Good morning, welcome to Fairfax 2020 year-end results conference call. Your lines have been placed in a listen-only mode. After the presentation, we'll conduct a question-and-answer session. At that time, to ask a question, please press star one on your phone keypad. For time's sake, we ask that you limit your questions to one. Today's conference is being recorded. If you have any objection, you may disconnect at this time. Your host for today's call is Prem Watsa, with opening remarks from Mr. Derek Bulas. Mr. Bulas, please begin.
Good morning, welcome to our call to discuss Fairfax's 2020 year-end results. This call may include forward-looking statements. Actual results may differ, perhaps materially from those contained in such forward-looking statements as a result of a variety of uncertainties and risk factors, the most foreseeable of which are set out under risk factors in our base shelf prospectus, which has been filed with Canadian securities regulators and is available on SEDAR, which now include the risk of adverse consequences to Fairfax's business, investments, and personnel resulting from or related to the COVID-19 pandemic. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements, except as required by applicable securities law. I'll now turn the call over to our Chairman and CEO, Prem Watsa.
Thank you, Derek. Good morning, ladies and gentlemen. Welcome to Fairfax's 2020 year-end conference call. I'm going to give you some of the highlights and then pass the call to Jen Allen, our Chief Financial Officer, for additional financial and accounting details. 2020, as all of you know, was an unprecedented year. I'm not sure many of us would believe when we left our offices last March that almost a year later, we would still be dealing with this pandemic to this degree. We can see the light at the end of the tunnel as multiple vaccines now exist and testing has improved significantly. The majority of our employees worldwide have worked from home for most of 2020, not missing a beat. I wanted to again thank all our employees all over the world who have been fully committed over this period to provide outstanding service to our customers.
I am very grateful to all of them. With vaccines being given now all over the world, we expect this to come to an end, and we expect to return to normalcy soon. Now, coming to our results. Fairfax's net earnings were $218 million in 2020, versus $2 billion in 2019, which equates to net earnings per diluted share of $6.29 in 2020, versus $69.79 in 2019. Under the circumstances, we are very pleased about our performance in 2020, which was a real life stress test. Fairfax's book value per share in 2020 increased by 0.6%, basically flat, adjusted for the $10 per share common dividend paid in the first quarter of 2020 to $478 per share. We had earnings in 2020 of $218 million, as I said, reflecting the effects of the pandemic on both our underwriting and investment results.
Our net loss on investments of approximately $1.5 billion at the end of the first quarter completely reversed, and we finished 2020 with net gains of $313 million, an increase of $1.8 billion. In 35 years, we've never experienced swings in the stock prices like we did in 2020. Our float increased by 8% in 2020 to $24.3 billion, and our float per share increased by 11% to $927 per share. Our insurance and reinsurance companies produced a consolidated combined ratio of 97.8% for the year, which included catastrophe losses of $644 million, or 4.7 combined ratio points, and COVID-19 losses of $669 million, or 4.8 combined ratio points. Excluding COVID-19 losses, the consolidated combined ratio was 93%, with 12.5% growth in gross premiums written on the back of a strong pricing environment. In the fourth quarter, total gross premiums were up 16%.
We had some significant growth in gross premiums as Allied World was up 22% for the year, 26% for the fourth quarter, Odyssey 15% for the year, 24% for the fourth quarter, Northbridge 14% for the year, 22% for the fourth quarter. All of our major insurance companies, with the exception of Brit, generated combined ratios of less than 100%. That's despite unprecedented times that included a high frequency of catastrophes and a global pandemic. More on this from Jen Allen. In 2020, we booked net COVID losses, as I said, of $669 million across all of our companies. Of this, approximately 35% comes from business interruption exposures, primarily outside the U.S., about 34% comes from event cancellation coverages. The balance comes from areas such as casualty, surety, and travel lines. On a gross basis, approximately 60% of our COVID provisions are in IBNR.
Paid losses are about 20%, and case reserves make up the remaining 20%. As you can see, there's still considerable uncertainty as to the ultimate cost of the virus. The IBNR estimates may prove excessive in some of our companies, and they may not be enough in others. As we are all well aware, the pandemic is ongoing. As long as it persists and disrupts the economy, new losses may emerge. The size of the ultimate loss will also depend to some extent on various court outcomes, as litigation has been filed in many jurisdictions. We remain comfortable with the provisions we have made to date in the context of the current market environment. Our reserves, of course, remain strong, with consolidated redundancies in our insurance and reinsurance operations in 2020 of $455 million, or 3.3% of the premiums.
Our insurance businesses in many parts of the world are seeing price increases anywhere from 10%-30%, and terms are tightening. The prospects of our insurance business are excellent, as we think we are in a hard market and well-positioned to expand significantly. Last quarter, I mentioned our excitement about Ki, a standalone business begun by Brit, the first fully digital follow-on syndicate at Lloyd's. It is doing very well. I should also mention that Digit, our fully digital insurance company in India, run by Kamesh Goyal, had another year of exceptional growth. In three years, it has gone from a startup to writing in excess of $400 million and is expected to be profitable, including investment income for the year ended March 31st, 2021. Digit raised $25 million from private equity investors at $1.9 billion at year-end 2020.
That continues to be valued on our books at $0.9 billion, and we don't expect any changes. Of course, that's on a 100% basis. Also, the Indian budget allowed us to go to 74% from 49%. For the year, operating income was strong at $916 million. Net gains on investment for the year were $313 million, with losses on net equity exposures of $157 million, offset by net gains on bonds. The net losses on equities included losses on our last remaining short position, which was finally closed at the end of the year, partially offset by net gains in Central, BlackBerry convertible, and the Hamblin Watsa Asian Fund. As mentioned in our 2019 annual report, we will never short stock indices or individual companies again. Net gains on our bond portfolio was $562 million, primarily on our corporate bonds that were purchased in the first and second quarters of 2020.
As we have mentioned at our annual meetings and in our annual reports, quarterly reports, with IFRS accounting that stocks and bonds are recorded at market, subject to mark-to-market gains or losses, quarterly and annual income will fluctuate, and investment results will only make sense over the longer term. In the first quarter of 2020, we had a negative 3.6% return on our investment portfolio. By the end of the year, our investment returns more than reversed, and we ended the year with a positive return of 2.7%. I have previously highlighted this to you, I'll do it once more. If you look at page 188 of our 2019 annual report, last column, shows the annual total return on our investment portfolio for the last 34 years. We updated, of course, for 2020. There were four years when we had a negative investment return.
In each case, we rebounded significantly. From that table, in 1990, we had a -4.4% return. 1991, the following year, up 14.6%. 1999, -2.7% return. 2000, the following year, up 12.2%. 2013, -4.3%. 2014, up 8.6%. 2016, - 2.2%. 2017, 6.8%. That was only four times in 34 years. Each time, investors worried about our investments. Each time, investment results were much better than they expected. This time, our investments have rebounded more quickly. Our history has shown that our returns are very lumpy, and this has worked for us over the last 35 years. We have never focused on steady quarterly earnings. As I've said previously, long-term value investing has gone through a very difficult time for many years now. Valuations of value-oriented stocks versus growth stocks, particularly technology, have never been so extreme, exceeding even the extremes of the dotcom era in 2000.
As the economy normalizes, we expect a reversion to the mean, with value-oriented stocks coming to the fore. After the Pfizer vaccine was announced in early November 2020, we started to see this taking place. Two examples very quickly may make it clear for you. Fairfax India was selling at $6.80 per share at the end of the third quarter, while its book value was more than $16 per share. Today, it's up to $12.40 per share. We think it's only a matter of time before Fairfax India exceeds its 2020 high and does exceptionally well as the Indian economy recovers from COVID-19. The Indian government came out with an exceptionally business-friendly budget recently. Atlas Corp. is another one that I mentioned to you, run by David Sokol and Bing Chen, closed 2019 at $14 per share, went down to $6.30 per share in March. Today, it's at $12.70 per share.
Atlas is financially very strong, has great management, and we think it's only a matter of time before it exceeds its previous high. We expect a significant return on our stock portfolio as the economy continues to normalize. In November, Fairfax and Allied World entered into an agreement with Cornell Capital and Hudson Structured Capital Management to sell its majority ownership interest in Vault Insurance. We will continue to own a 10% stake in Vault following the sale. Scott Carmilani was instrumental in creating and growing Vault and as evident from his role with Fairfax, is chairman of the board of Vault. Closing of this transaction is subject to various regulatory approvals expected to occur in the first quarter of 2021.
We are very grateful to Scott for all his contributions to Fairfax, especially at Allied World, a company which he led from being a startup to becoming an industry-leading and highly successful worldwide insurance and reinsurance business. In December, Fairfax Africa completed its previously announced transaction with Helios Holdings. It was renamed Helios Fairfax Partners and continues to be listed on the Toronto Stock Exchange. Helios Holdings has been investing successfully in Africa for over 15 years. We are very excited about this transaction and look forward to our partnership with Toby and Baba, the co-founders of Helios Holdings. In December, we entered into an agreement with CVC Capital Partners, whereby CVC will acquire 100% of RiverStone Barbados, our European run-off operation. OMERS, our partner, will also sell its 40% interest as part of the transaction.
On closing, we expect to receive proceeds of approximately $730 million for our 60% interest in RiverStone Barbados, and a contingent value note for potential future proceeds of up to $236 million should certain returns be met. Part of the agreement, the company entered into an agreement with RiverStone Barbados to purchase, unless sold earlier, certain investments in the equity investments owned by RiverStone Barbados at a fixed price of approximately $1.2 billion prior to December of 2022. We have two years to buy this. Closing of this transaction is subject to various regulatory approvals. We would like to thank Luke Tanzer and all the employees at RiverStone Barbados and wish them the very best in the future. Subsequent to 2020, Fairfax entered into an agreement with OMERS, pursuant to which OMERS will acquire a 14% interest in Brit Limited.
Cash purchase price for this investment is approximately $375 million. The transaction is subject to customary closing conditions. It's expected to close in the second quarter of 2021. We have said for some time that we wanted to monetize many of our investments, including particularly many of our private investments. Here's what we've done in 2020. We merged Dexterra with Horizon North for a 49% ownership in the public company. We now have a company which we expect will have $1 billion in revenue and $100 million in EBITDA in a few years. We sold Baycrest for $59 million with an additional earn-out over time, which should result in 100% return on our capital investment. Peak Performance agreed to sell its Easton baseball operation to Rawlings for shares and cash at a significant profit for us and our partner, Power Corp.
I just mentioned, we completed the merger of Fairfax Africa with Helios Holdings for a 32% ownership in the combined entity. This is just the beginning. Various initiatives are underway, including taking some of our other private investments public. Farmers Edge recently announced that it was going public in the first quarter of 2021. We continue to have approximately CAD 1.3 billion of the holding company, predominantly in cash and short-term securities. Please note that our cash in the holding company is to meet any and every contingency that Fairfax may face in this uncertain time period. We're not making any long-term investments with this cash other than to support our insurance and reinsurance operations.
The closing of the RiverStone Barbados transaction, which is expected to be in this quarter, we expect to have $1 billion of cash and investments at the holding company with our credit facility fully paid off. In December 2020, the company's insurance and reinsurance companies held approximately $16 billion in cash and short-term securities, representing approximately 38% of our portfolio investments, comprising of $13 billion of subsidiary cash and short-term investments, and $2.9 billion of short-dated U.S. Treasuries. Our investment portfolios will be largely unimpacted by rising interest rates as we have not reached for yield. In fact, we would benefit from rising investment income.
We have recently begun investing, as you know, with Kennedy Wilson in first mortgages with a term less than five years. With a run rate at the end of 2020 of approximately $19 billion in gross premiums, and our insurance subsidiary is expected to grow significantly in the next few years. A huge focus on underwriting discipline, a portfolio of over $40 billion, and HWIC operating in a stock picker's market, all grounded on our fair and friendly culture built over 35 years. We expect to be firing on all cylinders in 2021 and beyond. The past 35 years, we've had years when our book value has grown by 40%-50%, and our stock price has increased by 150%. We expect to reward you, our shareholders, for your patience. We feel the best is yet to come.
I will now pass the call over to Jen Allen, our Chief Financial Officer. Jen?
Thank you, Prem. We wanted to let you know that in addition to the press release that was issued yesterday on our year-end results, Fairfax's 2020 annual report will be posted on the company's website on March 5th, 2021. I wanted to also take a moment and thank all of our employees globally. We've been faced with many challenges throughout 2020, but each finance team showed their resilience and commitment to Fairfax. A huge thank you for all your efforts. You should all be very proud of your accomplishments. Now, looking to our results. In the fourth quarter of 2020, the effects from the COVID-19 pandemic on the global financial markets started to reverse with significant improvements noted in the equity markets, which benefited Fairfax's fourth quarter results. Our core underwriting performance continued to be very strong despite higher catastrophe losses in 2020 and the reported COVID-19 losses.
I'll start with a few key highlights from our 2020 results. We reported strong underwriting performance with an underwriting profit of $309 million. That represented a combined ratio of 97.8%, which was achieved despite COVID-19 losses and higher catastrophe losses. Our net gains on investments were $313 million for 2020, with over $1.2 billion in net gains on investments being recorded in the fourth quarter. Finally, we ended the year with a consolidated balance sheet position for our investments in associates with fair values exceeding the carrying values by $712 million. That represented on a pre-tax and non-controlling interest basis, appreciation of approximately $1.1 billion since March 31, 2020, which is not reflected in our book value per share as these investments are equity accounted.
Taking the above key highlights into account, Fairfax reported net earnings of $218 million or $6.29 per share on a fully diluted basis in 2020, compared to 2019, when we reported net earnings of $2 billion or $69.79 per share on a fully diluted basis. Looking in more detail to the results of our underlying reporting segments, starting with our ongoing insurance and reinsurance operations. As noted, our core underwriting performance continued to be very strong, with underwriting profit at our insurance and reinsurance operations in 2020 of $309 million and a combined ratio below 100% at 97.8%, which compared to an underwriting profit of $395 million and a combined ratio of 96.9% in 2019. Underwriting performance in 2020 remained strong despite COVID-19 losses of $669 million and catastrophe losses of $644 million, which were higher than 2019 by $147 million.
Despite those COVID-19 losses and additional catastrophe losses, in aggregate that were $815 million, Fairfax still achieved an underwriting profit of $309 million and a combined ratio of 97.8%, or 93.0% adjusted for those COVID-19 losses. All of our insurance and reinsurance companies achieved combined ratios below 100% in 2020, with the exception of Brit, primarily as a result of the impact of COVID-19 losses. Overview of our core underwriting results for 2020 are as follows. Northbridge reported a combined ratio of 92.4% and underwriting profits of $109 million, which was an underwriting improvement of $62 million from 2019. Odyssey Group reported an underwriting profit of $190 million with a combined ratio of 94.7% and underwriting improvement over 2019 of $100 million. Crum & Forster reported an underwriting profit of $60 million and a combined ratio of 97.5%, which was relatively consistent with their 2019 results.
Zenith National reported lower underwriting profits of $52 million and a combined ratio of 91.9%, which reflected price decreases and lower payroll exposure due to the economic impacts of COVID-19 in their workers' compensation business. This was partially offset by price increases and growth in other property and casualty lines. Brit reported underwriting losses of $240 million and a combined ratio of 114%, which principally reflected COVID-19 losses of $270 million or 15.8 combined ratio points and higher catastrophe losses. Allied World reported an underwriting profit of $126 million, combined ratio of 95.4%, an underwriting improvement over 2019 of $68 million. Fairfax Asia reported an underwriting profit of $7 million and a combined ratio of 96.8%, which is relatively consistent with their 2019 results.
Our insurance and reinsurance Other Segment produced an underwriting profit of $6 million and a combined ratio of 99.5 in 2020, which compared to an underwriting loss of $18 million and a combined ratio of 101.7. Key components of our combined ratio in 2020 of 97.8 included the following: COVID-19 losses of $669 million, or 4.8 combined ratio points. Increase in frequency of current period cat loss events that resulted in higher losses at $644 million or 4.7 combined ratio points primarily related to Hurricane Laura, Sally, and the Midwest derecho. Benefit of strong reserving reflected continued net favorable prior year reserve development of $455 million, or 3.3 combined ratio points, and improved underwriting expense ratios, reflecting the growth in our net premiums earned relative to increases in the underlying expenses.
Additional details on the catastrophe COVID-19 losses, net favorable prior year reserve development, and our combined ratios that impact each of the respective insurance and reinsurance segments will be disclosed in Fairfax's 2020 annual report in the MD&A. As noted, in 2020, we reported COVID-19 losses of $669 million, which were comprised primarily of business interruption exposure, approximately 35%, primarily from our international businesses, and event cancellation coverage of approximately 34%. The COVID-19 losses principally comprised of incurred but not reported that represented 51% of the net loss. The net losses were prior ordered $270, Odyssey Group $140 million, and Allied World at $113 million. In 2020, $644 million or 4.2 points were primarily reported by the following segments. Northbridge reported CAD 39 million or two combined ratio points, primarily relating to Fort McMurray floods and the Calgary hailstorm.
Odyssey Group, $190 million or 5.3 combined points, primarily related to Hurricane Laura and the Midwest derecho. Allied World, $165 million or 6.1 combined ratio points related to Hurricane Laura, the U.S. Western wildfires, and Midwest derecho. Crum & Forster, $95 million or 3.9 combined ratio points primarily related to Hurricanes Laura and Sally. Finally, Brit, $157 million, or 9.2 combined ratio points, primarily related to Hurricanes Laura and Sally. Our combined ratios benefited from net favorable prior year reserve development of $455 million, which translated into 3.3 combined ratio points compared to net favorable prior year reserve development of $480 million, which represented 3.8 combined ratio points in 2019. Looking at the growth in our net premiums written by the insurance and reinsurance operations in the fourth quarter and full year 2020.
In our fourth quarter 2020, the net premiums written increased by 16.1% to $3.7 billion from $3.2 billion in the fourth quarter of 2019. For the full year 2020, it increased by 11% to $14.7 billion from $13.3 billion in 2019. That full-year increase in 2020 of approximately $1.5 billion is almost equivalent to all of Northbridge's net premiums written in 2020. A few comments on our Run-off operations. As noted in prior quarters, subsequent to the contribution of European run-off to RiverStone Barbados on March 31st, 2020, starting from April 1, 2020, the operating results of Run-off only include our U.S. operations.
Excluding the significant reinsurance transactions and Part VII transfer at European run-off in 2020 and 2019, Run-off reported an operating loss of $204 million in 2020 compared to an operating loss of $219 million in 2019, with Run-off reporting an operating loss of $147 million in the fourth quarter of 2020, principally reflecting net adverse prior year development on asbestos reserves of $126 million. Turning to the results of our non-insurance companies reporting segments. In 2020, the restaurant and retail reporting segment reported an operating loss of $70 million. In the fourth quarter of 2020, the company benefited from favorable results from this segment that reported operating income of $12 million. This segment's revenues benefited from expanded e-commerce platforms and strong brand awareness that helped partially offset the decline in the in-store revenues throughout 2020 as a result of the impact of COVID-19 lockdown restrictions.
The operating losses in the other non-insurance reporting segment of $54 million in 2020 principally reflected Fairfax Africa's operating losses of $110 million pre-deconsolidation on December 8, 2020, partially offset by operating income at Dexterra and AGT. On December 8, 2020, Fairfax Africa completed the transaction with Helios Holdings Limited and was renamed Helios Fairfax Partners or HFP. Fairfax deconsolidated Fairfax Africa and commenced accounting for its interest in HFP as an investment in associates, resulting in a net loss of $62 million that included recycled foreign currency translation losses of $27 million. Those foreign currency translation losses have no impact on common shareholders' equity. It's a reclassification in the financial statements.
That included the $62 million, a partial reversal of the initial impairment loss of $164 million that was recorded in the third quarter of 2020, related to an increase in the market-traded share price of Fairfax Africa between then and closing. Looking at our results, our investment results for Fairfax, our consolidated interest in dividend income decreased year-over-year from $880 million in 2019 to $769 million in 2020. That primarily reflected lower interest income earned principally on the U.S. Treasury bonds and cash short-term positions that was partially offset by higher interest income earned on our high-quality U.S. corporate bonds. Our consolidated share of loss of associates of $113 principally reflected impairment losses of $240 million that were recorded primarily in the first quarter of 2020 and were related to the company's investments in Quess, Resolute, Atlas Mara, and Astarta.
It also included our share of losses at Sanmar of $49 million and Bangalore Airport of $31 million, which was partially offset by profits at Atlas Corp. of $116 million and RiverStone Barbados of $113 million. At December 31, 2020, our investments in associate had an aggregate fair value that exceeded the carrying values by $712 million. Due to the equity method of accounting for these investments, this excess of fair value over the carrying value is not included in our book value per share. This is a significant positive change from the March 31, 2020, when the aggregate carrying value exceeded the fair values of the investments in associates by approximately $400 million. That represents on a pre-tax and non-controlling interest basis appreciation of approximately $1.1 billion in these investments. In terms of our net gains on investments, I'll highlight the fourth quarter and 2020 results.
In the fourth quarter, our consolidated net gain on investments was over $1.2 billion compared to net gains on investments of $640 million in the fourth quarter of 2019. The fourth quarter of 2020 principally reflected net gains on our long equity exposures just under $1.2 billion and net gains on our bonds of $112 million. That was partially offset by $138 million on our short equity exposures, which resulted out from the closing of the company's remaining short equity total return swap. Let me remind you that in the first quarter of 2020, we reported net losses on investments of just over $1.5 billion. For fiscal year 2020, Fairfax's consolidated net gains on investments was $313 million, a $1.8 billion swing within a year.
Our consolidated net gains on investments was $313 million, reflecting our net gains on bonds of $562 million, primarily as a result of unrealized appreciation of high-quality corporate bonds. Our net gains on long equity exposures was $372 million, which was partially offset by our short equity exposure of $529 million that was fully closed out of the company's remaining short equity total return swap position. In closing, a few comments on our financial position. Our total debt to total cap ratio, excluding the company's consolidated non-insurance companies, increased to 29.7% at December 31st, 2020 from 24.5% at December 31st, 2019, primarily reflecting increased total debt and decreased common shareholders' equity, principally related to the common share dividend paid in Q1 and unrealized foreign currency translation losses, which was partially offset by net earnings.
At December 31st, 2020, our book value per share was $478 compared to $486 at December 31st, 2019, and an increase from the third quarter of 2020 of 8.2%. The increase in book value per share of 8.2% in the fourth quarter of 2020 reflected Fairfax's core underwriting performance continuing to be very strong with excellent investment returns. Now, Prem, I'll pass it back over to you.
Your name and your company name and try to limit your questions to only one so that it's fair to everyone on the call. Okay, Dale, we're ready for your questions.
Thank you so much. We will now begin the question-and-answer session. If you'd like to ask a question you may press star followed by the number one, please state your name and company name, it is required to introduce your question, and if you want to cancel request, you may press star two. One moment please as we wait for the question to queue up. Our first question comes from Jeff Fenwick from Cormark Securities . Your line is now open. You may proceed.
Hi, good morning, Prem.
Hey, good morning, Jeff.
As you say, an interesting time in the markets and good opportunities for stock pickers. My first question really is just around your general thoughts on investment rotation and are you being very active here and maybe selectively trimming some positions and looking for some new opportunities? I guess the one I certainly get a lot of questions on of late, not surprisingly, is BlackBerry. Any comments on, I guess, the allocation and perhaps BlackBerry specifically?
Jeff, just on BlackBerry, it's gone up and come down. Just a couple of points. First of all, we don't comment on our securities purchases or sales, you know that. I would just say two points. One, they're insiders and have insider obligations on BlackBerry. Two, BlackBerry closed on December 2020, closed the year December 20, six and five eights . Having said that, in 2019, the technology stocks were doing very well and have been doing very well for some time, as you know, Jeff, and the shift to value investing had begun. Then COVID-19 came at us in 2020 in March, and it was significant. 180 countries closed down their economies. We didn't know what was going to happen. Stocks, particularly value-oriented stocks, companies sensitive to the economy crashed.
Since that time, they've come back and now we've got vaccines coming in. We've got testing. We just think the shift to value investing will take place over time, and that's already begun in November with the Pfizer, with the announcement of the Pfizer vaccine. Many vaccines have come to play. Countries are getting back to normalization. You don't know exactly when, but that will happen. The economies will come back. We, of course, are stock pickers. We expect to make money on the things that we've invested in in the past, and we are constantly looking at better opportunities. This is what we've done for 35 years. We've got a tremendous track record. We've got a very good investment team led by Wade Burton and Lawrence Chin. Very excited, Jeff, about what will happen in the next few years.
Okay. Maybe my next question, I'd like to just focus on capital and uses of capital. Obviously, you highlighted how the balance sheet has strengthened after your RiverStone sale. As we look into this year with the insurance markets remaining hard, are you thinking about the first priority, I guess, is pushing more capital down into the operating units? Are we looking at a similar magnitude of investment down there? I think it was $1.4 billion. Maybe you might look more at doing something like share buybacks here if the stock's still trading below book value.
Yeah. The first thing to say is that insurance is our business, core business. As you said, we put a ton of money in 2020 into the insurance companies. We don't think they need any more money now because our investment portfolio is coming back up as additional plus. We've made them self-financing at the end of the year. We expect them to grow significantly. They grow over time, right? When you write premiums, you earn it over more than a year as the year comes forward. The insurance business is well primed. It reminds me of 2001, and what happened in 2002 after 9/11. Some differences, of course, at all times, but as we said, prices are going up. They're going up all over the world, and the terms are going up. We have capital.
We purposely did the 14% on Brit so that we have another $375 million in case we need it. At the moment, we don't expect to need any money from the holding company for our insurance companies. They're well capitalized and financed and ready. Most importantly, many companies are pulling back, Jeff, where our management team who run the companies are ready to expand and are expanding significantly, as you saw in Allied and Northbridge and Odyssey already.
I guess maybe a comment on share buybacks then, if you have some capital available for that.
Share buybacks is always first financial soundness. First, a good opportunity to support our insurance companies. Second is share buybacks, and that's what we always look at. We had this opportunity, as we mentioned, on the total return swap. It's an investment that we made. I've said before many a time that our stock prices are incredibly cheap for the record that we've had. We go through phases, though. We're not looking at every three months, every quarter, we're up 10% or 5%. That's not how we run our company, but our long-term record is perhaps one of the better ones you'll see. We think our stock is cheap. When we looked at the potential investments that were available to Fairfax in our investment portfolios, we thought Fairfax was perhaps among the best, if not the best.
We bought 1.4 million shares, as we said, in a total return swap. As an investment. We bought that as an investment. We look at all possibilities, Jeff, and see what the future will bring.
Okay. Thank you for that color. Over to you.
Thank you, Jeff. Next question, Dale.
The next question comes from the line of Junior Roth, private investor. Your line is now open, sir. You may proceed.
Good morning, Prem.
Hey, good morning.
Congratulations on a wonderful quarter. I have two questions. For the total return swaps, when is the expiry date for that? During the Reddit fiesta, did you guys take advantage by hedging any of your investments?
Sorry, when you say the credit swaps, you mean these total returns?
The Fairfax credits. Yeah, total ones. Yeah, sorry.
Yeah. Total return swaps. Yeah. They're one-year swaps, and we've historically been able to extend it for as long as we like.
Okay, thanks. On the Reddit question, were you guys able to lock in any of the gains by taking any kind of hedging, or was there no opportunity because it was just a short period of time?
As I said, right, I made the point that on BlackBerry, we are insiders and we have insider obligations, and we never talk about potential sales of our securities.
Thanks.
Thank you very much. Next question, Dale.
Our next question comes from the line of Tom MacKinnon from BMO Capital. Your line is now open. You may proceed.
Yeah. Thanks very much. Morning, Prem.
Morning.
My question is about the selling off 14% of Brit to OMERS. I think your reasoning was we got $375 million as a result of that, and that's just in case we need it. I remember earlier in 2020, you went to the debt market sort of in case you need it. Why are you selling off a 14% of Brit, like in the height of some good hard markets here? Why wouldn't you use debt instead?
Yeah. It is a very good question, Tom. We just want to be financially sound and we have got a very good relationship with Brit, with OMERS. You know that we had 40% on RiverStone UK that we sold to OMERS for $600 million. So they are taking $225 million, but they are reinvesting $375 million in Brit. We just think we have got a very good relationship. We bought back, Tom, I think we had about 89%. OMERS helped us in the past, and we had 89% before we did the full 14%. We bought all of it, I think, back in 2020. So we sold this 14% back. It is to keep $375 million possible potential. We are going to refinance some term, which we have always done, on debt issues that are coming in the next three years. We think it is just a good mix.
If anybody said you're selling off part of an insurance company in what would appear to be pretty good insurance markets in order to improve liquidity versus going to the debt market, how would you answer that question?
I'd answer that by saying that we've done this before, and we have the ability to buy back that 14% from OMERS. We've got many targets that we can buy it in a year, in two years, in three years. It gives us a lot of flexibility, Tom. The debt markets are there. We understand that.
Yeah. Okay. Thanks for that.
Thank you very much, Tom. Next question, Dale.
The next question comes from the line of Mark Dwelle from RBC Capital Markets.
Yeah, good morning. A couple of questions.
Good morning, Mark.
Good morning. On the sale of the Barbados business, you had mentioned briefly, and it was mentioned in the press release, about a plan to buy back or part of the agreement requires the buyback of $1.2 billion of investment assets. Could you just elaborate on that a little bit? Why is that being left out there? It seems like $1.2 billion is not an insignificant amount that presumably the holding company will need to come up with within the next couple of years in order to fund that purchase.
Tom, basically we had a stock portfolio under RiverStone in U.K., and we could have sold it in December or whenever in 2020. Our feeling was that it was very undervalued. We have the ability, $1.2 billion is based on 2019 prices, year-end prices. For 2022, we've got the ability to sell it or buy it back. We think it'll be, right now the $1.2 billion is very much what it's worth in the stock markets, meaning the stocks in that portfolio are very much worth $1.2 billion. We expect it to do very well, so we can sell it if we want, or we can hold it. We just think value investing is coming to the fore. The companies that we own are exceptionally undervalued in our minds, so take that with a pinch of salt.
We think they're exceptionally undervalued, and we think they're going to do very well. We didn't want to sell it at these prices. That's basically it.
These are common equities, or these are private equity holdings?
No, these are predominantly common stock positions that we have.
Okay, thanks.
We can sell them if we like.
Okay. My second question relates to executing the total return swap with respect to Fairfax shares. I guess I was just curious why you would pursue that structure rather than just buying back the stock if you felt like that was the good opportunity? Is this a capital constraint that you couldn't really buy back that much?
We'd have to be careful, right? Not so much. We had to be very careful in terms of how much we could buy back. When we looked at Fairfax as a stock price and looked at everything else that we could buy, we just went total return swap on Fairfax. Right now, we paid $344 per share, as you know, U.S. dollars. Our book value is $478. If you want the matches on a book value basis, we'd have about a $200 million gain if Fairfax stock price is going book value. It's worth another $200 million. We just think it's a terrific investment, and a total return swap structure was a very good way for us to do it, and so we did it.
I don't disagree with you that it was a good strike price. I guess it was really the form of the transaction rather than just actually buying the shares. Using a derivative instead, it's a little bit unusual. I haven't usually seen that with most of the companies that I've followed. That was really my main question.
Mark, our point is just that we wanted to keep up. We have more than $1 billion in cash in the holding company. Once all merger is done, we'll have $375 million. We just wanted to be financially sound in all ways as opposed to use that cash at this point in time.
Okay. Thanks for the answers. Good luck for 2021.
Terrific. Thank you, Mark. Next question, please. Dale?
Thank you. The next question comes from Jaeme Gloyn from National Bank Financial. Your line is now open. You may proceed.
Hey, Jaeme.
Oh, I'm so sorry. Jaeme's disappeared. Would you like to entertain other questions? Jaeme, please press star one again.
Dale, you want to go on to the next question, please?
Oh, sure. The next question comes from Mikhail Prokop from Prokop Holdings.
Hello, Prem.
Hi, Mikhail. Can't hear you, Mikhail.
Mikhail's line got disconnected, or his line is disappeared. Would you like to entertain Jaeme Gloyn?
Yeah. Dale, if you can, let them go on to the next question, please.
Sure. Jaeme Gloyn, your line is now open. You may proceed.
Yeah, good morning. Am I coming through?
Hey, good morning, Jaeme. Yeah. Can hear you well.
All right. Okay. First question is just around the Farmers Edge IPO. That'll be coming out pretty soon here. Can you maybe talk about some of the other industries or companies that you're looking to maybe tap into this pretty robust IPO market as a way to realize on value in some of those holdings?
Jaeme, we're not allowed to say too much till they file and till they're done. Farmers Edge, as you know, has filed. We'll be filing some more. You'll be able to guess them, and we'll be filing them in India, in Fairfax India, many of them there. We've got some really good companies, and we've developed them over time. Dexterra is a classic where the old Horizon North is called Dexterra. We have 49%, and we expect that to be a very successful company over time. We have many of them. When you look at our non-insurance companies, some of you analysts are worried about the fact that we don't make any money. We reflect the losses, but we don't show the gains. The gains come over time. When you look at our investment portfolio, you know this, Jaeme, you've got common shares.
If you have more than 20%, they become associates. If you have a 40% interest or numbers like that, in the case of Thomas Cook, 65%, then you have to consolidate it. Now any report in 2020, for the 2020 annual report that will come out in a few weeks, we're going to show it to you. We're going to take another attempt to show you our common stock positions. Some of them are just common stocks, some are associates, some are consolidated. It gets a little confusing, that's the accounting IFRS. We have to follow the accounting rules, we're going to show that to you in a way that I think will be easier to understand. Over time, all of these investments, some do very well in a short period of time and some take longer.
We're patient, long-term investors.
Okay, great. Thanks. Then just following up, looking into the insurance sector as we think about COVID-19 risks and losses and reserving there, I would expect that loss reserves would diminish as the vaccine rollout unfolds. But can you talk about maybe some of the exposures in event cancellation, in business interruption?
Yeah, event cancellation, Jaeme, we've taken the next six months. These event cancellation policies, very few, if any, have been written after March 2020. We've looked at, Brit has looked forward, and Allied were the two, and we've basically written off the first six months where we think they'll be written on. We don't expect that it to be of any significance, but as I said in my comments that there is that uncertainty, but we don't expect it to be very significant.
Okay, on BI as well, do you have a quick comment to sort of frame that risk like you just did with events cancellation?
Which risk again, Jaeme, sorry?
Business interruption.
Business interruption. Yeah, business interruption is an international risk that you have. It's outside North America. We've taken most of the hit. You'll see that 50%- 60% of the gross numbers that we've set up are IBNR, right? That's reserves that are not allocated, that are incurred but not reported, that we expect it to come. We've been conservative as usual. All through our history, we've been conservative. We expect that even in the case of business interruption. Now there are some lawsuits and there's regulatory bodies making decisions, so you have to watch how they come through. We think all in all right now we're well booked ourselves.
Okay, that's great. Thank you.
Thank you, Jaeme. Yes, Dale, next question please.
The next question comes from the line of Mikhail Prokop, Private Investor. Your line is now open. One moment.
Long time. I've followed you guys for a long time. I believe that it is time that you step down from having primary investment responsibilities. I know that Jaeme manages some capital, Wade manages some capital. We all know that those are very small portions of the capital base. I think you are always quoting your long-term track record. I know when a man is out of tune with the markets. I also think that it was a huge mistake if you did not take the BlackBerry gift that was given to you by the market. I also don't think that you're doing deep analysis on your holdings. I suspect that you probably don't do a lot of diving into the financials, the statements. You probably don't understand the microeconomics of the businesses you're buying.
You probably are not talking to customers, suppliers, competitors, former employees. The investment business is a very competitive business. It's not like it used to be. I'm not saying that you should go out and buy technology stocks, but I sense from the man is not competitive in the field and is not working hard. I think it's time that you step down from primary investing, and I'm sure many of your associates agree with you, but because they're Canadian and tend to be nicer than Americans, they just don't say anything. The banks don't ask you any difficult questions because there's so few good companies in Canada, and they get financing fees from you, so they ask cowardly questions. Thank you.
Oh, good points. You're entitled to your opinion. We'll let time decide that, okay? Thank you very much for your comment. Next question, Dale.
The next question comes from the line of Gursimran Singh, Private Investor. Your line is now open.
Hi, Prem. Thanks for taking my question. My question is regarding Fairfax India. Could you please provide an update on your investment in Bangalore Airport? Are you still bullish about the prospects of that investment given the situation with COVID and how it's going to evolve in the next two, three years? Also, could you provide an update regarding the deal you had with OMERS to sell a stake at $ 2.7 billion valuation? Has it closed or could you provide an update there? Also, could you tell us whether we are still looking to do the IPO as it was written in the last annual report by the end of this year?
Yeah. Bangalore International Airport is a world-class airport. Doing very well. It was stopped, of course, during COVID. The business is coming back significantly. Passengers, I think it's running at about 60% of capacity. The terminal is delayed, but in 2022, the second terminal will be built. The second runway is already built. We're as excited about Bangalore International Airport as we always were. We've got a terrific guy running it, as you know, Hari Marar. This company will be on its way. In terms of Fairfax India itself, there's a tremendous opportunity. India is a land of opportunity. It's become very business-friendly, and Mr. Modi's come out with a very good budget. We expect that our Anchorage over time will take it public. We think, $2.7 billion-$ 2.8 billion for Bangalore International Airport, 100% basis now, is a very reasonable price.
That's very possible. In terms of the Anchorage approval, India, there's a lot of approvals necessary. There's one more approval that is necessary and we think it'll come soon. As I said, Gursimran in terms of Fairfax India, it has got lots of possibilities. With that, Dale, let me take the last question, if you don't mind.
Thank you.
Sure. The next question comes from the line of Alan Parsow from Elkhorn Partners .
Thank you very much for taking the call. I just need a little bit of clarification, if I can, on the questions regarding BlackBerry. I understand that you don't discuss changes in portfolio, et cetera, regarding any of your positions. There were filings made, and this goes with regard to your insider comments and directorship. There were some filings made in January where six of the Hamblin Watsa Fairfax team sold their entire positions in BlackBerry. I understand that's a subsequent event to the end of the quarter. Can you explain how they're able to sell their shares and Fairfax may not be able to sell theirs? In the past, you have two different positions in BlackBerry, one convertible bonds and common stock. Are you saying you have restrictions on both of those, for clarification for me, please?
The securities, SEC doesn't distinguish between convertibles and common shares. In the case here, we're an insider, I'm an insider, and Fairfax is an insider. Some of the people may not be insiders, and I don't know who you're referring to, Adam, but some of them may not be insiders, and so they can do what they want.
Well, as an example, Wade Burton, Roger Lace. There were significant investor people.
Yeah. No, that's right. The company is an insider. We follow all these rules very carefully, and no one can sell anything unless they go through our legal department. We're very careful, Adam, in this type of situation. We don't talk about individual securities till they're done. That is how we run our affairs for 35 years. You'll have to bear with us, Adam. I thank you for your question. I thank all of you. Dale, I think we're ready to go on to end the call. As we've announced previously, for your safety and for the safety of all our employees from the global pandemic, our annual meeting will once again be held virtually on April 15th, at which time I look forward to answering again all your questions.
Instructions on how to join that webcast will be published on our website soon. Dale, thank you very much. This will terminate the call. Thank you.
That concludes today's conference. Thank you all for participating. You may now disconnect.