FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations



(as of March 6, 2009 except as otherwise indicated)  (Figures and amounts are in US$ and $ millions except
    per share amounts and as otherwise indicated. Figures may not
    add due to rounding.)
  Notes:  (1)
    Readers of the Managements Discussion and Analysis of
    Financial Condition and Results of Operations should review the
    entire Annual Report for additional commentary and information.
    Additional information relating to the company, including its
    annual information form, can be found on SEDAR at
    www.sedar.com,which can also be accessed from the
    companys website www.fairfax.ca.  (2)
    Management analyzes and assesses the underlying insurance,
    reinsurance and runoff operations and the financial position of
    the consolidated group in various ways. Certain of these
    measures provided in this Annual Report, which have been used
    historically and disclosed regularly in Fairfaxs Annual
    Reports and interim financial reporting, are non-GAAP measures.
    Where non-GAAP measures are provided, descriptions are clearly
    provided in the commentary as to the nature of the adjustments
    made.(3)
    The combined ratio  which may be calculated
    differently by different companies and is calculated by the
    company as the sum of the loss ratio (claims losses and loss
    adjustment expenses expressed as a percentage of net premiums
    earned) and the expense ratio (commissions, premium acquisition
    costs and other underwriting expenses as a percentage of net
    premiums earned)  is the traditional measure of
    underwriting results of property and casualty companies, but is
    regarded as a non-GAAP measure.(4)
    Other non-GAAP measures included in the Capital Resources and
    Management section of this Managements Discussion and
    Analysis of Financial Condition include: net debt divided by
    total equity and non-controlling interests, net debt divided by
    net total capital and total debt divided by total capital. The
    company also calculates an interest coverage ratio as a measure
    of its ability to service its debt.(5)
    References in this MD&A to Fairfaxs insurance and
    reinsurance operations do not include Fairfaxs runoff
    operations.




---



##### 



Sources
    of Revenue    2008


2007


2006Net premiums earnedInsurance  Canada (Northbridge)


1,076.1



1,017.1



1,025.8 U.S.
    (Crum & Forster)


1,005.0



1,187.4



1,114.0 Asia
    (Fairfax Asia)


84.6



68.7



67.3Reinsurance  OdysseyRe


2,076.4



2,120.5



2,225.8 Other


269.6



258.4



332.4Runoff


17.4



(3.3
)


85.34,529.1



4,648.8



4,850.6Interest and dividends


626.4



761.0



746.5Net gains on investments


2,720.5



1,639.4



835.3Other revenue


99.4



434.5



371.37,975.4



7,483.7



6,803.7   non-U.S. operations




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
            Net
    Earnings




---



##### 



2008


2007


2006(1)(2)(3)Combined ratiosInsurance  Canada (Northbridge)


107.3
%


92.3
%


98.0
% U.S.
    (Crum & Forster)


117.6
%


93.5
%


92.3
% Asia
    (Fairfax Asia)


92.1
%


70.4
%


78.4
%Reinsurance  OdysseyRe


103.5
%


95.5
%


96.5
% Other


150.0
%


95.6
%


95.7
%Consolidated


110.1
%


94.0
%


95.5
%Sources of net earningsUnderwritingInsurance  Canada (Northbridge)


(78.7
)


78.0



20.5 U.S.
    (Crum & Forster)


(177.2
)


77.0



86.2 Asia
    (Fairfax Asia)


6.7



20.3



14.5Reinsurance  OdysseyRe


(73.5
)


94.7



77.0 Other


(135.0
)


11.3



14.4Underwriting income (loss)


(457.7
)


281.3



212.6Interest and dividends  insurance and reinsurance


476.1



604.4



586.1Operating income


18.4



885.7



798.7Net gains on investments  insurance and reinsurance


1,558.6



984.0



666.6Runoff


392.6



187.6



(382.2
)Other(4)


1.4



25.4



17.6Interest expense


(158.6
)


(209.5
)


(210.4
)Corporate overhead and other


631.9



287.2



(11.7
)Pre-tax income


2,444.3



2,160.4



878.6Income taxes


(755.6
)


(711.1
)


(485.6
)Non-controlling interests


(214.9
)


(353.5
)


(165.5
)Net earnings


1,473.8



1,095.8



227.5   (1)
    
    Excluding the effect of foreign currency movements, the 2008
    combined ratios of Northbridge, OdysseyRe,
    Reinsurance  Other (foreign currency movements
    principally affected Advent) and Fairfax consolidated were
    102.4%, 101.3%, 116.6% and 106.0% respectively.(2)
    
    Excluding the impact 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 107.7% for
    Crum & Forster and Fairfax consolidated
    respectively.(3)
    
    Prior to giving effect to the above-mentioned foreign
    currency movements, the two above-mentioned items affecting
    Crum & Forster and catastrophe losses related to
    Hurricanes Ike and Gustav, the Fairfax consolidated combined
    ratio in 2008 was 96.2%.(4)
    
    Other comprises the pre-tax income before interest and other
    of the Ridley animal nutrition business for the year ended
    December 31, 2008 and the Cunningham Lindsey claims
    adjusting business for the years ended December 31, 2007
    and 2006.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



Net
    Earnings by Business Segment
    Year
    ended December 31, 2008
  Crum &

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,452.1


1,019.6


227.0


2,294.5


245.8


5,239.0


12.6





(190.2)





5,061.4Net premiums written


1,099.5


878.2


86.5


2,030.8


226.1


4,321.1


11.1











4,332.2Net premiums earned


1,076.1


1,005.0


84.6


2,076.4


269.6


4,511.7


17.4











4,529.1Underwriting profit (loss)


(78.7)


(177.2)


6.7


(73.5)


(135.0)


(457.7)














(457.7)Interest and dividends


107.9


86.2


1.6


250.3


30.1


476.1














476.1Operating income (loss) before:


29.2


(91.0)


8.3


176.8


(104.9)


18.4














18.4Net gains (losses) on investments


66.5


605.7


3.2


785.9


118.1


1,579.4


472.8





(20.8)





2,031.4Runoff operating loss




















(80.2)











(80.2)Other(1)























1.4








1.4Interest expense





(28.3)





(34.2)


(2.6)


(65.1)





(0.4)





(93.1)


(158.6)Corporate overhead and other


(14.5)


(8.8)


(5.5)


(13.9)


(1.9)


(44.6)











676.5


631.9Pre-tax income (loss)


81.2


477.6


6.0


914.6


8.7


1,488.1


392.6


1.0


(20.8)


583.4


2,444.3Income taxes
































(755.6)Non-controlling interests
































(214.9)Net earnings
































1,473.8   (1)
    
    Other comprises the pre-tax income of the Ridley animal
    nutrition business for the year ended December 31, 2008 and
    the Cunningham Lindsey claims adjusting business for the years
    ended December 31, 2007 and 2006.




---



##### 



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

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,531.3


1,245.0


171.2


2,282.7


250.2


5,480.4


8.0





(273.9)





5,214.5Net premiums written


996.8


1,100.9


70.5


2,089.4


251.2


4,508.8


(10.4)











4,498.4Net premiums earned


1,017.1


1,187.4


68.7


2,120.5


258.4


4,652.1


(3.3)











4,648.8Underwriting profit


78.0


77.0


20.3


94.7


11.3


281.3














281.3Interest and dividends


119.2


133.4


17.4


309.3


25.1


604.4














604.4Operating income before:


197.2


210.4


37.7


404.0


36.4


885.7














885.7Net gains (losses) on investments


188.2


250.3


(0.3)


554.6


8.5


1,001.3


291.8





(17.3)





1,275.8Runoff operating loss




















(104.2)











(104.2)Other(1)























25.4








25.4Interest expense





(51.0)





(37.7)





(88.7)





(15.7)





(105.1)


(209.5)Corporate overhead and other


(12.4)


(9.6)


(3.2)


(13.8)





(39.0)











326.2


287.2Pre-tax income (loss)


373.0


400.1


34.2


907.1


44.9


1,759.3


187.6


9.7


(17.3)


221.1


2,160.4Income taxes
































(711.1)Non-controlling interests
































(353.5)Net earnings
































1,095.8   (1)
    
    Other comprises the pre-tax income of the Ridley animal
    nutrition business for the year ended December 31, 2008 and
    the Cunningham Lindsey claims adjusting business for the years
    ended December 31, 2007 and 2006.  Year
    ended December 31, 2006
  Crum &

Fairfax



Other

Ongoing







Corporate &Northbridge

Forster

Asia

OdysseyRe

Reinsurance

Operations

Runoff

Other(1)

Intercompany

Other

ConsolidatedGross premiums written


1,609.9


1,351.6


134.8


2,361.7


325.9


5,783.9


160.9





(458.2)





5,486.6Net premiums written


1,012.3


1,196.5


60.5


2,186.9


314.5


4,770.7


19.0











4,789.7Net premiums earned


1,025.8


1,114.0


67.3


2,225.8


332.4


4,765.3


85.3











4,850.6Underwriting profit


20.5


86.2


14.5


77.0


14.4


212.6














212.6Interest and dividends


100.8


156.5


3.3


298.4


27.1


586.1














586.1Operating income before:


121.3


242.7


17.8


375.4


41.5


798.7














798.7Net gains (losses) on investments


115.1


271.4


14.2


358.9


18.9


778.5


132.7





(111.9)





799.3Runoff operating loss




















(514.9)











(514.9)Other(1)























17.6








17.6Interest expense





(33.0)





(37.5)





(70.5)





(14.7)





(125.2)


(210.4)Corporate overhead and other


(9.8)


(8.1)


(3.3)


(18.8)





(40.0)











28.3


(11.7)Pre-tax income (loss)


226.6


473.0


28.7


678.0


60.4


1,466.7


(382.2)


2.9


(111.9)


(96.9)


878.6Income taxes
































(485.6)Non-controlling interests
































(165.5)Net earnings
































227.5   (1)
    
    Other comprises the pre-tax income of the Ridley animal
    nutrition business for the year ended December 31, 2008 and
    the Cunningham Lindsey claims adjusting business for the years
    ended December 31, 2007 and 2006. Segmented
    Balance Sheets    (a)
    The balance sheet for each segment is on a legal entity basis
    for the subsidiaries within the segment (except for nSpire Re in
    Runoff, which excludes intercompany balances related to
    U.S. acquisition financing), prepared in accordance with
    Canadian GAAP and Fairfaxs accounting policies and basis
    of accounting. Accordingly, these segmented balance sheets
    differ from those published by Crum & Forster and
    OdysseyRe due to differences between Canadian and US GAAP.




---



##### 



(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
    $1,060.6 Corporate and Other long term debt as at
    December 31, 2008 consists primarily of Fairfax debt of
    $869.6 (2007-$1,063.2), and other long term obligations
    consisting of TIG trust preferred securities of $17.9
    (2007 - $17.9) and purchase consideration payable of
    $169.8 (2007 - $174.7) related to the TRG acquisition (see
    note 9 to the consolidated financial statements).  Segmented
    Balance Sheet as at December 31, 2008
  Insurance


ReinsuranceCrum &


Fairfax








Operating








CorporateNorthbridge


Forster


Asia


OdysseyRe


Other


Companies


Runoff


Other(1)


& Other


ConsolidatedAssetsHolding company cash, short term investments and marketable
    securities






8.4















8.4











1,555.8



1,564.2Accounts receivable and other


373.8



221.8



56.5



701.3



122.0



1,475.4



142.7



45.2



25.4



1,688.7Recoverable from reinsurers


1,053.3



1,006.7



156.4



868.0



93.4



3,177.8



1,927.8







(871.4
)


4,234.2Portfolio investments


2,748.5



3,741.0



421.1



7,743.8



1,191.3



15,845.7



2,478.1



6.2



85.0



18,415.0Deferred premium acquisition costs


113.6



52.7







139.1



17.7



323.1



0.1







(1.3
)


321.9Future income taxes


32.4



197.8







304.4



30.3



564.9



637.7



7.8



(511.0
)


699.4Premises and equipment


10.7



6.2



1.2



10.7



0.7



29.5



2.2



85.6



15.8



133.1Goodwill and intangible assets


15.4



22.9



5.5



32.0



9.8



85.6



0.1



57.0



(19.5
)


123.2Due from affiliates






0.7



1.1







0.9



2.7











(2.7
)


Other assets


4.2



11.4







20.9



2.3



38.8



20.5



60.8



5.6



125.7Investments in Fairfax affiliates


28.2



94.3







124.7



75.9



323.1



274.4







(597.5
)


Total assets


4,380.1



5,363.9



641.8



9,944.9



1,544.3



21,875.0



5,483.6



262.6



(315.8
)


27,305.4LiabilitiesSubsidiary indebtedness






























21.1







21.1Accounts payable and accrued liabilities


141.7



254.8



89.1



398.3



11.8



895.7



243.3



59.4



128.1



1,326.5Income taxes payable






165.6



6.0



238.1







409.7



2.5







244.1



656.3Short sale and derivative obligations














8.6







8.6



11.6







9.2



29.4Due to affiliates


0.1











0.6







0.7



5.3







(6.0
)


Funds withheld payable to reinsurers


30.7



231.6



21.6



58.0



28.8



370.7



20.7







(36.3
)


355.1Provision for claims


2,414.2



2,987.7



179.6



5,250.5



856.5



11,688.5



3,806.2







(766.3
)


14,728.4Unearned premiums


669.8



366.4



92.8



702.0



153.5



1,984.5



0.4







(94.3
)


1,890.6Future income taxes payable


2.8



















2.8







28.6



(31.4
)


Long term debt






305.2







486.5



93.4



885.1







0.7



1,060.6



1,946.4Total liabilities


3,259.3



4,311.3



389.1



7,142.6



1,144.0



16,246.3



4,090.0



109.8



507.7



20,953.8Non-controlling interests










2.7











2.7











1,380.1



1,382.8Shareholders equity


1,120.8



1,052.6



250.0



2,802.3



400.3



5,626.0



1,393.6



152.8



(2,203.6
)


4,968.8Total liabilities and shareholders equity


4,380.1



5,363.9



641.8



9,944.9



1,544.3



21,875.0



5,483.6



262.6



(315.8
)


27,305.4CapitalDebt






305.2







486.5



93.4



885.1







0.7



1,060.6



1,946.4Non-controlling interests


394.1











896.8



40.2



1,331.1







49.0



2.7



1,382.8Investments in Fairfax affiliates


28.2



94.3







124.7



75.9



323.1



274.4







(597.5
)


Shareholders equity


698.5



958.3



250.0



1,780.8



284.2



3,971.8



1,119.2



103.8



(226.0
)


4,968.8Total capital


1,120.8



1,357.8



250.0



3,288.8



493.7



6,511.1



1,393.6



153.5



239.8



8,298.0% of total capital


13.5
%


16.4
%


3.0
%


39.6
%


6.0
%


78.5
%


16.8
%


1.8
%


2.9
%


100.0
%   (1)
    
    Other comprises the balance sheet of the Ridley animal
    nutrition business as at December 31, 2008.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
    Segmented
    Balance Sheet as at December 31, 2007
  Insurance


ReinsuranceCrum &


Fairfax








Operating








CorporateNorthbridge


Forster


Asia


OdysseyRe


Other


Companies


Runoff


Other(1)


& Other


ConsolidatedAssetsHolding company cash, short term investments and marketable
    securities






12.3















12.3











959.5



971.8Accounts receivable and other


463.9



296.2



41.5



724.2



67.8



1,593.6



209.0



143.6



(39.3
)


1,906.9Recoverable from reinsurers


1,274.6



1,571.3



109.9



787.2



12.4



3,755.4



2,319.6







(1,036.5
)


5,038.5Portfolio investments


3,613.6



4,316.6



375.9



7,635.1



898.2



16,839.4



2,171.2



58.8



22.3



19,091.7Deferred premium acquisition costs


143.2



72.3



0.5



150.8



4.3



371.1















371.1Future income taxes


48.6



85.3







50.3



1.1



185.3



679.6







(520.6
)


344.3Premises and equipment


13.7



5.1



1.0



12.5



0.6



32.9



2.8







18.1



53.8Goodwill and intangible assets


13.8



9.2



5.7



16.5







45.2



0.2







44.0



89.4Due from affiliates


























13.7







(13.7
)


Other assets






11.8







20.5







32.3



20.0







22.0



74.3Investments in Fairfax affiliates






91.9







88.5



157.2



337.6



185.4







(523.0
)


Total assets


5,571.4



6,472.0



534.5



9,485.6



1,141.6



23,205.1



5,601.5



202.4



(1,067.2
)


27,941.8LiabilitiesAccounts payable and accrued liabilities


246.2



201.7



70.2



329.7



3.8



851.6



244.9



0.3



135.8



1,232.6Income taxes payable


20.1



13.7



5.8



45.9







85.5



1.4







(18.0
)


68.9Short sale and derivative obligations


271.2



719.8







63.4







1,054.4











8.4



1,062.8Due to affiliates


0.2



0.4







3.6



12.9



17.1



5.6







(22.7
)


Funds withheld payable to reinsurers


52.3



256.5



1.3



88.0



3.6



401.7



22.0







(61.1
)


362.6Provision for claims


2,670.0



3,178.4



145.6



5,119.1



588.1



11,701.2



4,263.1







(916.2
)


15,048.1Unearned premiums


865.5



486.2



73.1



724.3



118.4



2,267.5



5.4







(119.9
)


2,153.0Future income taxes payable


6.7







0.7











7.4











(7.4
)


Long term debt






307.2







489.2







796.4







126.7



1,247.7



2,170.8Total liabilities


4,132.2



5,163.9



296.7



6,863.2



726.8



17,182.8



4,542.4



127.0



246.6



22,098.8Non-controlling interests










2.1











2.1











1,582.9



1,585.0Shareholders equity


1,439.2



1,308.1



235.7



2,622.4



414.8



6,020.2



1,059.1



75.4



(2,896.7
)


4,258.0Total liabilities and shareholders equity


5,571.4



6,472.0



534.5



9,485.6



1,141.6



23,205.1



5,601.5



202.4



(1,067.2
)


27,941.8CapitalDebt






307.2







489.2







796.4







126.7



1,247.7



2,170.8Non-controlling interests


563.1











1,019.8







1,582.9











2.1



1,585.0Investments in Fairfax affiliates






91.9







88.5



157.2



337.6



185.4







(523.0
)


Shareholders equity


876.1



1,216.2



235.7



1,514.1



257.6



4,099.7



873.7



75.4



(790.8
)


4,258.0Total capital


1,439.2



1,615.3



235.7



3,111.6



414.8



6,816.6



1,059.1



202.1



(64.0
)


8,013.8% of total capital


18.0
%


20.2
%


2.9
%


38.8
%


5.2
%


85.1
%


13.2
%


2.5
%


(0.8
)%


100.0
%   (1)
    
    Other comprises the balance sheet of the Cunningham Lindsey
    claims adjusting business as at December 31, 2007.  Holding company cash, short term investments and marketable
    securities
  Accounts receivable and other
  Reinsurance recoverables




---



##### 



Future income taxes
        Portfolio investments




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Goodwill and intangible assets
  Provision for claims
 Components
    of Net Earnings Underwriting
    and Operating Income  company-by-company
  Canadian
    Insurance  Northbridge
  2008


2007


2006Underwriting profit (loss)


(78.7
)


78.0



20.5Combined ratioLoss & LAE


80.1
%


64.1
%


71.8
%Commissions


10.7
%


8.2
%


8.1
%Underwriting expense


16.5
%


20.0
%


18.1
%107.3
%


92.3
%


98.0
%Gross premiums written


1,452.1



1,531.3



1,609.9Net premiums written


1,099.5



996.8



1,012.3Net premiums earned


1,076.1



1,017.1



1,025.8Underwriting profit (loss)


(78.7
)


78.0



20.5Interest and dividends


107.9



119.2



100.8Operating income


29.2



197.2



121.3Net gains on investments


66.5



188.2



115.1Pre-tax income before interest and other


95.7



385.4



236.4Net income after taxes


45.7



273.3



147.3




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
             2008


2007AssetsAccounts receivable and other


373.8



463.9Recoverable from reinsurers


1,053.3



1,274.6Portfolio investments


2,748.5



3,613.6Deferred premium acquisition costs


113.6



143.2Future income taxes


32.4



48.6Premises and equipment


10.7



13.7Goodwill and intangible assets


15.4



13.8Other assets


4.2



Investment in Fairfax affiliates


28.2



Total assets


4,380.1



5,571.4LiabilitiesAccounts payable and accrued liabilities


141.7



246.2Income taxes payable






20.1Short sale and derivative obligations






271.2Due to affiliates


0.1



0.2Funds withheld payable to reinsurers


30.7



52.3Provision for claims


2,414.2



2,670.0Unearned premiums


669.8



865.5Future income taxes payable


2.8



6.7Total liabilities


3,259.3



4,132.2Shareholders equity


1,120.8



1,439.2Total liabilities and shareholders equity


4,380.1



5,571.4




---



##### 



Affiliate

% interestRidley


29.4   www.norfin.com.
  U.S.
    Insurance  Crum &
    Forster(1)
  2008


2007


2006Underwriting profit (loss)


(177.2
)


77.0



86.2Combined ratioLoss & LAE


85.8
%


64.9
%


64.1
%Commissions


12.0
%


12.0
%


11.1
%Underwriting expense


19.8
%


16.6
%


17.1
%117.6
%


93.5
%


92.3
%Gross premiums written


1,019.6



1,245.0



1,351.6Net premiums written


878.2



1,100.9



1,196.5Net premiums earned


1,005.0



1,187.4



1,114.0Underwriting profit (loss)


(177.2
)


77.0



86.2Interest and dividends


86.2



133.4



156.5Operating income (loss)


(91.0
)


210.4



242.7Net gains on investments


605.7



250.3



271.4Pre-tax income before interest and other


514.7



460.7



514.1Net income after taxes


315.1



267.3



314.6   (1)
    
    These results differ from those published by Crum &
    Forster Holdings Corp., primarily due to differences between
    Canadian and US GAAP.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     2008


2007AssetsHolding company cash, short term investments and marketable
    securities


8.4



12.3Accounts receivable and other


221.8



296.2Recoverable from reinsurers


1,006.7



1,571.3Portfolio investments


3,741.0



4,316.6Deferred premium acquisition costs


52.7



72.3Future income taxes


197.8



85.3Premises and equipment


6.2



5.1Goodwill and intangible assets


22.9



9.2Due from affiliates


0.7



Other assets


11.4



11.8Investments in Fairfax affiliates


94.3



91.9Total assets


5,363.9



6,472.0LiabilitiesAccounts payable and accrued liabilities


254.8



201.7Income taxes payable


165.6



13.7Short sale and derivative obligations






719.8Due to affiliates






0.4Funds withheld payable to reinsurers


231.6



256.5Provision for claims


2,987.7



3,178.4Unearned premiums


366.4



486.2Long term debt


305.2



307.2Total liabilities


4,311.3



5,163.9Shareholders equity


1,052.6



1,308.1Total liabilities and shareholders equity


5,363.9



6,472.0   (1)
    
    These balance sheets differ from those published by
    Crum & Forster Holdings Corp., primarily due to
    differences between Canadian and US GAAP.      Affiliate

% interestTRG Holdings


1.4Advent


11.7OdysseyRe


8.2




---



##### 



10-K www.cfins.com.
  Asian
    Insurance  Fairfax Asia
  2008


2007


2006Underwriting profit


6.7



20.3



14.5Combined ratioLoss & LAE


81.8
%


56.2
%


55.7
%Commissions


(6.6
)%


(3.1
)%


7.5
%Underwriting expense


16.9
%


17.3
%


15.2
%92.1
%


70.4
%


78.4
%Gross premiums written


227.0



171.2



134.8Net premiums written


86.5



70.5



60.5Net premiums earned


84.6



68.7



67.3Underwriting profit


6.7



20.3



14.5Interest and dividends


1.6



17.4



3.3Operating income


8.3



37.7



17.8Net gains (losses) on investments


3.2



(0.3
)


14.2Pre-tax income before interest and other


11.5



37.4



32.0Net income after taxes


0.9



28.7



23.0




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
       (www.icicilombard.com)
    2008


2007AssetsAccounts receivable and other


56.5



41.5Recoverable from reinsurers


156.4



109.9Portfolio investments


421.1



375.9Deferred premium acquisition costs






0.5Premises and equipment


1.2



1.0Goodwill and intangible assets


5.5



5.7Due from affiliates


1.1



Total assets


641.8



534.5LiabilitiesAccounts payable and accrued liabilities


89.1



70.2Income taxes payable


6.0



5.8Funds withheld payable to reinsurers


21.6



1.3Provision for claims


179.6



145.6Unearned premiums


92.8



73.1Future income taxes payable






0.7Total liabilities


389.1



296.7Non-controlling interests


2.7



2.1Shareholders equity


250.0



235.7Total liabilities and shareholders equity


641.8



534.5




---



##### 



Reinsurance 
    OdysseyRe(1)
  2008


2007


2006Underwriting profit (loss)


(73.5
)


94.7



77.0Combined ratioLoss & LAE


74.9
%


66.4
%


68.7
%Commissions


20.1
%


20.6
%


20.8
%Underwriting expense


8.5
%


8.5
%


7.0
%103.5
%


95.5
%


96.5
%Gross premiums written


2,294.5



2,282.7



2,361.7Net premiums written


2,030.8



2,089.4



2,186.9Net premiums earned


2,076.4



2,120.5



2,225.8Underwriting profit (loss)


(73.5
)


94.7



77.0Interest and dividends


250.3



309.3



298.4Operating income


176.8



404.0



375.4Net gains on investments


785.9



554.6



358.9Pre-tax income before interest and other


962.7



958.6



734.3Net income after taxes


613.9



596.0



470.7   (1)
    
    These results differ from those published by Odyssey Re
    Holdings Corp. primarily due to differences between Canadian and
    US GAAP.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



2008


2007AssetsAccounts receivable and other


701.3



724.2Recoverable from reinsurers


868.0



787.2Portfolio investments


7,743.8



7,635.1Deferred premium acquisition costs


139.1



150.8Future income taxes


304.4



50.3Premises and equipment


10.7



12.5Goodwill and intangible assets


32.0



16.5Other assets


20.9



20.5Investments in Fairfax affiliates


124.7



88.5Total assets


9,944.9



9,485.6LiabilitiesAccounts payable and accrued liabilities


398.3



329.7Income taxes payable


238.1



45.9Short sale and derivative obligations


8.6



63.4Due to affiliates


0.6



3.6Funds withheld payable to reinsurers


58.0



88.0Provision for claims


5,250.5



5,119.1Unearned premiums


702.0



724.3Long term debt


486.5



489.2Total liabilities


7,142.6



6,863.2Shareholders equity


2,802.3



2,622.4Total liabilities and shareholders equity


9,944.9



9,485.6   (1)
    
    These balance sheets differ from those published by Odyssey
    Re Holdings Corp. primarily due to differences between Canadian
    and US GAAP.      Affiliate

% interestTRG Holdings


13.0Fairfax Asia


26.2Advent


14.4   10-K www.odysseyre.com.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Reinsurance 
    Other
      2008


2007


2006Group Re


Advent(1)


Total


Group Re


Group ReUnderwriting profit (loss)


(22.6
)


(112.4
)


(135.0
)


11.3



14.4Combined ratioLoss & LAE


79.2
%


210.6
%


117.6
%


54.4
%


67.4
%Commissions


30.6
%


23.7
%


28.6
%


39.1
%


26.8
%Underwriting expense


2.0
%


8.2
%


3.8
%


2.1
%


1.5
%111.8
%


242.5
%


150.0
%


95.6
%


95.7
%Gross premiums written


185.4



60.4



245.8



250.2



325.9Net premiums written


185.5



40.6



226.1



251.2



314.5Net premiums earned


190.8



78.8



269.6



258.4



332.4Underwriting profit (loss)


(22.6
)


(112.4
)


(135.0
)


11.3



14.4Interest and dividends


22.4



7.7



30.1



25.1



27.1Operating income (loss)


(0.2
)


(104.7
)


(104.9
)


36.4



41.5Net gains on investments


40.4



77.7



118.1



8.5



18.9Pre-tax income (loss) before interest and other


40.2



(27.0
)


13.2



44.9



60.4Net income (loss) after taxes


49.2



(20.2
)


29.0



44.9



59.6   (1)
    
    These results differ from those published by Advent primarily
    due to differences in the classification of foreign currency
    translation between Canadian GAAP and IFRS.




---



##### 



2008


2007Group Re


Advent(1)


Total


Group ReAssetsAccounts receivable and other


28.4



93.6



122.0



67.8Recoverable from reinsurers


0.4



93.0



93.4



12.4Portfolio investments


655.6



535.7



1,191.3



898.2Deferred premium acquisition costs


3.1



14.6



17.7



4.3Future income taxes






30.3



30.3



1.1Premises and equipment






0.7



0.7



0.6Goodwill and intangible assets






9.8



9.8



Due from affiliates


0.9







0.9



Other assets






2.3



2.3



Investments in Fairfax affiliates


75.9







75.9



157.2Total assets


764.3



780.0



1,544.3



1,141.6LiabilitiesAccounts payable and accrued liabilities






11.8



11.8



3.8Due to affiliates














12.9Funds withheld payable to reinsurers


0.2



28.6



28.8



3.6Provision for claims


404.4



452.1



856.5



588.1Unearned premiums


91.6



61.9



153.5



118.4Long term debt






93.4



93.4



Total liabilities


496.2



647.8



1,144.0



726.8Shareholders equity


268.1



132.2



400.3



414.8Total liabilities and shareholders equity


764.3



780.0



1,544.3



1,141.6   (1)
    
    This balance sheet differs from that published by Advent
    primarily due to differences in classification between Canadian
    GAAP and IFRS.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
        Affiliate

% interestTRG Holdings


9.3Advent


12.6Ridley


24.0   Runoff
    U.S.
    runoff group
          European
    runoff group




---



##### 



Swiss
    Re Corporate Adverse Development Cover




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Results
    and balance sheet
    2008


2007


2006Gross premiums written


12.6



8.0



160.9Net premiums written


11.1



(10.4
)


19.0Net premiums earned


17.4



(3.3
)


85.3Losses on claims (excluding the reinsurance commutation below)


(56.2
)


(122.2
)


(169.1
)Operating expenses


(109.6
)


(70.3
)


(107.8
)Interest and dividends


68.2



91.6



89.3Operating income (loss)


(80.2
)


(104.2
)


(102.3
)Net gains on investments


472.8



291.8



21.1Pre-tax income (loss) before the undernoted


392.6



187.6



(81.2
)Loss on reinsurance
    commutation(1)










(412.6
)Net gain on sale of OdysseyRe
    shares(2)










111.6Pre-tax income (loss) before interest and other


392.6



187.6



(382.2
)   (1)
    
    See the Swiss Re Corporate Adverse Development
    Cover discussion preceding this section.(2)
    
    Realized gain on the sale in 2006 of OdysseyRe shares by U.S.
    runoff companies to facilitate the companys OdysseyRe
    secondary offering (a portion of which was eliminated on
    consolidation, resulting in a $69.7 gain on a consolidated
    basis).




---



##### 








---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     2008


2007AssetsAccounts receivable and other


142.7



209.0Recoverable from reinsurers


1,927.8



2,319.6Portfolio investments


2,478.1



2,171.2Deferred premium acquisition costs


0.1



Future income taxes


637.7



679.6Premises and equipment


2.2



2.8Goodwill and intangible assets


0.1



0.2Due from affiliates






13.7Other assets


20.5



20.0Investments in Fairfax affiliates


274.4



185.4Total assets


5,483.6



5,601.5LiabilitiesAccounts payable and accrued liabilities


243.3



244.9Income taxes payable


2.5



1.4Short sale and derivative obligations


11.6



Due to affiliates


5.3



5.6Funds withheld payable to reinsurers


20.7



22.0Provision for claims


3,806.2



4,263.1Unearned premiums


0.4



5.4Total liabilities


4,090.0



4,542.4Shareholders equity


1,393.6



1,059.1Total liabilities and shareholders equity


5,483.6



5,601.5




---



##### 



Affiliate

% interestOdysseyRe


17.8Northbridge


16.4Advent


13.8   Other
  2008


2007


2006Revenue


99.4



434.5



371.3Costs and expenses


(98.0
)


(401.5
)


(353.7
)Operating income


1.4



33.0



17.6Net losses on investments






(7.6
)


Pre-tax income before interest and other


1.4



25.4



17.6Interest expense


(0.4
)


(15.7
)


(14.7
)Pre-tax income


1.0



9.7



2.9         2008


2007AssetsAccounts receivable and other


45.2



143.6Portfolio investments


6.2



58.8Future income taxes


7.8



Premises and equipment


85.6



Goodwill and intangible assets


57.0



Other assets


60.8



Total assets


262.6



202.4LiabilitiesSubsidiary indebtedness


21.1



Accounts payable and accrued liabilities


59.4



0.3Future income taxes payable


28.6



Long term debt


0.7



126.7Total liabilities


109.8



127.0Shareholders equity


152.8



75.4Total liabilities and shareholders equity


262.6



202.4




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Interest
    and Dividends
          Net Gains
    on Investments




---



##### 



Excess of saleproceeds overNotional


Original


Sale


originalamount


acquisition cost


proceeds


acquisition costFY 2007


965.5



25.7



199.3



173.6Q1 2008


3,830.0



95.5



885.0



789.5Q2 2008


855.0



22.8



190.0



167.2Q3 2008


3,580.9



59.4



595.7



536.3Q4 2008


3,363.9



68.1



378.0



309.9Cumulative sales since inception


12,595.3



271.5



2,248.0



1,976.5Remaining credit default swap positions at December 31, 2008


8,873.0



161.5



415.0
(1)


253.5
(2)Cumulative realized and unrealized from inception


21,468.3



433.0



2,663.0



2,230.0   (1)
    
    Market value as of December 31, 2008(2)
    
    Unrealized gain (measured using original acquisition cost) as
    of December 31, 2008      Interest
    Expense




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     2008


2007


2006Fairfax


89.1



105.1



125.2Crum & Forster


28.3



29.8



33.0Crum & Forster debt offering and tender offer costs






21.2



OdysseyRe


34.2



37.7



37.5Cunningham Lindsey


4.0



15.7



14.7Advent


2.6







Ridley


0.4







158.6



209.5



210.4  Corporate
    Overhead and Other    2008


2007


2006Fairfax corporate overhead


94.7



110.0



78.8Subsidiary holding companies corporate overhead


44.6



39.0



40.0Holding company interest and dividends


(28.7
)


(19.3
)


(18.1
)Holding company net gains on investments


(689.2
)


(371.2
)


(36.0
)Investment management and administration fees


(53.3
)


(45.7
)


(53.0
)(631.9
)


(287.2
)


11.7      Income
    Taxes




---



##### 



Non-controlling
    Interests    2008


2007


2006Northbridge


18.4



111.0



59.5OdysseyRe


209.9



241.0



106.0Cunningham Lindsey






1.5



Advent


(13.6
)






Ridley


0.2







214.9



353.5



165.5       Provision
    for Claims




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
             Favourable/(Unfavourable)2008


2007Insurance      Canada
    (Northbridge)


63.3



29.2 U.S.
    (Crum & Forster) (excluding a reinsurance commutation)


25.2



46.6 Asia
    (Fairfax Asia)


(3.4
)


4.4Reinsurance  OdysseyRe


10.1



(40.5
) Other


(2.3
)


28.4Net favourable development  insurance and
    reinsurance operating companies


92.9



68.1Runoff


(64.1
)


(90.9
)Crum & Forster reinsurance commutation


(84.2
)


Net unfavourable development


(55.4
)


(22.8
)




---



##### 



Reconciliation
    of Provision for Claims and LAE as at December 31
  2008


2007


2006


2005


2004Insurance subsidiaries owned throughout the year


3,716.3



3,478.3



3,184.0



3,037.3



2,699.8Insurance subsidiaries acquired during the year


















21.1Total insurance subsidiaries


3,716.3



3,478.3



3,184.0



3,037.3



2,720.9Reinsurance subsidiaries owned throughout the
    year(1)


4,964.3



5,051.5



4,986.7



4,527.0



3,541.9Reinsurance subsidiaries acquired during the
    year(2)


372.9















77.1Total reinsurance subsidiaries


5,337.2



5,051.5



4,986.7



4,527.0



3,619.0Runoff subsidiaries owned throughout the year


1,989.9



2,116.5



2,487.9



1,759.7



1,481.6Runoff subsidiaries acquired during the year














38.2



Total runoff subsidiaries


1,989.9



2,116.5



2.487.9



1,797.9



1,481.6Life insurance
    subsidiary(3)


















26.2Net provision for claims and LAE


11,043.4



10,646.3



10,658.6



9,362.2



7,847.7Reinsurance
    gross-up


3,685.0



4,401.8



4,843.7



6,872.9



7,318.3Gross provision for claims and LAE


14,728.4



15,048.1



15,502.3



16,235.1



15,166.0   (1)
    
    Including Group Re(2)
    
    Advent in 2008 and Opus Re in 2004(3)
    
    Former Northbridge life insurance subsidiary sold in 2005




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Canadian
    Insurance  Northbridge
    Reconciliation
    of Provision for Claims  Northbridge
  2008


2007


2006


2005


2004(In Cdn$ except as indicated)Provision for claims and LAE at January 1


1,696.0



1,640.2



1,408.7



1,153.9



855.4Incurred losses on claims and LAEProvision for current accident years claims


925.3



778.4



780.8



825.9



736.3Foreign exchange effect on claims


59.2



(46.8
)


0.8



(5.8
)


(13.3
)Increase (decrease) in provision for prior accident years
    claims


(67.1
)


(31.5
)


54.1



(38.1
)


15.0Total incurred losses on claims and LAE


917.4



700.1



835.7



782.0



738.0Payments for losses on claims and LAEPayments on current accident years claims


(298.6
)


(267.9
)


(251.1
)


(248.1
)


(206.1
)Payments on prior accident years claims


(383.0
)


(376.4
)


(353.1
)


(279.1
)


(233.4
)Total payments for losses on claims and LAE


(681.6
)


(644.3
)


(604.2
)


(527.2
)


(439.5
)Provision for claims and LAE at December 31


1,931.8



1,696.0



1,640.2



1,408.7



1,153.9Exchange rate


0.8100



1.0132



0.8593



0.8561



0.8347Provision for claims and LAE at December 31 converted to U.S.
    dollars


1,564.8



1,718.4



1,409.5



1,205.9



963.1




---



##### 



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

1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008(In Cdn$)Provision for claims including LAE


593.3



603.3



585.5



621.9



728.9



855.4



1,153.9



1,408.7



1,640.2



1,696.0



1,931.8Cumulative payments as of:One year later


196.8



218.9



223.7



200.7



273.7



233.4



279.1



353.1



376.4



383.0Two years later


315.9



334.4



333.8



366.6



396.9



377.9



441.8



594.2



619.5Three years later


398.3



417.8



458.2



451.4



500.1



493.3



576.0



777.3Four years later


455.4



516.9



525.3



527.2



577.1



585.1



707.7Five years later


533.1



566.7



573.9



580.6



632.3



671.0Six years later


567.4



600.7



609.0



616.3



687.0Seven years later


590.4



627.3



634.3



654.4Eight years later


608.7



646.4



660.5Nine years later


622.4



665.1Ten years later


638.5Reserves re-estimated as of:One year later


573.9



596.7



617.9



630.1



724.8



864.8



1,114.6



1,461.7



1,564.3



1,674.0Two years later


574.1



621.6



634.3



672.3



792.1



880.8



1,094.0



1,418.1



1,545.4Three years later


593.3



638.0



673.9



721.8



812.2



890.1



1,096.7



1,412.5Four years later


607.3



674.9



717.2



741.6



826.9



903.2



1,107.2Five years later


644.6



711.8



724.5



752.2



836.6



924.4Six years later


673.5



714.0



734.8



762.1



857.9Seven years later


674.4



723.8



743.2



780.4Eight years later


687.5



733.6



756.8Nine years later


697.2



743.7Ten years later


705.7Favourable (unfavourable) development


(112.4
)


(140.4
)


(171.3
)


(158.5
)


(129.0
)


(69.0
)


46.7



(3.8
)


94.8



22.0




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Northbridges
    Accident Year Claims Reserve Development
 Accident year1998 &As at December 31

Prior


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008(In Cdn$)End of first year


593.3



226.2



207.7



227.7



299.5



404.2



522.4



573.1



531.6



508.1



640.8One year later


573.9



219.3



215.2



219.6



253.3



346.4



467.2



646.8



499.2



505.1Two years later


574.1



225.2



215.2



222.1



271.0



342.3



437.2



600.5



485.9Three years later


593.3



227.5



217.9



228.4



271.3



336.9



426.9



584.4Four years later


607.3



227.1



224.3



240.9



275.4



340.3



416.2Five years later


644.6



235.1



229.4



241.2



275.2



340.2Six years later


673.5



236.4



229.8



242.6



278.3Seven years later


674.4



233.2



228.6



247.3Eight years later


687.5



233.1



232.0Nine years later


697.2



234.8Ten years later


705.7Favourable (unfavourable) development


(18.9
)%


(3.8
)%


(11.7
)%


(8.6
)%


7.1
%


15.8
%


20.3
%


(2.0
)%


8.6
%


0.6
%     U.S.
    Insurance  Crum & Forster
    Reconciliation
    of Provision for Claims  U.S. Insurance
  2008


2007


2006


2005


2004Provision for claims and LAE at January 1


1,668.9



1,686.9



1,756.7



1,703.1



1,669.7Transfer of Fairmont to Runoff










(146.2
)






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


802.8



816.8



762.2



785.9



795.4Increase (decrease) in provision for prior accident years
    claims


59.0



(46.6
)


(48.9
)


(31.3
)


(30.1
)(1)Total incurred losses on claims and LAE


861.8



770.2



713.3



754.6



765.3Payments for losses on claims and LAEPayments on current accident years claims


(228.3
)


(217.2
)


(158.0
)


(171.5
)


(185.6
)Payments on prior accident years claims


(264.1
)


(571.0
)


(478.9
)


(529.5
)


(546.3
)Total payments for losses on claims and LAE


(492.4
)


(788.2
)


(636.9
)


(701.0
)


(731.9
)Provision for claims and LAE at December 31


2,038.3



1,668.9



1,686.9



1,756.7



1,703.1   (1)
    Offset in Crum & Forsters underwriting
    results by ceding premiums paid on strengthening prior
    years loss reserves, resulting in a net cost to
    Crum & Forster of $25.0.




---



##### 



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

1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008Provision for claims including LAE


2,491.9



2,187.5



1,736.6



1,318.2



1,238.4



1,538.2



1,578.2



1,610.6



1,686.9



1,668.9



2,038.3Cumulative payments as of:One year later


664.5



757.4



667.2



447.0



161.3



460.0



466.0



478.9



571.0



264.1Two years later


1,228.1



1,301.8



1,012.2



525.0



514.5



792.2



796.7



848.7



629.2Three years later


1,640.5



1,568.4



1,083.8



812.4



780.0



1,045.1



1,066.1



804.7Four years later


1,910.0



1,633.9



1,311.1



1,029.8



970.2



1,257.1



959.6Five years later


1,911.0



1,855.3



1,483.6



1,185.5



1,144.6



1,111.5Six years later


2,074.8



2,023.8



1,613.9



1,337.6



960.8Seven years later


2,223.0



2,151.5



1,739.9



1,137.6Eight years later


2,333.5



2,276.0



1,531.6Nine years later


2,444.2



2,085.4Ten years later


2,243.9Reserves re-estimated as of:One year later


2,507.0



2,263.1



1,691.0



1,337.7



1,278.6



1,508.1



1,546.9



1,561.7



1,640.3



1,727.9Two years later


2,523.5



2,269.2



1,708.3



1,411.7



1,285.9



1,536.0



1,509.2



1,525.3



1,716.5Three years later


2,526.4



2,282.0



1,754.8



1,420.7



1,308.2



1,513.3



1,499.7



1,640.4Four years later


2,540.7



2,325.1



1,765.2



1,438.6



1,296.8



1,545.5



1,616.7Five years later


2,577.2



2,348.0



1,779.1



1,437.0



1,330.0



1,674.8Six years later


2,603.9



2,361.6



1,794.1



1,469.0



1,457.2Seven years later


2,616.6



2,368.4



1,816.6



1,592.4Eight years later


2,633.7



2,388.5



1,945.5Nine years later


2,651.5



2,513.4Ten years later


2,779.7Favourable (unfavourable) development


(287.8
)


(325.9
)


(208.9
)


(274.2
)


(218.8
)


(136.6
)


(38.5
)


(29.8
)


(29.6
)


(59.0
)       Crum &
    Forsters Accident Year Claims Reserve
    Development
  Accident year1998 &As at December 31

Prior


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008End of first year


2,491.9



345.0



231.0



294.4



347.7



420.9



530.1



529.7



604.2



599.6



574.5One year later


2,507.0



404.0



179.3



296.6



313.9



383.5



470.9



518.5



594.0



582.5Two years later


2,523.5



407.3



183.7



324.1



312.2



389.1



455.9



491.6



555.1Three years later


2,526.4



405.8



187.1



322.8



316.7



377.8



414.2



489.7Four years later


2,540.7



412.4



174.6



326.7



306.8



376.8



401.9Five years later


2,577.2



408.5



174.9



310.1



308.0



378.9Six years later


2,603.9



409.5



183.2



319.6



311.8Seven years later


2,616.6



399.1



185.6



314.2Eight years later


2,633.7



401.4



189.5Nine years later


2,651.5



398.2Ten years later


2,779.7Favourable (unfavourable) development


(11.5
)%


(15.4
)%


18.0
%


(6.7
)%


10.3
%


10.0
%


24.2
%


7.6
%


8.1
%


2.9
%




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Asian
    Insurance  Fairfax Asia
    Reconciliation
    of Provision for Claims  Fairfax Asia
  2008


2007


2006


2005


2004Provision for claims and LAE at January 1


91.0



87.6



74.7



54.7



25.1Incurred losses on claims and LAEProvision for current accident years claims


65.5



43.1



34.7



39.6



24.9Foreign exchange effect on claims


0.1



2.2



2.1



(0.2
)


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


3.4



(4.4
)


2.8



5.1



(0.2
)Total incurred losses on claims and LAE


69.0



40.9



39.6



44.5



24.7Payments for losses on claims and LAEPayments on current accident years claims


(15.9
)


(11.0
)


(11.1
)


(11.2
)


(8.3
)Payments on prior accident years claims


(30.9
)


(26.5
)


(15.6
)


(13.3
)


(7.9
)Total payments for losses on claims and LAE


(46.8
)


(37.5
)


(26.7
)


(24.5
)


(16.2
)Provision for claims and LAE at December 31 before the undernoted


113.2



91.0



87.6



74.7



33.6Provision for claims and LAE at December 31 for First Capital


















21.1Provision for claims and LAE at December 31


113.2



91.0



87.6



74.7



54.7     Year acquiredFalcon Insurance


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


2001First Capital Insurance


2004




---



##### 



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

1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008Provision for claims including LAE


5.6



9.2



11.0



29.6



23.1



25.1



54.7



74.7



87.6



91.0



113.2Cumulative payments as of:One year later


0.9



2.3



5.7



19.0



10.1



7.9



13.3



15.6



26.5



30.9Two years later


1.4



5.3



7.9



26.1



14.1



13.1



21.9



32.6



45.2Three years later


3.2



6.3



9.7



27.9



16.5



15.9



29.1



44.6Four years later


3.4



7.0



10.8



29.1



17.8



17.3



32.6Five years later


3.4



7.1



11.6



29.5



18.2



17.9Six years later


3.4



7.2



11.6



29.7



18.5Seven years later


3.5



7.2



11.7



29.8Eight years later


3.5



7.2



11.7Nine years later


3.4



7.2Ten years later


3.4Reserves re-estimated as of:One year later


5.6



8.9



13.4



32.8



22.4



24.9



59.6



79.6



84.5



94.9Two years later


3.5



9.1



14.1



32.3



22.2



23.1



58.2



72.2



84.1Three years later


3.8



9.3



13.6



32.2



21.3



21.2



49.9



71.8Four years later


3.8



8.3



13.3



31.5



20.5



20.0



48.3Five years later


3.6



8.0



12.8



30.8



19.6



20.0Six years later


3.5



7.5



12.3



30.2



19.8Seven years later


3.5



7.4



11.9



30.4Eight years later


3.5



7.2



11.9Nine years later


3.4



7.2Ten years later


3.4Favourable (unfavourable) development


2.2



2.0



(0.9
)


(0.8
)


3.3



5.1



6.4



2.9



3.5



(3.9
)




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Reinsurance 
    OdysseyRe
    Reconciliation
    of Provision for Claims  OdysseyRe
  2008


2007


2006


2005


2004Provision for claims and LAE at January 1


4,475.6



4,403.1



3,865.4



3,132.5



2,340.9Incurred losses on claims and LAEProvision for current accident years claims


1,518.8



1,367.9



1,344.3



1,888.9



1,441.1Foreign exchange effect on claims


(143.2
)


26.6



46.6



(28.1
)


24.9Increase (decrease) in provision for prior accident years
    claims


(10.1
)


40.5



185.4



166.5



181.2Total incurred losses on claims and LAE


1,365.5



1,435.0



1,576.3



2,027.3



1,647.2Payments for losses on claims and LAEPayments on current accident years claims


(264.8
)


(251.4
)


(251.3
)


(380.7
)


(300.3
)Payments on prior accident years claims


(1,016.0
)


(1,111.1
)


(787.3
)


(913.7
)


(632.4
)Total payments for losses on claims and LAE


(1,280.8
)


(1,362.5
)


(1,038.6
)


(1,294.4
)


(932.7
)Provision for claims and LAE at December 31 before the undernoted


4,560.3



4,475.6



4,403.1



3,865.4



3,055.4Provision for claims and LAE at December 31 for Opus Re


















77.1Provision for claims and LAE at December 31


4,560.3



4,475.6



4,403.1



3,865.4



3,132.5




---



##### 



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

1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008Provision for claims including LAE


1,987.6



1,831.5



1,666.8



1,674.4



1,844.6



2,340.9



3,132.5



3,865.4



4,403.1



4,475.6



4,560.3Cumulative payments as of:One year later


594.1



608.5



596.2



616.2



601.8



632.4



913.7



787.3



1,111.1



1,016.0Two years later


1,054.6



1,041.3



1,009.9



985.4



998.8



1,212.9



1,298.5



1,614.0



1,808.2Three years later


1,352.9



1,332.8



1,276.4



1,295.5



1,423.6



1,455.7



1,835.7



2,160.9Four years later


1,546.2



1,505.5



1,553.1



1,601.6



1,562.6



1,898.4



2,221.0Five years later


1,675.4



1,718.4



1,802.2



1,665.8



1,932.4



2,206.1Six years later


1,828.1



1,901.2



1,827.3



1,968.7



2,188.1Seven years later


1,941.1



1,904.4



2,061.8



2,173.5Eight years later


1,896.4



2,102.7



2,224.6Nine years later


2,045.8



2,248.7Ten years later


2,164.5Reserves re-estimated as of:One year later


2,033.8



1,846.2



1,689.9



1,740.4



1,961.5



2,522.1



3,299.0



4,050.8



4,443.6



4,465.5Two years later


2,043.0



1,862.2



1,768.1



1,904.2



2,201.0



2,782.1



3,537.0



4,143.5



4,481.5Three years later


2,043.7



1,931.4



1,987.9



2,155.2



2,527.7



3,049.6



3,736.1



4,221.3Four years later


2,084.8



2,113.2



2,241.1



2,468.0



2,827.3



3,293.8



3,837.5Five years later


2,215.6



2,292.2



2,535.0



2,725.8



3,076.8



3,414.1Six years later


2,305.5



2,526.7



2,750.5



2,973.6



3,202.2Seven years later


2,429.1



2,702.1



2,968.9



3,079.3Eight years later


2,570.6



2,893.0



3,068.6Nine years later


2,735.4



2,985.4Ten years later


2,810.7Favourable (unfavourable) development


(823.1
)


(1,153.9
)


(1,401.8
)


(1,404.9
)


(1,357.6
)


(1,073.2
)


(705.0
)


(355.9
)


(78.4
)


10.1




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     OdysseyRes
    Accident Year Claims Reserve Development
  Accident Year1998 &As at December 31

Prior


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008End of first year


1,987.6



391.7



429.1



580.9



720.6



981.3



1,242.1



1,480.2



1,139.6



1,143.1



1,110.8One year later


2,033.8



397.4



436.0



568.7



673.5



923.8



1,149.3



1,427.6



1,087.4



1,095.2Two years later


2,043.0



412.4



445.0



512.7



661.6



856.4



1,119.7



1,321.2



1,047.5Three years later


2,043.7



440.4



483.0



510.2



675.4



824.1



1,074.6



1,297.5Four years later


2,084.8



491.4



557.7



529.2



717.7



818.8



1,055.9Five years later


2,215.6



580.9



617.0



571.6



719.4



813.7Six years later


2,305.5



691.7



656.8



601.0



739.1Seven years later


2,429.1



725.7



684.3



606.9Eight years later


2,570.6



751.8



691.7Nine years later


2,735.3



768.8Ten years later


2,810.7Favourable (unfavourable) development


(41.4
)%


(96.3
)%


(61.2
)%


(4.5
)%


(2.6
)%


17.1
%


15.0
%


12.3
%


8.1
%


4.2
%




---



##### 



Reinsurance 
    Other (Group Re and Advent)
    Reconciliation
    of Provision for Claims  Reinsurance 
    Other
  2008


2007


2006


2005


2004Provision for claims and LAE at January 1


554.4



558.8



632.3



459.2



342.4Transfer to
    Runoff(1)


(97.9
)














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


132.4



168.6



201.0



325.9



261.6Foreign exchange effect on claims


(86.7
)


65.0



(0.4
)


8.2



18.2Increase (decrease) in provision for prior accident years
    claims


2.3



(28.4
)


25.2



(0.9
)


(15.6
)Total incurred losses on claims and LAE


48.0



205.2



225.8



333.2



264.2Payments for losses on claims and LAEPayments on current accident years claims


(42.4
)


(54.4
)


(73.7
)


(55.6
)


(21.6
)Payments on prior accident years claims


(93.0
)


(155.2
)


(225.6
)


(104.5
)


(125.8
)Total payments for losses on claims and LAE


(135.4
)


(209.6
)


(299.3
)


(160.1
)


(147.4
)Provision for claims and LAE at December 31 for Advent


372.9















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


742.0



554.4



558.8



632.3



459.2CTR Life


34.9



21.5



24.8



29.3



27.3Provision for claims and LAE at December 31


776.9



575.9



583.6



661.6



486.5    (1) Transfer to Runoff of nSpire Res Group Re
    business in 2008.




---



##### 



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

1998


1999


2000


2001


2002


2003


2004


2005


2006


2007


2008Provisions for claims including LAE


156.3



205.7



209.8



232.4



226.1



263.3



267.6



315.6



373.5



456.5



742.0Cumulative payments as of:One year later


39.2



34.8



47.5



66.6



78.2



115.8



54.3



40.3



85.9



93.0Two years later


65.6



73.6



100.5



129.7



175.5



152.8



74.6



104.3



151.9Three years later


97.6



119.9



146.0



215.0



206.0



164.9



128.8



160.5Four years later


129.4



146.9



221.0



232.0



209.0



210.0



179.2Five years later


136.9



215.4



227.7



222.5



243.4



251.8Six years later


182.0



216.5



205.4



243.7



276.7Seven years later


183.1



189.0



220.4



265.2Eight years later


164.3



200.7



237.9Nine years later


172.7



213.3Ten years later


183.3Reserves re-estimated as of:One year later


171.6



191.1



205.3



229.5



268.2



286.3



279.6



319.4



429.4



383.8Two years later


164.5



185.2



202.8



258.5



295.2



302.9



288.2



361.9



375.8Three years later


163.1



185.5



222.7



277.5



310.1



317.3



326.7



322.9Four years later


161.3



202.4



242.0



283.2



323.4



348.4



302.8Five years later


176.3



216.9



245.3



291.1



348.1



338.0Six years later


183.5



217.6



251.5



307.9



343.5Seven years later


184.2



222.6



266.0



305.8Eight years later


189.0



235.4



266.9Nine years later


200.1



236.0Ten years later


201.0Favourable (unfavourable) development


(44.7
)


(30.3
)


(57.1
)


(73.4
)


(117.4
)


(74.7
)


(35.2
)


(7.3
)


(2.3
)


72.7   (1)
    The above table has been restated to reflect the transfer of
    nSpire Res Group Re business to Runoff effective
    January 1, 2008.




---



##### 



Runoff
    Reconciliation
    of Provision for Claims  Runoff
 2008


2007


2006


2005


2004Provision for claims and LAE at January 1


2,116.5



2,487.9



1,797.9



1,481.6



2,111.9Transfer to
    Runoff(1)


97.9







146.2







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


13.7



5.3



96.2



63.9



129.7Foreign exchange effect on claims


(30.5
)


21.0



29.9



7.3



62.2Increase in provision for prior accident years claims


64.1



90.9



75.8



442.9



115.9Increase in provision  Swiss Re commutation










412.6







(3.9
)Total incurred losses on claims and LAE


47.3



117.2



614.5



514.1



303.9Payments for losses on claims and LAEPayments on current accident years claims


(2.6
)


(4.1
)


(32.8
)


(31.0
)


(21.5
)Payments on prior accident years claims


(269.2
)


(484.5
)


(37.9
)(2)


(205.0
)(3)


(912.7
)Total payments for losses on claims and LAE


(271.8
)


(488.6
)


(70.7
)


(236.0
)


(934.2
)Provision for claims and LAE at December 31 before the undernoted


1,989.9



2,116.5



2,487.9



1,759.7



1,481.6Provision for claims and LAE at December 31 for Corifrance














38.2



Provision for claims and LAE at December 31


1,989.9



2,116.5



2,487.9



1,797.9



1,481.6    (1)
    Transfer to Runoff of nSpire Res Group Re business in
    2008, and of Fairmont in 2006.(2)
    Reduced by $587.4 of proceeds received from the commutation
    of the Swiss Re corporate adverse development cover.(3)
    Reduced by $570.3 of proceeds received and proceeds due from
    the commutation of two significant adverse development
    covers.    Asbestos,
    Pollution and Other Hazards
  General
    APH Discussion




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
       2008


2007


2006Gross


Net


Gross


Net


Gross


NetRunoff CompaniesProvision for APH claims and ALAE at January 1


1,039.0



305.2



1,153.2



333.2



1,286.5



366.7APH losses and ALAE incurred during the year


26.5



18.9



0.8



(6.5
)


10.3



7.0APH losses and ALAE paid during the year


113.2



31.0



115.0



21.5



143.6



40.5Provision for APH claims and ALAE at December 31


952.3



293.1



1,039.0



305.2



1,153.2



333.2Crum & ForsterProvision for APH claims and ALAE at January 1


511.8



442.7



509.2



443.5



533.5



475.0APH losses and ALAE incurred during the year


33.5



36.2



64.1



54.5



51.6



33.9APH losses and ALAE paid during the year


78.3



78.0



61.5



55.3



75.9



65.4Provision for APH claims and ALAE at December 31


467.0



400.9



511.8



442.7



509.2



443.5OdysseyRe(1)Provision for APH claims and ALAE at January 1


381.2



256.9



344.6



215.7



315.2



199.8APH losses and ALAE incurred during the year


76.4



45.1



100.1



77.5



61.9



40.3APH losses and ALAE paid during the year


62.8



41.6



63.5



36.3



32.5



24.4Provision for APH claims and ALAE at December 31


394.8



260.4



381.2



256.9



344.6



215.7Fairfax TotalProvision for APH claims and ALAE at January 1


1,932.0



1,004.8



2,007.0



992.4



2,135.2



1,041.5APH losses and ALAE incurred during the year


136.4



100.2



165.0



125.5



123.8



81.2APH losses and ALAE paid during the year


254.3



150.6



240.0



113.1



252.0



130.3Provision for APH claims and ALAE at December 31


1,814.1



954.4



1,932.0



1,004.8



2,007.0



992.4    (1)
    Net reserves presented for OdysseyRe exclude cessions under a
    stop loss agreement with nSpire Re which was commuted in
    2006.  Asbestos
    Claim Discussion




---



##### 



2008


2007


2006Gross


Net


Gross


Net


Gross


NetRunoff CompaniesProvision for asbestos claims and ALAE at January 1


655.4



199.9



729.8



219.0



857.4



248.6Asbestos losses and ALAE incurred during the year


7.1



4.0



6.2



(8.7
)


(22.9
)


(3.6
)Asbestos losses and ALAE paid during the year


73.5



17.1



80.6



10.4



104.7



26.0Provision for asbestos claims and ALAE at December 31


589.0



186.8



655.4



199.9



729.8



219.0Crum & ForsterProvision for asbestos claims and ALAE at January 1


391.5



333.6



404.4



348.2



426.9



376.7Asbestos losses and ALAE incurred during the year


23.1



25.2



31.1



24.3



38.2



22.7Asbestos losses and ALAE paid during the year


58.2



57.0



44.0



38.9



60.7



51.2Provision for asbestos claims and ALAE at December 31


356.4



301.8



391.5



333.6



404.4



348.2OdysseyRe(1)Provision for asbestos claims and ALAE at January 1


339.2



222.4



308.7



189.0



274.8



169.1Asbestos losses and ALAE incurred during the year


73.8



41.0



85.9



63.0



62.5



40.6Asbestos losses and ALAE paid during the year


52.4



32.9



55.4



29.6



28.6



20.7Provision for asbestos claims and ALAE at December 31


360.6



230.5



339.2



222.4



308.7



189.0Fairfax TotalProvision for asbestos claims and ALAE at January 1


1,386.1



755.9



1,442.9



756.2



1,559.1



794.4Asbestos losses and ALAE incurred during the year


104.0



70.2



123.2



78.6



77.8



59.7Asbestos losses and ALAE paid during the year


184.1



107.0



180.0



78.9



194.0



97.9Provision for asbestos claims and ALAE at December 31


1,306.0



719.1



1,386.1



755.9



1,442.9



756.2    (1)
    Net reserves presented for OdysseyRe exclude cessions under a
    stop loss agreement with nSpire Re which was commuted in
    2006.    insured-by-insured




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   ground-up,
  insured-by-insured
    Runoff


Crum & Forster


OdysseyReNet loss and ALAE reserves


186.8



301.8



230.53-year
    average net paid loss and ALAE


17.8



49.0



27.73-year
    survival ratio


10.5



6.2



8.3     Environmental
    Pollution Discussion




---



##### 



2008


2007


2006Gross


Net


Gross


Net


Gross


NetRunoff CompaniesProvision for pollution claims and ALAE at January 1


333.4



86.0



360.5



90.5



358.0



90.2Pollution losses and ALAE incurred during the year


19.2



13.4



(2.4
)


0.9



35.6



12.1Pollution losses and ALAE paid during the year


26.8



10.1



24.7



5.4



33.1



11.8Provision for pollution claims and ALAE at December 31


325.8



89.3



333.4



86.0



360.5



90.5Crum & ForsterProvision for pollution claims and ALAE at January 1


94.0



85.0



81.9



73.5



81.2



74.2Pollution losses and ALAE incurred during the year


8.8



9.4



23.8



22.2



12.1



9.9Pollution losses and ALAE paid during the year


14.6



15.5



11.7



10.7



11.4



10.6Provision for pollution claims and ALAE at December 31


88.2



78.9



94.0



85.0



81.9



73.5OdysseyRe(1)Provision for pollution claims and ALAE at January 1


42.0



34.5



35.9



26.7



40.4



30.7Pollution losses and ALAE incurred during the year


2.6



4.1



14.2



14.5



(0.6
)


(0.3
)Pollution losses and ALAE paid during the year


10.4



8.7



8.1



6.7



3.9



3.7Provision for pollution claims and ALAE at December 31


34.2



29.9



42.0



34.5



35.9



26.7Fairfax TotalProvision for pollution claims and ALAE at January 1


469.4



205.5



478.3



190.7



479.6



195.1Pollution losses and ALAE incurred during the year


30.6



26.9



35.6



37.6



47.1



21.7Pollution losses and ALAE paid during the year


51.8



34.3



44.5



22.8



48.4



26.1Provision for pollution claims and ALAE at December 31


448.2



198.1



469.4



205.5



478.3



190.7    (1)
    Net reserves presented for OdysseyRe exclude cessions under a
    stop loss agreement with nSpire Re which was commuted in
    2006.  ground-up,
      Runoff


Crum & Forster


OdysseyReNet loss and ALAE reserves


89.3



78.9



29.93-year
    average net paid loss and ALAE


9.1



12.3



6.43-year
    survival ratio


9.8



6.4



4.7   Other
    Mass Tort/Health Hazards Discussion




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED




---



##### 



year-end
  2008


2007


2006Gross


Net


Gross


Net


Gross


NetRunoff CompaniesProvision for health hazards claims and ALAE at January 1


50.2



19.5



62.9



23.9



71.1



28.0Health hazards losses and ALAE incurred during the year


0.2



1.5



(3.0
)


1.3



(2.4
)


(1.5
)Health hazards losses and ALAE paid during the year


12.9



3.8



9.7



5.7



5.8



2.6Provision for health hazards claims and ALAE at December 31


37.5



17.2



50.2



19.5



62.9



23.9Crum & ForsterProvision for health hazards claims and ALAE at January 1


26.3



24.1



22.9



21.8



25.4



24.1Health hazards losses and ALAE incurred during the year


1.6



1.6



9.2



8.0



1.3



1.3Health hazards losses and ALAE paid during the year


5.5



5.5



5.8



5.7



3.8



3.6Provision for health hazards claims and ALAE at December 31


22.4



20.2



26.3



24.1



22.9



21.8     Summary
    Reinsurance
    Recoverables
  and/or




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     A.M. Best rating


Gross


Net(or S&P


reinsurance


reinsuranceGroup

Principal reinsurers

equivalent)(1)


recoverable(2)


recoverable(3)Swiss Re

Swiss Re America Corp.




A+



823.1



522.5Nationwide

Nationwide Mutual Ins Co.




A+



356.0



355.9Lloyds

Lloyds




A



300.7



267.7Munich

Munich Reinsurance America, Inc.




A+



216.5



192.4Aegon

Arc Re




(4
)


166.4



15.8Everest

Everest Reinsurance Co.




A+



125.9



93.2AIG

Transatlantic Re




A



121.2



117.9HDI

Hannover Rueckversicherung




A



118.6



88.7Ace

Insurance Co. of North America




A+



113.8



108.8Berkshire Hathaway

General Reinsurance Corp.




A++



103.3



92.5SCOR

SCOR Canada Reinsurance Co.




A-



89.9



81.4AXA

AXA Re




A



87.7



69.5Travelers

Travelers Indemnity Co.




A+



77.2



72.5CNA

Continental Casualty




A



74.1



57.8Globale Re

Global International Reinsurance. Co. Ltd.




NR



70.1



22.9Arch Capital

Arch Reinsurance Co.




A



56.5



11.3Genworth

Genworth Life and Annuity Insurance Company




A+



53.7



53.7Liberty Mutual

Employers Insurance of Wausau




A



46.4



45.9GIC

General Insurance Corp. of India




A-



38.6



37.9Chubb

Federal Insurance Co.




A++



37.8



37.5XL

XL Reinsurance America Inc




A



35.7



31.5Hartford

New England Re




A+



35.5



34.5Max Capital

Max Bermuda Ltd.




A-



33.5



4.0Platinum

Platinum Underwriters Reinsurance Co.




A



32.5



26.9PartnerRe

Partner Reinsurance Co. of US




A+



32.3



28.4Aviva

Aviva International Insurance Ltd.




A+



30.5



29.6Met Life

Metropolitan Life Insurance Company




A+



28.6



28.6Sompo

Sompo Japan Insurance Inc.




A+



28.6



25.8Toa Re

Toa Reinsurance Co. of America




A



25.4



22.4Allstate

Allstate Insurance Co.




A+



25.4



25.4Aioi

Aioi Insurance Co. Ltd




A



24.8



18.5IAT Ins

Harco National Insurance Co.




A-



24.6



Aspen

Aspen Insurance UK Ltd




A



23.2



22.0White Mountains

White Mountains Reinsurance Co. of America




A-



22.7



21.6American Financial

Great American Assurance Co.




A



22.7



22.7CCR

Caisse Centrale de Reassurance




A++



22.5



21.9Manulife

John Hancock Life Insurance Co.




A++



21.0



17.3Zurich

Zurich Insurance Co.




A



20.3



10.6FM Global

Factory Mutual Insurance Co.




A+



18.4



18.3Mitsui

Mitsui Sumitomo Re Ltd




A+



17.2



16.9Enstar

Harper Insurance Ltd




NR



17.0



14.3Dukes Place

Seaton Insurance Co.




NR



16.5



16.4Starr

Starr Indemnity & Liability Co.




A



16.4



16.4Axis

Axis Reinsurance Co.




A



15.8



13.6Brit

Brit Insurance Ltd




A



15.6



14.8Cigna

Connecticut General Life Insurance Co.




A



14.8



14.7Wüstenrot

Wüstenrot & Württembergische




NR



14.6



9.6Validus

Validus Reinsurance Ltd




A-



13.9



8.2Singapore Re

Singapore Re Corp




A-



13.6



13.1Tokio Marine

Tokio Marine & Nichido Fire Insurance Co. Ltd




A++



13.5



13.4Sub-total










3,754.6



2,907.2Other reinsurers










849.8



675.2Total reinsurance recoverable








4,604.4



3,582.4Provision for uncollectible reinsurance








370.2



370.2Net reinsurance recoverable








4,234.2



3,212.2   (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
    Reinsurance Recoverables
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


187.1



10.9



176.2A+


1,825.2



301.6



1,523.6A


1,041.0



208.3



832.7A-


341.1



94.6



246.5B++


37.1



4.2



32.9B+


47.8



19.0



28.8B or lower


117.3



4.3



113.0Not rated


925.2



352.9



572.3Pools & associations


82.6



26.2



56.44,604.4



1,022.0



3,582.4Provisions for uncollectible reinsurance




370.2







370.2Net reinsurance recoverable




4,234.2







3,212.2




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Reinsurance
    Recoverables  Operating Companies
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


122.4



10.9



111.5A+


938.4



277.2



661.2A


698.0



139.3



558.7A-


278.1



89.8



188.3B++


30.9



3.7



27.2B+


40.9



16.0



24.9B or lower


46.4



3.0



43.4Not rated


344.3



138.3



206.0Pools & associations


68.7



26.2



42.52,568.1



704.4



1,863.7Provisions for uncollectible reinsurance




121.9







121.9Net reinsurance recoverable




2,446.2







1,741.8   Reinsurance
    Recoverables  Runoff Operations
  OutstandingA.M. Best




balances


Netrating

Gross


for which


unsecured(or S&P

reinsurance


security


reinsuranceequivalent)

recoverable


is held


recoverableA++


64.7







64.7A+


886.8



24.4



862.4A


343.0



69.0



274.0A-


63.0



4.8



58.2B++


6.2



0.5



5.7B+


6.9



3.0



3.9B or lower


70.9



1.3



69.6Not rated


580.9



214.6



366.3Pools & associations


13.9







13.92,036.3



317.6



1,718.7Provisions for uncollectible reinsurance




248.3







248.3Net reinsurance recoverable




1,788.0







1,470.4




---



##### 



Float




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     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)2004


147.4



5,898.7



2.5
%


5.2
%2005


(437.5
)


7,323.9



(6.0
%)


4.4
%2006


212.6



8,212.9



2.6
%


4.3
%2007


281.3



8,617.7



3.3
%


4.3
%2008


(457.7
)


8,917.8



(5.1
%)


4.1
%Weighted average since inception










(2.8
%)


5.1
%Fairfax weighted average financing differential since inception:
    2.3%     TotalInsuranceCanadian


U.S.


Asian





andInsurance


Insurance


Insurance


Reinsurance


Reinsurance


Runoff


Total2004


1,404.2



1,657.1



119.7



3,498.7



6,679.7



741.3



7,421.02005


1,461.8



1,884.9



120.2



4,501.1



7,968.0



788.6



8,756.62006


1,586.0



1,853.8



85.4



4,932.6



8,457.8



2,061.0



10,518.82007


1,887.4



1,812.8



86.9



4,990.4



8,777.5



1,770.5



10,548.02008


1,739.1



2,125.1



68.9



5,125.0



9,058.1



1,783.8



10,841.9    Insurance
    Environment




---



##### 



Investments    Average


Interest and dividend incomeinvestments at


Pre-tax


After taxcarrying value


Amount


Yield


Per share


Amount


Yield


Per share(%)


($)





(%)


($)1986


46.3



3.4



7.34



0.70



1.8



3.89



0.38(Up and Down Arrow)1999


10,020.3



532.7



5.32



39.96



348.0



3.47



26.102000


11,291.5



534.0



4.73



40.54



377.6



3.34



28.662001


10,264.3



436.9



4.26



33.00



297.1



2.89



22.442002


10,377.9



436.1



4.20



30.53



292.2



2.82



20.462003


11,527.5



331.9



2.88



23.78



215.8



1.87



15.462004


12,955.8
(1)


375.7



2.90



27.17



244.3



1.89



17.662005


14,142.5
(1)


466.1



3.30



28.34



303.0



2.14



18.422006


15,827.0
(1)


746.5



4.72



42.03



485.3



3.07



27.322007


17,898.0
(1)(2)


761.0



4.25



42.99



494.7



2.76



27.952008


19,468.8
(1)(2)


626.4



3.22



34.73



416.6



2.14



23.10    (1)
    Net of $29.4 (2007  $1,062.8; 2006 
    $783.3; 2005  $700.3; 2004  $539.5) of
    short sale and derivative obligations of the holding company and
    the subsidiary companies.(2)
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously, these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively and
    accordingly, prior period investment balances in this table have
    not been restated.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Cash andshort term





Preferred


Common


Real





Per shareinvestments


Bonds(2)


stocks


stocks(3)


estate


Total


($)1985


6.4



14.1



1.0



2.5







24.0



4.80(Up and Down Arrow)1999


1,766.9



9,165.9



92.3



1,209.0



55.6



12,289.7



915.352000


1,663.0



7,825.5



46.7



813.6



50.8



10,399.6



793.812001


1,931.3



7,357.3



79.4



811.7



49.1



10,228.8



712.762002


2,033.2



7,390.6



160.1



992.1



20.5



10,596.5



753.902003


6,120.8



4,705.2



142.3



1,510.7



12.2



12,491.2



901.352004


4,075.0
(1)


7,260.9



135.8



1,960.9



28.0



13,460.6
(1)


840.80
(1)2005


4,385.0
(1)


8,127.4



15.8



2,324.0



17.2



14,869.4
(1)


835.11
(1)2006


5,188.9
(1)


9,017.2



16.4



2,579.2



18.0



16,819.7
(1)


948.62
(1)2007(4)


3,965.7
(1)


11,669.1



19.9



3,339.5



6.5



19,000.7
(1)


1,075.50
(1)2008(4)


6,343.5
(1)


9,069.6



50.3



4,480.0



6.4



19,949.8
(1)


1,140.85
(1)   (1)
    
    Net of $29.4 (2007  $1,062.8; 2006 
    $783.3; 2005  $700.3; 2004  $539.5) of
    short sale and derivative obligations of the holding company and
    the subsidiary companies.(2)
    
    Includes credit derivatives.(3)
    
    Includes investments at equity and equity derivatives.(4)
    
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously, these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively and
    accordingly, prior period investment balances in this table have
    not been restated.        Carrying value ofIssuer Credit Rating

fixed income portfolio


%AAA


6,512.5



75.2AA


1,377.8



15.9A


194.9



2.3BBB


2.1



0.0BB


10.0



0.1B


232.0



2.7Lower than B and unrated


325.3



3.8Total


8,654.6



100.0




---



##### 



Interest
    Rate Risk
      December 31, 2008Hypothetical $ change effect on:Fair value of


Other


Net


Total fair value offixed income


comprehensive


earnings


fixed income


HypotheticalChange in interest rates

portfolio


income (pre-tax)


(pre-tax)


portfolio


% change200 basis point increase


7,275.6



(518.7
)


(860.3
)


(1,379.0
)


(15.9
)100 basis point increase


7,887.2



(290.5
)


(476.9
)


(767.4
)


(8.9
)No change


8,654.6















100 basis point decrease


9,507.0



308.1



544.3



852.4



9.8200 basis point decrease


10,309.6



650.2



1,004.8



1,655.0



19.1




---



##### 



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


unrealizedAverage





Net


Change in


recorded in:


gains


Total returninvestments


Interest


realized


unrealized





Other


(losses)


on averageat carrying


and


gains


gains


Net


comprehensive


on equity method


investmentsvalue


dividends


(losses)


(losses)


earnings


income


investments





(%)1986


46.3



3.4



0.7



(0.2
)














3.9



8.4(Up and Down Arrow)1999


10,020.3



532.7



63.8



(871.4
)














(274.9
)


(2.7
)2000


11,291.5



534.0



259.1



584.1















1,377.2



12.22001


10,264.3



436.9



121.0



194.0















751.9



7.32002


10,377.9



436.1



465.0



263.2















1,164.3



11.22003


11,527.5



331.9



826.1



142.4















1,300.4



11.32004


12,955.8
(1)


375.7



300.5
(2)


165.6















841.8



6.52005


14,142.5
(1)


466.1



385.7



73.0















924.8



6.52006


15,827.0
(1)


746.5



789.4
(3)


(247.8
)














1,288.1



8.12007


17,898.0
(1)(4)


761.0











1,639.4



304.5



(131.2
)


2,573.7



14.42008


19,468.8
(1)(4)


626.4











2,720.5



(426.6
)


278.3



3,198.6



16.4Cumulative from inception






6,059.1



3,887.8







4,359.9















9.8
(5)   (1)
    
    Net of $29.4 (2007  $1,062.8; 2006 
    $783.3; 2005  $700.3; 2004  $539.5) of
    short sale and derivative obligations of the holding company and
    the subsidiary companies.(2)
    
    Excludes the $40.1 gain on the companys 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 secondary
    offering of OdysseyRe, the $15.7 loss on the companys
    repurchase of outstanding debt at a premium to par and the $8.1
    dilution loss on conversions during 2006 of the OdysseyRe
    convertible senior debenture.(4)
    
    Effective January 1, 2007, Canadian Generally Accepted
    Accounting Principles changed, requiring the company to carry
    most of its investments at fair value, whereas previously these
    investments would have been carried at cost or amortized cost.
    The company adopted these new requirements prospectively and
    accordingly, prior period investment balances in this table have
    not been restated.(5)
    
    Simple average of the total return on average investments for
    each of the 23 years.




---



##### 



Capital
    Resources and Management
    2008


2007


2006(1)


2006


2005


2004Holding company cash, short term investments and marketable
    securities, net of short sale and derivative obligations


1,555.0



963.4



783.6



767.4



559.0



566.8Holding company debt


869.6



1,063.2



1,181.5



1,202.6



1,365.3



1,422.9Subsidiary debt


910.2



915.0



974.2



981.3



933.2



862.2Other long term obligations  holding company


187.7



192.6



197.1



197.1



244.5



247.6Total debt


1,967.5



2,170.8



2,352.8



2,381.0



2,543.0



2,532.7Net debt


412.5



1,207.4



1,569.2



1,613.6



1,984.0



1,965.9Common shareholders equity


4,866.3



4,121.4



2,799.6



2,720.3



2,507.6



2,665.1Preferred equity


102.5



136.6



136.6



136.6



136.6



136.6Non-controlling interests


1,382.8



1,585.0



1,300.6



1,292.9



751.4



579.5Total equity and non-controlling interests


6,351.6



5,843.0



4,236.8



4,149.8



3,395.6



3,381.2Net debt/total equity and non-controlling interests


6.5
%


20.7
%


37.0
%


38.9
%


58.4
%


58.1
%Net debt/net total
    capital(2)


6.1
%


17.1
%


27.0
%


28.0
%


36.9
%


36.8
%Total debt/total
    capital(3)


23.7
%


27.1
%


35.7
%


36.5
%


42.8
%


42.8
%Interest
    coverage(4)


16.4
x


11.3
x


5.2
x


5.2
x


n/a



2.6x   (1)
    
    Balances reflect the adjustment at January 1, 2007 upon
    adoption of the new accounting standards described in
    note 2 to the consolidated financial statements.(2)
    
    Net total capital is calculated by the company as the sum of
    total shareholders equity, non-controlling interests and
    net debt.(3)
    
    Total capital is calculated by the company as the sum of
    total shareholders equity, non-controlling interests and
    total debt.(4)
    
    Interest coverage is calculated by the company as the sum of
    earnings (loss) from operations before income taxes and interest
    expense divided by interest expense.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
           Number of


Averagesubordinate


issue/repurchase


Net proceeds/Date

voting shares


price per share


(repurchase cost)2004  issue of shares


2,406,741



124.65



299.72004  repurchase of shares


(215,200
)


146.38



(31.5
)2005  issue of shares


1,843,318



162.75



299.82005  repurchase of shares


(49,800
)


148.59



(7.4
)2006  repurchase of shares


(67,800
)


113.57



(7.7
)2007  repurchase of shares


(38,600
)


181.35



(7.0
)2008  issue of shares


886,888



216.83



192.32008  repurchase of shares


(1,066,601
)


264.39



(282.0
)




---



##### 



Net premiums written to surplus(total shareholders equity)2008


2007


2006


2005


2004InsuranceNorthbridge (Canada)


1.0



0.7



1.0



1.1



1.3Crum & Forster (U.S.)


0.8



0.8



1.0



0.9



0.9Fairmont
    (U.S.)(1)


n/a



n/a



n/a



0.9



1.0Fairfax Asia


0.3



0.3



0.4



0.5



0.6ReinsuranceOdysseyRe


0.7



0.8



1.1



1.5



1.6Other(2)


0.6



0.6



1.2



1.1



1.5Canadian insurance industry


1.0



1.0



1.0



1.1



1.2U.S. insurance industry


1.0



0.9



0.9



1.0



1.1   (1)
    
    Crum & Forster acquired the ongoing Fairmont
    business in 2006.(2)
    
    Other includes Group Re and (effective September 11,
    2008, as described in note 17 to the consolidated financial
    statements) Advent.




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     StandardA.M. Best


& Poors


Moodys


DBRSIssuer Credit RatingsFairfax Financial Holdings Limited


bbb



BBB-
(2)


Ba2



BBB (low
)Crum & Forster Holdings Corp.


bbb



BB+



Ba2



Odyssey Re Holdings Corp.


bbb



BBB-



Baa3



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


A



BBB+



Baa2



Odyssey Re Holdings
    Corp.(1)


A



A-



A3



Lombard General Insurance Company of Canada


A



A-







Commonwealth Insurance Company


A



A-







Markel Insurance Company of Canada


A



A-







Federated Insurance Company of Canada


A



A-







CRC (Bermuda) Reinsurance Limited


A











First Capital Insurance Limited


A











Falcon Insurance Company (Hong Kong) Limited






A-







   (1)
    
    Financial strength ratings apply to the operating
    companies(2)
    
    Reflects Standard & Poors upgrade of Fairfax from
    BB+ to BBB- in early 2009    Liquidity




---



##### 



Contractual
    Obligations
    Less than








More than1 year


1 - 3 years


3 - 5 years


5 years


TotalNet claims liability


2,739.2



3,221.5



1,916.2



3,166.5



11,043.4Long term debt obligations  principal


14.4



2.0



406.7



1,392.9



1,816.0Long term debt obligations  interest


132.0



263.7



236.7



625.7



1,258.1Operating leases  obligations


48.4



73.3



32.5



76.4



230.6Other long term liabilities  principal


4.6



12.8



8.7



161.6



187.7Other long term liabilities  interest


16.2



30.9



29.0



67.4



143.52,954.8



3,604.2



2,629.8



5,490.5



14,679.3




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   SEC
    Subpoenas
    Lawsuits
    Managements
    Evaluation of Disclosure Controls and Procedures
    Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f)
    Internal Control-Integrated Framework. Internal Control  Integrated
    Framework
    Issues
    and Risks




---



##### 



Claims
    Reserves
    Latent
    Claims
    Recoverable
    from Reinsurers
      Cost
    of Reinsurance and Adequate Protection




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
   Catastrophe
    Exposure
    Prices
    Foreign
    Exchange
    Cost
    of Revenue
    Regulation
    Taxation
    Bonds,
    Common and Preferred Stocks and Derivative Securities
    Holdings




---



##### 



Goodwill
    Ratings
    Holding
    Company
    Financial
    Strength
    Information
    Requests or Proceedings by Government Authorities
    Lawsuits
    Change in
    Accounting Policy
      International
    Financial Reporting Standards




---



##### 



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




---



##### 



Provision
    for Other than Temporary Impairment in the Value of
    Investments
    Valuation
    Allowance for Recovery of Future Income Taxes
    Assessment
    of Goodwill for Potential Impairment
    Compliance
    with Corporate Governance Rules




---



##### 



FAIRFAX FINANCIAL HOLDINGS
    LIMITED
     Forward-Looking
    Statements
      Quarterly
    Data (unaudited,
    except for full year)
  Years
    ended December 31
  First


Second


Third


Fourth


FullQuarter


Quarter


Quarter


Quarter


Year2008Revenue


2,390.8



1,245.3



2,155.1



2,184.2



7,975.4Net earnings


631.8



27.6



467.6



346.8



1,473.8Net earnings per share

$
34.72


$
0.84


$
25.40


$
19.73


$
80.38Net earnings per diluted share

$
33.78


$
0.84


$
25.27


$
19.62


$
79.532007Revenue


1,535.0



1,670.1



1,871.2



2,407.4



7,483.7Net earnings


110.9



168.1



253.2



563.6



1,095.8Net earnings per share

$
6.10


$
9.32


$
14.12


$
31.71


$
61.20Net earnings per diluted share

$
5.88


$
8.92


$
13.47


$
30.15


$
58.382006Revenue


1,714.5



1,935.6



1,515.1



1,638.5



6,803.7Net earnings (loss)


198.4



229.2



(359.2
)


159.1



227.5Net earnings (loss) per share

$
10.99


$
12.73


$
(20.41
)

$
8.81


$
12.17Net earnings (loss) per diluted share

$
10.51


$
12.14


$
(20.41
)

$
8.45


$
11.92




---



##### 



Stock
    Prices and Share Information
      First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Cdn$)2008High


342.20



340.00



350.00



390.00Low


255.32



240.01



221.94



303.85Close


298.90



261.00



341.14



390.002007High


276.00



270.48



262.54



311.87Low


200.00



203.50



195.25



222.16Close


260.00



203.50



242.52



287.002006High


179.09



151.51



159.85



241.00Low


120.00



100.00



107.52



141.59Close


124.20



106.16



145.03



231.67     First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(US$)2008High


343.00



336.00



330.00



355.48Low


258.23



235.70



210.50



241.71Close


287.10



253.90



328.50



313.412007High


238.75



234.42



260.57



310.34Low


169.41



191.67



180.00



228.64Close


224.58



191.67



244.00



286.132006High


156.00



130.00



142.50



209.00Low


102.50



88.87



94.99



126.91Close


107.21



95.03



130.11



198.50