Pools and associations


81.5



46.6



34.94,366.8



1,037.1



3,329.7Provision for uncollectible reinsurance




373.0







373.0Recoverable from reinsurers




3,993.8







2,956.7




---



##### 




    for reinsurers rated A- or better, Fairfax had security of
    $677.4 against outstanding reinsurance recoverable of $3,357.2;
    for reinsurers rated B++ or lower, Fairfax had security of $68.8
    against outstanding reinsurance recoverable of $121.5; and
    for unrated reinsurers, Fairfax had security of $244.3 against
    outstanding reinsurance recoverable of $806.6.        Recoverable
    from Reinsurers  Reinsurance and Insurance Operating
    Companies
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

recoverable


security


recoverableequivalent)

from reinsurers


is held


from reinsurersA++


158.2



8.4



149.8A+


531.4



50.5



480.9A


1,639.2



439.2



1,200.0A-


242.6



122.8



119.8B++


34.0



12.5



21.5B+


66.7



53.5



13.2B or lower


2.9







2.9Not rated


359.8



158.6



201.2Pools and associations


75.0



46.6



28.43,109.8



892.1



2,217.7Provision for uncollectible reinsurance




114.2







114.2Recoverable from reinsurers




2,995.6







2,103.5




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Recoverable
    from Reinsurers  Runoff Operations
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

recoverable


security


recoverableequivalent)

from reinsurers


is held


from reinsurersA++


18.2



0.1



18.1A+


309.6



21.5



288.1A


438.3



34.0



404.3A-


19.7



0.9



18.8B++


4.0



0.5



3.5B+


11.3



2.3



9.0B or lower


2.6







2.6Not rated


446.8



85.7



361.1Pools and associations


6.5







6.51,257.0



145.0



1,112.0Provision for uncollectible reinsurance




258.8







258.8Recoverable from reinsurers




998.2







853.2




---



##### 



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)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



9,429.3



0.1%



3.9
%2010


(236.6
)


10,430.5



(2.3%
)


3.8
%Weighted average since inception










(2.3%
)


4.9
%Fairfax weighted average financing differential since inception:
    2.6%     Reinsurance


Totaland


InsuranceCanadian


U.S.


Asian


Reinsurance


Insurance


andYear

Insurance


Insurance


Insurance


OdysseyRe


Other


Reinsurance


Runoff


Total2006


1,586.0



1,853.8



85.4



4,360.2



572.4



8,457.8



2,061.0



10,518.82007


1,887.4



1,812.8



86.9



4,412.6



577.8



8,777.5



1,770.5



10,548.02008


1,739.1



2,125.1



68.9



4,398.6



726.4



9,058.1



1,783.8



10,841.92009


2,052.8



2,084.5



125.7



4,540.4



997.0



9,800.4



1,737.0



11,537.42010


2,191.9



2,949.7



144.1



4,797.6



977.3



11,060.6



2,048.9



13,109.5




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Insurance
    Environment
    Investments
    Average


Interest and dividend incomeinvestments at


Pre-tax


After taxYear

carrying
    value(1)


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



375.7



2.90



27.17



244.3



1.89



17.662005


14,142.5



466.1



3.30



28.34



303.0



2.14



18.422006


15,827.0



746.5



4.72



42.03



485.3



3.07



27.322007


17,898.0
(2)


761.0



4.25



42.99



494.7



2.76



27.952008


19,468.8
(2)


626.4



3.22



34.73



416.6



2.14



23.102009


20,604.2
(2)


712.7



3.46



38.94



477.5



2.32



26.092010


22,273.0
(2)


762.4



3.42



37.31



526.1



2.36



25.74   (1)
    
    Net of short sale and derivative obligations of the holding
    company and the subsidiary companies commencing in 2004.(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(1)


Bonds


stocks


stocks


estate


Total(1)


($)(1)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



7,260.9



135.8



1,960.9



28.0



13,460.6



840.802005


4,385.0



8,127.4



15.8



2,324.0



17.2



14,869.4



835.112006


5,188.9



9,017.2



16.4



2,579.2



18.0



16,819.7



948.622007(2)


3,965.7



11,669.1



19.9



3,339.5



6.5



19,000.7



1,075.502008(2)


6,343.5



9,069.6



50.3



4,480.0



6.4



19,949.8



1,140.852009(2)


3,658.8



11,550.7



357.6



5,697.9



8.0



21,273.0



1,064.242010(2)


4,073.4



13,353.5



627.3



5,226.8



24.6



23,305.6



1,139.35   (1)
    
    Net of short sale and derivative obligations of the holding
    company and the subsidiary companies commencing in 2004.(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.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    mark-to-market
      December 31, 2010


December 31, 2009Carrying





CarryingIssuer Credit Rating

value


%


value


%AAA/Aaa


4,220.2



32.5



5,748.9



50.1AA/Aa


5,291.0



40.8



1,695.4



14.8A/A


1,432.7



11.1



1,468.5



12.8BBB/Baa


558.4



4.3



970.8



8.5BB/Ba


324.4



2.5



253.5



2.2B/B


215.1



1.7



291.9



2.5Lower than B/B and unrated


914.9



7.1



1,039.4



9.1Total


12,956.7



100.0



11,468.4



100.0




---



##### 



mark-to-market
      December 31,2010


2009Total derivative assets (excluding exchange traded instruments
    comprised principally of equity call options and warrants and
    credit warrants which are not subject to counterparty risk)


424.8



104.8Impact of net settlement arrangements


(119.0
)


(11.1
)Fair value of collateral deposited for the benefit of the company


(120.5
)


(23.2
)Net derivative counterparty exposure after net settlement and
    collateral arrangements


185.3



70.5     Interest
    Rate Risk




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      December 31, 2010Hypothetical $ changeeffect on:Fair value of


Otherfixed income


comprehensive


Net


HypotheticalChange in Interest Rates

portfolio


income


earnings


% change200 basis point increase


10,285.5



(1,001.2
)


(800.2
)


(20.6
)100 basis point increase


11,473.9



(563.5
)


(445.5
)


(11.4
)No change


12,956.7











100 basis point decrease


14,593.3



670.7



446.4



12.6200 basis point decrease


16,461.7



1,498.9



898.5



27.1   December 31, 2009Hypothetical $ 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     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 accounted


investmentsYear

value(1)


dividends


gains


(losses)


earnings(5)


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



375.7



300.5
(2)


165.6















841.8



6.52005


14,142.5



466.1



385.7



73.0















924.8



6.52006


15,827.0



746.5



789.4
(3)


(247.8
)














1,288.1



8.12007


17,898.0
(4)


761.0











1,639.5



304.5



(131.2
)


2,573.8



14.42008


19,468.8
(4)


626.4











2,718.6



(426.7
)


278.3



3,196.6



16.42009


20,604.2
(4)


712.7











904.3



1,076.7



(185.2
)


2,508.5



12.22010


22,273.0
(4)


762.4











214.9



(193.2
)


90.6



874.7



3.9Cumulative from inception


7,534.2



3,887.8







5,477.3















9.7
(6)   (1)
    
    Net of short sale and derivative obligations of the holding
    company and the subsidiary companies commencing in 2004.(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)
    
    Excludes a net loss in 2010 of $26.4 (2009  net
    gain of $14.3; 2008  net loss of $147.9;
    2007  net gain of $26.4) recognized on the
    companys underwriting activities related to foreign
    currency. 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.(6)
    
    Simple average of the total return on average investments for
    each of the 25 years.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Capital
    Resources and Management
    2010


2009


2008


2007


2006(1)


2006Holding company cash, short term investments and marketable
    securities, net of short sale and derivative obligations


1,474.2



1,242.7



1,555.0



963.4



783.6



767.4Holding company debt


1,498.1



1,236.9



869.6



1,063.2



1,181.5



1,202.6Subsidiary debt


919.9



903.4



910.2



915.0



974.2



981.3Other long term obligations  holding company


311.5



173.5



187.7



192.6



197.1



197.1Total debt


2,729.5



2,313.8



1,967.5



2,170.8



2,352.8



2,381.0Net debt


1,255.3



1,071.1



412.5



1,207.4



1,569.2



1,613.6Common shareholders equity


7,761.9



7,391.8



4,866.3



4,121.4



2,799.6



2,720.3Preferred stock


934.7



227.2



102.5



136.6



136.6



136.6Non-controlling interests


45.8



117.6



1,382.8



1,585.0



1,300.6



1,292.9Total equity


8,742.4



7,736.6



6,351.6



5,843.0



4,236.8



4,149.8Net debt/total equity


14.4
%


13.8
%


6.5
%


20.7
%


37.0
%


38.9
%Net debt/net total
    capital(2)


12.6
%


12.2
%


6.1
%


17.1
%


27.0
%


28.0
%Total debt/total
    capital(3)


23.8
%


23.0
%


23.7
%


27.1
%


35.7
%


36.5
%Interest
    coverage(4)


2.8
x


8.2
x


16.4
x


11.3
x


5.2
x


5.2
xInterest and preferred share dividend distribution
    coverage(5)


2.3
x


7.5
x


15.0
x


10.3
x


4.8
x


4.8x   (1)
    
    Balances reflect the adjustment at January 1, 2007 upon
    adoption of the accounting standards described in note 2 of
    the companys consolidated financial statements for the
    year ended December 31, 2007.(2)
    
    Net total capital is calculated by the company as the sum of
    total equity and net debt.(3)
    
    Total capital is calculated by the company as the sum of
    total equity 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.(5)
    
    Interest and preferred share dividend distribution coverage
    is calculated by the company as the sum of earnings (loss) from
    operations before income taxes and interest expense divided by
    interest expense and preferred share dividend distribution
    obligations adjusted to a before tax equivalent at the
    companys Canadian statutory tax rate.




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Number of


Averagesubordinate


issue/repurchase


Net proceeds/Date

voting shares


price per share


(repurchase cost)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
)2010  issue of shares


563,381



354.64



199.82010  repurchase of shares


(43,900
)


382.69



(16.8
)         Net premiums written to statutory surplus (total equity)2010


2009


2008


2007


2006InsuranceNorthbridge (Canada)


0.8



0.7



1.0



0.7



1.0Crum & Forster (U.S.)


0.6



0.5



0.8



0.8



1.0Zenith National
    (U.S.)(1)


0.6



n/a



n/a



n/a



n/aFairfax Asia


0.4



0.4



0.3



0.3



0.4Reinsurance OdysseyRe


0.5



0.5



0.7



0.8



1.1Reinsurance and
    Insurance Other(2)


0.8



1.1



0.6



0.6



1.2Canadian insurance industry


1.1



1.0



1.0



1.0



1.0U.S. insurance industry


0.7



0.8



1.0



0.9



0.9   (1)
    
    Zenith National was acquired May 20, 2010 pursuant to
    the acquisition transaction described in note 19 to the
    consolidated financial statements. Zenith Nationals net
    premiums written for the period May 21, 2010 to
    December 31, 2010 have been annualized for inclusion in
    this calculation.(2)
    
    Other includes Group Re (all years), Advent (effective
    September 2008), Polish Re (effective January 2009) and
    Fairfax Brasil (effective March 2010).




---



##### 



StandardIssuer Credit Ratings

A.M. Best


& Poors


Moodys


DBRSFairfax Financial Holdings Limited


bbb



BBB-



Ba1



BBBCrum & Forster Holdings Corp.


bbb



BBB-



Ba1



Zenith National Insurance Corp.


bbb



BBB-



Ba1



Odyssey Re Holdings Corp.


bbb



BBB-



Baa3



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


A



A-



Baa1



Zenith National Insurance Corp.


A



A-



A3



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 Reinsurance Limited


A











Wentworth Insurance Company Ltd.


A-











First Capital Insurance Limited


A











Falcon Insurance Company (Hong Kong) Limited






A-







Advent Capital (Holdings) PLC


A
(2)


A+
(2)






Polish Re


A-



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




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



Contractual
    Obligations
    Less than








More than1 year


1 - 3 years


3 - 5 years


5 years


TotalGross claims liability


3,756.9



4,172.4



2,721.0



5,620.0



16,270.3Long term debt obligations  principal


0.4



376.2



207.6



1,887.0



2,471.2Long term debt obligations  interest


178.1



338.0



294.1



666.0



1,476.2Operating leases  obligations


59.2



76.2



49.1



79.5



264.0Other long term liabilities  principal


6.7



8.7



10.3



343.4



369.1Other long term liabilities  interest


14.4



27.5



25.8



31.7



99.44,015.7



4,999.0



3,307.9



8,627.6



20,950.2     Lawsuits
    Managements
    Evaluation of Disclosure Controls and Procedures
    Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f)




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Internal Control-Integrated Framework. Internal Control  Integrated
    Framework
    Issues
    and Risks
    Claims
    Reserves
      Catastrophe
    Exposure
    Cyclical
    Nature of the Property & Casualty
    Business




---



##### 



Investment
    Portfolio
      Derivative
    Instruments




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Economic
    Hedging Strategies
      Latent
    Claims
    Recoverable
    from Reinsurers
      Strategic
    Initiatives




---



##### 



Ratings
    Competition
      Emerging
    Claim and Coverage Issues
      Cost
    of Reinsurance and Adequate Protection




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Holding
    Company Liquidity
      Access
    to Capital
    and/or
  Key
    Employees




---



##### 



Regulatory,
    Political and other Influences
    Information
    Requests or Proceedings by Government Authorities
    Regional
    or Geographical Limitations and Risks
      Lawsuits
    day-to-day
  Significant
    Shareholder




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Foreign
    Exchange
    Reliance
    on Distribution Channels
      Goodwill
    and Intangible Assets
      Taxation




---



##### 



Guaranty
    Funds and Shared Markets
    Technology
        International Financial Reporting Standards




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
          First-time Adoption of International Financial Reporting
    Standards
    Impairment of Assets
  Financial Instruments: Recognition and
    Measurement Financial Instruments




---



##### 



Employee Benefits Defined Benefit
    Plans: Proposed amendments to IAS 19




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Consolidated
    Balance Sheet
 as at January 1, 2010
 (unaudited  US$ millions)
  AdjustmentsuponCanadian GAAP

Canadian


Reclassi-





adoption of





IFRSAssets

GAAP


fications


Reclassified


IFRS


IFRS


AssetsHolding company investments


1,251.6







1,251.6







1,251.6


Holding company investmentsAccounts receivable and other


1,805.0



(431.4
)(e)


1,373.6



3.2
(10)


1,376.8


Insurance contract receivablesIncome taxes receivable


50.4



(50.4
)(e)










(245.7
)(5)Recoverable from reinsurers


3,818.6







3,818.6



(1.8
)(10)


3,571.1


Recoverable from reinsurers6,925.6



(481.8
)


6,443.8



(244.3
)


6,199.5Portfolio investments





















Portfolio investmentsSubsidiary cash and short term investments


3,244.8







3,244.8







3,244.8


Subsidiary cash and short term investmentsBonds


10,918.3







10,918.3







10,918.3


BondsPreferred stocks


292.8







292.8







292.8


Preferred stocksCommon stocks


4,895.0







4,895.0



(1.8
)(10)


4,893.2


Common stocksInvestments, at equity


433.5







433.5



(9.8
)(2)


423.7


Investments in associatesDerivatives and other invested assets


142.7







142.7







142.7


Derivatives and other invested assetsAssets pledged for short sale and derivative obligations


151.5







151.5







151.5


Assets pledged for short sale and derivative obligations20,078.6







20,078.6



(11.6
)


20,067.0Deferred premium acquisition costs


372.0







372.0







372.0


Deferred premium acquisition costs3.9
(2)(27.0
)(6)3.8
(7)7.4
(8)(1.3
)(9)Future income taxes


318.7







318.7



(6.0
)(10)


299.5


Deferred income taxesGoodwill and intangible assets


438.8







438.8







438.8


Goodwill and intangible assets(4.8
)(2)(12.7
)(7)(8.5
)(8)(1.1
)(9)Other
    assets(a)


318.3



481.8
(e)


800.1



(1.4
)(10)


771.6


Other assets28,452.0







28,452.0



(303.6
)


28,148.4Liabilities





















LiabilitiesSubsidiary indebtedness


12.1







12.1







12.1


Subsidiary indebtedness22.3
(2)15.1
(5)20.5
(8)(4.4
)(9)Accounts payable and accrued liabilities


1,238.1







1,238.1



(0.8
)(10)


1,290.8


Accounts payable and accrued liabilities5.8
(6)Income taxes payable


70.9







70.9



0.9
(10)


77.6


Income taxes payableShort sale and derivative obligations


57.2







57.2







57.2


Short sale and derivative obligationsFunds withheld payable to reinsurers


354.9







354.9







354.9


Funds withheld payable to reinsurers1,733.2







1,733.2



59.4



1,792.6(260.8
)(5)Insurance contract
    liabilities(b)


16,680.5







16,680.5



(1.1
)(10)


16,418.6


Insurance contract liabilitiesLong term
    debt(c)


2,301.7







2,301.7



(0.5
)(10)


2,301.2


Long term debt18,982.2







18,982.2



(262.4
)


18,719.8Equity(d)





















EquityCommon stock


3,058.6







3,058.6







3,058.6


Common stockTreasury stock, at cost


(28.7
)






(28.7
)






(28.7
)

Treasury stock, at cost(31.3
)(2)150.1
(3)747.1
(4)(32.8
)(6)(6.3
)(7)(21.6
)(8)1.7
(9)Retained earnings


3,468.8







3,468.8



(6.3
)(10)


4,269.4


Retained earnings(150.1
)(3)Accumulated other comprehensive income


893.1







893.1



(747.1
)(4)


(4.1
)

Accumulated other comprehensive incomeCommon shareholders equity


7,391.8







7,391.8



(96.6
)


7,295.2


Common shareholders equityPreferred stock


227.2







227.2







227.2


Preferred stockShareholders equity attributable to shareholders
    of Fairfax


7,619.0







7,619.0



(96.6
)


7,522.4


Shareholders equity attributable to shareholders
    of Fairfax(1.7
)(2)(2.6
)(7)Non-controlling interests


117.6







117.6



0.3
(9)


113.6


Non-controlling interestsTotal equity


7,736.6







7,736.6



(100.6
)


7,636.0


Total equity28,452.0







28,452.0



(303.6
)


28,148.4




---



##### 



Reclassifications
    to conform with the companys IFRS balance sheet
    presentation
  (a)
    
    Other assets include premises and equipment which was disclosed
    as a separate line under Canadian GAAP;  (b)
    
    Insurance contract liabilities include provisions for claims and
    unearned premiums which were disclosed as separate line items
    under Canadian GAAP;(c)
    
    Long term debt includes holding company borrowings, subsidiary
    company borrowings and other long term obligations of the
    holding company which were disclosed as separate lines under
    Canadian GAAP;(d)
    
    Presentation of equity for Canadian GAAP reflects the adoption
    of the Canadian Institute of Chartered Accountants Handbook
    Section 1582, Business Combinations, Section 1601,
    Consolidated Financial Statements and Section 1602,
    Non-Controlling Interests; and,(e)
    
    Reclassification of income taxes receivable and miscellaneous
    balances receivable (primarily accrued interest and dividends)
    to other assets in order to separately present insurance
    contract receivables.  Adjustments
    upon adoption of IFRS
    IFRS
    mandatory exceptions
    Estimates
    Hedge
    accounting
  Financial Instruments:
    Recognition and Measurement
    Non-controlling
    interests
  Consolidated and Separate
    Financial Statements
  IFRS
    optional exemptions
    (1) Business combinations
 Business
    Combinations




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    (2) Employee benefits
 Employee
    Benefits
    (3) Currency translation differences
 The Effects of Changes in Foreign
    Exchange Rates
    Other
    Measurement Adjustments between Canadian GAAP and IFRS
  (4) Adoption of IFRS 9 Financial Instruments:
    Classification and Measurement
 Financial
    Instruments: Classification and Measurement Financial Instruments: Recognition and Measurement
    (5) Structured settlements




---



##### 



(6)
    Derecognition
    of deferred tax assets   (7) Impairment of premises and equipment
       (8) Pension asset limitation
   (9) Employee benefits
   (10) Other
   Future
    changes under IFRS
  Financial
    Instruments: Amortized Cost and Impairment Financial Instruments: Impairment




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
      Hedge Accounting
  Insurance
    Contracts
  Leases right-of-use
  Other




---



##### 



Critical
    Accounting Estimates and Judgments
    Compliance
    with Corporate Governance Rules
      Forward-Looking
    Statements




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    www.fairfax.ca www.sedar.com
  Quarterly
    Data (unaudited)
  Years
    ended December 31
 First


Second


Third


Fourth


FullQuarter


Quarter


Quarter


Quarter


Year2010Revenue


1,804.4



1,811.7



1,681.0



866.6



6,163.7Net earnings (loss)


289.4



325.2



219.0



(364.6
)


469.0Net earnings (loss) per share

$
14.08


$
15.55


$
10.29


$
(18.43
)

$
21.41Net earnings (loss) per diluted share

$
14.02


$
15.49


$
10.24


$
(18.43
)

$
21.312009Revenue


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


$
79.53     Stock
    Prices and Share Information




---



##### 



First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Cdn$)2010High


410.32



409.57



425.25



420.97Low


356.25



362.80



389.00



395.00Close


381.90



389.88



419.00



408.992009High


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



390.00The table that follows presents the New York Stock Exchange
    high, low and closing U.S. dollar prices of subordinate
    voting shares of Fairfax for each quarter of 2009 and 2008.First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(1)(US$)2009High


328.76



280.49



382.38



377.14Low


211.01



237.16



241.50



343.00Close


260.50



249.49



370.73



354.502008High


343.00



336.00



330.00



355.48Low


258.23



235.70



210.50



241.71Close


287.10



253.90



328.50



313.41   (1)
    
    On December 10, 2009, Fairfaxs subordinate voting
    shares were voluntarily delisted from the New York Stock
    Exchange.