Good morning, ladies and gentlemen. Warm welcome to you all. Really nice to have all of you. This is our 40th annual meeting, 39 years since we began in 1985. Thirty days. I am Prem Watsa, Chairman of Fairfax, and it's really great to see all of you here from many parts of the world. Welcome to all our shareholders and employees across the world, and all of you who support us and people on the Internet. Normally, I would begin with a joke to start off our AGM with a smile, but last year, with great sadness, we reported three of our key leaders passed away: Rick Salsberg, Mr. Athappan, and Vinod Loganathan. In May 2024, with great sadness, we reported that two of our key leaders passed away.
First was Rick Salsberg, who was our Counselor for 40 years, and Rick and I wrote the guiding principles for the first 15 years we worked together on every acquisition. Together, you must remember, we began with $10 million in premium in 1985. Fifteen years later, we had $3.7 billion in premium, and we were well on our way. And Rick always represented the heart and soul of the company. He loved Fairfax, and we could not have achieved the success we had without him. Ricky was our partner, trusted friend, indispensable advisor for 40 years. We were so lucky. 40 years he was with us. So our deepest condolences to Lynn and the Salsberg family. Second was Mr. Athappan, Chairman and CEO of Fairfax Asia. For the last 22 years, he was Chairman and CEO. He passed away on May 22nd, also in May 2024.
He built Fairfax Asia from scratch with acquisitions in Hong Kong, Malaysia, Sri Lanka, Indonesia, and Singapore. He built a company called First Capital with the $35 million we gave him in 2002. And in spite of what I said and asked him not to, he decided to sell the company in 2017 for $1.7 billion and no additional capital from us. $35 million in 2002, nothing more. He was the best underwriter I have ever met, perhaps the best in the world. He was a trusted and valued colleague, but most importantly, he was a very good friend of mine and many others here at Fairfax. We extend our deepest condolences to his sons, Gobi, and Nandu, and their families. Now, I said in our annual report, everything seems to come in threes.
On February 27, 2025, a little more than a month ago, Vinod Loganathan, my brother-in-law and Vice President, Administrative Services, passed away after suffering a cardiac arrest almost two years ago. Vinod was my chief of staff. He was with me in everything I did for the past 15 years. Our AGM, this AGM, was transformed by Vinod, and our leaders' meetings, anniversary celebrations, were all outstanding because of Vinod's intricate planning. As he traveled with me, he got to know all our companies across the world and was loved by all. Vinod was a gentle soul and reflected our culture extremely well. We were blessed to have Vinod as part of our Fairfax family, and I personally was very blessed to have him in my own family. He could be missed, but never forgotten. Our deepest condolences to his wife, Breda, and their children, Ryan and Cara.
Vinod had a cardiac arrest because he did not know that one of his arteries was 99% blocked, 99% blocked, and needed a stent. So because of Vinod, we all became aware of that, and we have initiated a simple testing of the heart across all our companies in the world for any employee 50 years or older and their spouse. Already, we have saved 10 employees in North America who needed a stent and didn't know about it. Vinod's legacy continues. That's 10 people in North America. It'll spread right across. Vinod's legacy continues forever at Fairfax. If you're above 50, all of you here, if you're above 50, I would really recommend taking this test. It's available in Canada. It's available in the United States, very easily available in the U.S., and if you have any questions, you can send it over to Pat, and she'll help you.
To remember Rick, who was the heart and soul of Fairfax, we have instituted the Rick Salsberg Prize that will be awarded each year to the one person who most represents our culture. Also, in honor of Rick, our charitable foundation made a gift that resulted in the creation of an annual Rick Salsberg Memorial Lecture Series at the University of Toronto Faculty of Law, and that'll be awarded at the end of 2025. One student from the University of Toronto Law School, which is the best one in Canada, and where Rick went. To remember Mr. Athappan, who is one of the world's best underwriters, we have instituted a cup that will be awarded to one company each year for underwriting excellence. We have established the Mr. Athappan Underwriting Academy in Singapore to train our underwriters across Fairfax in the methods, quite unique methods, utilized by Mr. Athappan.
All of these three gentlemen were instrumental in the success of Fairfax. We miss them. We'll never forget them and in their honor, I would ask that you join me in one moment of silence. Thank you. Thank you, ladies and gentlemen. I know Rick, Mr. Athappan, and Vinod are all watching from above. Thinking of Rick, Mr. Athappan, and Vinod watching from above reminds me of the story of an employee having a conversation with his boss. Boss, the boss says, "Do you believe in life after death?" The employee says, "No, because there's no proof of it. I don't believe in it." "Well, there is now," the boss said.
After you left yesterday saying that you had to go to your grandma's funeral, she called the office looking for you." Our Board Director, David Johnston, says recently that he said Prem begins his AGM with his corny jokes, but it relaxes everyone. So anyway, thank you very much for coming. Now, we've got two winners of the one winner of the Rick Salsberg award, and then, of course, the Mr. Athappan Cup. I'm very pleased to announce the inaugural winner of the Rick Salsberg Prize is Bijan Khosrowshahi. Bijan joined us and a little on Bijan. Bijan joined us in 2009 after 19 years with AIG. Rick and I met him in Toronto. We liked him a lot, but we had a small problem. We didn't have a job for him.
He joined us anyway, and today he oversees many of our international operations, including Gulf Insurance, Colonnade Insurance, and Fairfax LATAM with outstanding results. Give him a nice round of applause. We've got a. This is a plaque, and there's a smaller one for Bijan. But this will be. So we've got Bijan's name there, 2024, and every year this will be presented, and it'll be kept in our boardroom. So congratulations again, Bijan.
Thank you. Thank you. Thank you.
In spite of record catastrophes in Canada, Northbridge posted a stellar 89.3% combined ratio, writing $3.5 billion of premium while providing excellent service to its customers, and you'll remember we started with $10 million in Canada. This is our king company. Over the last five years, Northbridge has averaged 90.1% combined ratio with reserve redundancies every year. An outstanding performance, and I'm very happy to announce that Silvy Wright and Northbridge are the first-ever winners of the Mr. Athappan Cup. We've got 2024 Northbridge, and every year we're going to award this Mr. Athappan Cup, so we'll never forget Mr. Athappa n. Thank you.
Thank you very much, Prem. Thank you.
This year, an impressive 39 initiatives from 13 Fairfax companies across the world were submitted with a diverse range of innovative products. It's fantastic to see Fairfax companies have contributed to the Fairfax Innovation Award. And after reviewing all the submissions, Colonnade has been selected as the 2024 winner. Colonnade, they're right here. Give them a nice round of applause. In our decentralized environment, you know there's competition for innovation. It's not one centralized approach. It's all of the companies looking at it, and that's so nice to see. It is now more than three years since Russia invaded Ukraine, February 2022. As I mentioned last year, our presidents are keeping our people safe, and there are heroes working with extraordinarily difficult conditions, and our business is doing exceptionally well.
I particularly wanted to recognize General Dallaire, who's here with us, Canadian General Dallaire, and his wife, and Andrey, Oleksiy, and Slava from Ukraine companies. So can we just put the slide on there? There you are. And General Dallaire. In spite of really tough conditions, the performance has been pretty outstanding. In the last five years, particularly, this has happened for a long time, our fair and friendly culture has shone brightly. We treat our employees as one big family, and we do not want to have layoffs like you have seen recently in the tech industry or other industries, particularly when you're in strong financial shape and making a lot of money. So we are careful in adding employees because we don't like layoffs.
While Fairfax and all our companies have been a great place to work, where we do not tolerate or condone any form of racism or discrimination, we still know that it has not been eradicated, and we have the BlackNorth Initiative. We have a Black Initiatives Action Committee at Fairfax under the chairmanship of Craig Pinnock, the CFO of Northbridge, to make our company even more attractive for people from the Black community and other minorities. Since the inception of Fairfax, we've always been focused on a few things, as you all know. 40 years. This is our 40th year. The way we operate, the way we treat each other, and the way we help our communities. Our management team and Board ensure that honesty and integrity are never compromised and that full disclosure is provided to all our shareholders, stakeholders.
We follow the Golden Rule: treat people like you want to be treated yourself. It's a fascinating rule, the Golden Rule, as all of you know, and what's amazing is, as I'll show you, it applies in every faith, every faith, the Golden Rule. We now have over 21,000 employees around the world working in our decentralized environment following the basic principles that I mentioned. We have an ESG environmental, social, and governance report. It's on our website, and I think this is the fourth report, but we've been doing that for 39 years. We believe in good corporate governance. I've always said, and to repeat, we are very blessed to have such a wonderful group of long-term shareholders who've stood by us through the ups and downs of business life.
And there have been ups, and there have been downs, as all of you know, and over a long period of time. But the most important thing we've developed over that time period is that culture, a culture which is a very significant moat and very tough to duplicate. And our preservation of that culture is the biggest achievement for the past 39 years. It's tough to copy, and it's, you know, year after year, we have focused on it, and it's now ingrained in our companies. Fair and friendly culture, we say in our name, is why our companies all over the world, all over the world, there are many, many people who want to join our company, and people want to sell their company to us. And it's our biggest advantage, and we got it fiercely.
I want to take the opportunity to thank our directors, all 12 of them, very special directors, and for their strong support of the company, our directors. Of course, when you're 40 years, this is our 40th year, we have retirement. So Brandon Sweitzer, who served on our board for more than 20 years, decided not to seek reelection this year. Brandon has done an outstanding job as a Director at Fairfax. A number of our subsidiaries and his wealth of experience in the insurance industry have been a huge asset for our company and our shareholders. While Brandon will no longer be a director of Fairfax, we are grateful that he's agreed to remain as a director of the Board of Odyssey, and we will miss Brandon at the Fairfax Board, and we wish him and his wife, Lise, all the best in their retirement. Brandon.
As you know, in our proxy circular, we are very pleased to announce that Christine Magee has agreed to join our board as an Independent Director. Christine co-founded Sleep Country in Canada. Most of you have seen her ads as a prominent player in the sleep products industry and part of that worked in the banking and financial services industry in Canada. Christine is currently Chair of the Board of Sleep Country and works very closely with Stewart Schaefer. We will benefit greatly from her business experience and entrepreneurship. Christine. Now, you know, we have for 39 years, we believed in a small holding company. We've operated with a small holding company, and that small holding company, few officers, operating with great integrity, team spirit, and no egos. They protect our company from unexpected risks and take advantage of opportunity when it comes our way.
This group has worked for a long time and with trust and a long-term focus. We don't worry about quarterly earnings. We're looking at building our company over a long period of time, and I just wanted to take a minute to recognize they're all here. Give them a nice round of applause. When you have 40 years, and I'll be talking about a few, there's retirement. Brad Martin, Vice President, Strategic Investments, and Officer at Fairfax, is retiring after 26 years with Fairfax. Brad has been a part of almost everything that we've done. 26 years ago, we were a very small company, and he came to Fairfax from Torys, where Rick was from, and he continues to sit on many of the boards like Eurobank, and we continue to work with him.
But we thank him for his hard work, many contributions, and wish him, Monica, and their family a very happy retirement. Brad Martin. Now, I mentioned in our annual report, after six very busy years as our CFO, Jennifer Allen will transition to a new executive role with Fairfax as Vice President, Chief Business Officer. Jen has been with Fairfax for 19 years, and she continues. No indication of any retirement in the case of Jen. Done a wonderful job. And if you'll bear with me, we are very happy to announce that Amy Sherk, who's been with Fairfax for 20 years, 20 years, and a good friend of Jen, will become CFO of Fairfax Financial with the first quarter. So big round of applause to Jen and Amy. Now, I did want to recognize our President, Peter Clarke, who's been with us for 28 years.
First job was with Fairfax. So he's been groomed right here at Fairfax for 20 years. He's going to join me in the question and answer Q&A, particularly when I forget some of the details, but he's going to be there. And Peter runs our quarterly conference calls with Jen Allen and now Amy, our Chief Financial Officer, and Wade Burton, our Chief Investment Officer. And you see them. They've done it for the last year. They're going to continue to do it, and they've done an extremely good job. And I just wanted to recognize them again. Our President and Peter Clarke. In October 2024, I'm sorry, we had quite a few things happened in 2024. We purchased 100% of Sleep Country. It's Canada's preeminent mattress retailer. And I got to tell you, Stewart Schaefer is a fantastic operator.
He's been running the company for 10 years, and we are excited that he's going to. We're taking him private, and he's going to build a company over the next decades. We wanted to give Stewart a warm welcome. Stewart Schaefer. Similarly, in 2017, we acquired a 43% interest in Peak, which is Bauer Sports and Bauer Hockey. Our partner, Paul Desmarais III, decided in 2024 that they wanted to sell it. So we bought it, and now we own 100% of it. Bauer Hockey, 50% market share, hockey company, should be owned by a Canadian company. A wonderful leader, Ed Kinnaly. We want to welcome Ed. One more investment, which I talked about in our annual report, Berkley Group, largest independent timeshare company in the United States, now run by Caroline Shin.
Wade Burton is intimately involved in this, is really excited about our investment here. Caroline is here this morning, and let's welcome her. Caroline Shin. So this is, you know, we've got lots of booths. We've got lots of information on our company, and you're all welcome to look at it. The one thing I wanted to highlight was our trip to India. It's a trip of a lifetime. 10 couples, I think, went last time, and they had a fantastic time. They've written letters. One of them spoke last night at our dinner, and all of them think it's a trip of a lifetime. So we're going to repeat that. There's a booth here, January 11th to the 18th, 2026, early next year. Room for 25 couples, so 50 people. It's nice and small. You're going to have the best time of your lives.
Highly recommend it. Run by Thomas Cook of India. And I wanted to bring that to your attention. There's a Thomas Cook booth that gives you all that information. And I wanted to, you know, we're going to have something for him in India because Madhavan Menon, who built Thomas Cook 25 years with the company, will be retiring in May this year, 12 years with us, and has done a fantastic job, just a terrific job, long before Fairfax India came in. And I remember being asked by the Prime Minister to provide a thousand dialysis machines , thousand, 1,000 dialysis machines for the very poor in India. And the first thing I did was ask Madhavan. I said, "What's it going to cost?" And so he did a lot of work. Long story short, reduced the price. The German company that makes it reduced the price.
We have now done $1,400, $1,400 of machines for free, and we're going to $2,000. But a big thank you to Madhavan Menon, who's been fantastic for us. So you've noticed the 10 years, we've had executives. I'd introduce them, but there's so many now, so I don't do that. But 40th year, as I told you, there are retirements. And so I'm happy to say they've all seamless in the transitions within the company. We've had five of them. The first was Edwyn O'Neill, moved to Chairman after running the company for 12 years in South Africa. And JP Blignaut moves into the CEO role. Kari Van Gundy, running Zenith for the last 10 years, will move to Chair and pass on the CEO role to Davidson Pattiz, who's been with Zenith for 20 years.
Gobi Athappan, who's been with Fairfax for 23 years, is moving into the CEO role of Fairfax Asia. And at RiverStone, Nick Bentley has moved to chairman, and Bob Sampson, who's taking over, has been with us for 28 years. Amazing service to our company. And Brian Young has now officially joined Andy Barnard, President of the Fairfax Insurance Group, where Andy has been chairman. And so we are very, very happy with these five separate successions, all from within the company, not from even in our company. We don't go to Odyssey to get someone in Crum & Forster . It's all from within. And it shows the strength and talent that we have in the group. And for those retiring from their positions, the five, let's, this year, right here, give them a nice round of applause.
So, I know you know there's going to be, you know, once we finish here, we have some food for you, lots of books that you can look at. Some you can even pay some money and do some shopping. But I just wanted to highlight for you, and I've gotten a slide: 34 years since we began our donations program. Our annual donations have gone up approximately 550 times. Compound growth rate—we like compound growth rates—20% per year for cumulative donations of $480 million. We donate 2% of pre-tax, 1% from the companies, 1% to our foundations. This is a wonderful book. You all should; shareholders, you will be quite inspired by our companies that have spent time and money providing help to their communities. It's right here. Everyone can get a copy, and that's the second time we've got the donations program.
So now I will quickly go through the formal meeting, give you a short presentation, and then Peter and I are looking forward to your questions. We've got the mics all set up, so we'll be ready to do that. Now, you can also submit your questions in real time on the platform, which will be received by Jeff Stacey, who's right there, and who will moderate the Q&A from the web. And now I'm going to go to the formal part of our meeting. And so you've heard this before 10 times if you heard it once. Ladies and gentlemen, welcome to the Fairfax Annual Shareholders Meeting. Prem Watsa, Chairman, CEO, I shall ask Derek Bulas, Vice President, Chief Legal Officer and Corporate Secretary of Fairfax to act as Secretary of the Meeting. Please refer.
I shall also appoint Shirley Tom and Louise Waltenbury of Computershare Trust Company of Canada to act as scrutineers and to compute the votes of any polls taken at the meeting and to report thereon to me as Chairman. I can report that as a result of reviewing an affidavit of mailing and a preliminary report of scrutineers, satisfied that notice of this meeting has been duly given, quorum is present, and that this meeting is therefore properly constituted. Today's agenda will consist of three: tabling our annual report, followed by three resolutions. First, to elect our Board of Directors. Second, to reappoint our auditor. And the third, to consider the shareholder proposal that was received from Investors for Paris Compliance on behalf of the Salal Foundation.
I propose to move quickly, as we've done in the past, to the formal business, announce that the minutes of the previous annual meeting, April 11th, are available for inspection from Fairfax's Corporate Secretary. As well, I formally place the annual report, which is right here. Our beautiful annual report is right here in front of you for 2023-2024 with the auditor signing off. Finally, I declare that the total number of votes attached to the shares represented at this meeting by proxy, which have been directed to be voted against the shareholder proposal, is not less than 81% of all votes that may be cast at this meeting on such matter. So we'll open the polls. Voting today will be conducted by electronic ballot for those attending virtually and by a show of hands for those attending in person.
I will ask that the balloting be open to registered holders and appointed proxy holders. The polls are now open on the platform. All registered holders can vote, and it'll be properly logged. Following the presentation of the motions, Jennifer Allen will confirm for us when the polls have closed. Once electronic balloting closes, your votes will be submitted. Now, election of directors. With your consent, I will now move directly to the election of directors.
I am Peter Clarke, and I nominate as Directors of the corporation for the ensuing year, Robert Gunn, David Johnston, Karen Jurjevich, Christine Magee, William McFarland, Christine McLean, Brian Porter, Timothy Price, Lauren Templeton, Benjamin Watsa, Prem Watsa.
Thank you, Peter. Are there any further nominations?
And one more, Prem, William Weldon.
Oh, sorry.
I usually think I'm the last, but
that's true.
Alphabetical.
Terrific. Thank you. Are there any further nominations?
Are there no other nominations for directors that have been received? The number of directors nominated is exactly the number to be elected. I confirm that those 12 nominees are proposed for election as directors of the company. Given the hybrid meeting and the fact that we will also conduct a virtual vote, we will have a vote on this together with the next resolution. Now, invite a resolution regarding the appointment of an auditor.
I move that PricewaterhouseCoopers LLP be appointed as auditor of the corporation to hold office until the next annual meeting.
Can I have a seconder?
I second the motion.
Thank you, Jen. For those attending in person, I would ask that you please vote for resolutions one and two by a show of hands. All in favor? Any contrary? Seeing none, both those resolutions are passed.
The final item of business to consider is the shareholder proposal submitted by Investors for Paris Compliance on behalf of The Salal Foundation. At this time, I'll recognize Ms. Taylor, representative of Investors for Paris Compliance, to present this proposal and make a motion that it be put to a vote. Ms. Taylor, please go ahead.
Thank you. Hello, everyone. Good morning. My name is Kiera Taylor. I'm with the proxy holder, Investors for Paris Compliance, and our organization filed this shareholder resolution requesting financed emissions disclosure. So, Mr. Watsa, as you outlined in the letter to shareholders this year, value is found in the power of a decentralized model where people are trusted to lead. You've spent nearly 40 years building a successful company on the principles of long-term thinking and a belief in people.
You've also said that you want and expect Fairfax to thrive over the next 100 years and beyond. As you know, that kind of ambitious vision requires not just resilience, but also foresight. And that is exactly what this proposal requesting financed emissions disclosure is about. Fairfax has acknowledged, of course, that climate change poses a material risk. You've recognized rising reinsurance costs due to climate change, rising weather-related losses, and the material impact that this has on equity markets. Last year, Fairfax itself faced $1.1 billion in catastrophe losses. And already this year, possible expected losses up to $750 million from the L.A. wildfires. And of course, the industry consensus is also clear on this as well. These aren't anomalies. The climate is changing, and it's reshaping the risk landscape for insurers. So the question is, what is Fairfax doing about it?
How are you reassuring investors that Fairfax is properly managing risk, but also taking advantage of the opportunities? Currently, Fairfax is the fifth largest insurer of fossil fuels globally and also has more than $1 billion invested in the industry. Of course, we know the use of fossil fuels is driving climate change, which is causing the worst extreme weather events and escalating the physical risks that are not only costing the company, but threatening the industry. Yet, Fairfax hasn't taken the most basic step that we do see from its peers, which is disclosing financed emissions. Of course, this doesn't need to be perfect. It just really needs to address a disconnect. On one hand, there is an acknowledgment that climate risk is material. Then on the other hand, there's a lack of basic data to assess it.
So to put it plainly, how can we manage what we haven't measured? You can also think of it this way. If our competitors are reading the map while we're driving blind, it's not just a strategic disadvantage, but it's a liability. Fairfax has thrived on trust and disciplined risk management at the holding company level. And decentralization works because of the critical role of centralized financial oversight, capital allocation, investment decisions, all of the things that you do at the center to manage across the group. And of course, this is not a contradiction of decentralization. It's a feature of it. You give your CEOs autonomy over operations, but you still steer the ship. And your shareholders rely on you to make sure it's pointed in the right direction, as we all know. Disclosing financed emissions does not interfere with that model. In fact, it strengthens it.
It gives you and your CEOs better visibility into the risks that you're already acknowledging. And it ensures that trust, one of the three T's in your letter to shareholders, is earned and maintained through the second T, which is transparency. So this resolution also looks to protect the long-term value that you work so hard to build. Leading global insurers have recognized the financial importance of disclosing financed emissions, choosing to do so voluntarily because it enhances transparency and strategic planning. This also matters because climate risks are systemic. Unlike one-off company risks, climate risk can't be diversified away. It affects every portfolio, every market, every business model. The Swiss Re Institute projects that insured losses from natural catastrophes could double in the next decade. And we're already seeing that unfold, of course. So in closing, Fairfax has already delivered 600-time shareholder returns because of your leadership.
If Fairfax is going to survive the next 100 years and beyond, it has to look squarely at the risks that are shaping the next 100. And that starts with measuring what matters. Thank you very much for your time.
Thank you very much, Ms. Taylor, for your proposal. Would someone second the motion, please? Thank you very much. And I would thank you, Mr. Van Dusen. I would direct your attention to Schedule A of Fairfax's Management Proxy Circular, which describes in detail the position of the board and management on this matter. The board and directors recommend that shareholders vote against the shareholder proposal. We will now proceed to a vote on the shareholder proposal. For those attending in person, I would ask that you please vote by a show of hands and vote against this proposal. All in favor? Contrary? Thank you very much.
We will now take a brief pause for 60 seconds to allow registered holders and proxy holders to complete their electronic voting on all of the motions brought forth at this meeting. Jen Allen will give us 60 seconds, Jen, at this stage please. Thank you.
Mr. Chairman, the voting is now complete and the polls are closed.
Thank you, Jen. I have been advised by the scrutinizers that the proxies deposited for the meeting have now been voted. I can confirm the nominated directors have been appointed as Directors of the company until the next annual meeting. I confirm that PricewaterhouseCoopers has been appointed as auditors of the company to hold office until the next annual meeting. On the shareholder proposal, the voting results show that approximately 82% of the votes cast were against the proposal.
And there are a greater number of votes against them than in favor. This motion is not carried, and the shareholder proposal is not passed. We will file a report on SEDAR+ setting out the voting results following the meeting. So thank you very much for that. May I have a motion for termination now?
I move that this meeting be terminated.
Thank you very much, Jen. Can I have a seconder?
I second that motion.
Thank you, Peter. And I declare the meeting terminated. Now we will go into our slide presentation, a quick one. This is the 40th one. So I'm going to go a little quickly because you've heard it all. So with that, we will then go into our Q&A. These are our slides. And the first three, as you will imagine, are our guiding principles. That's the base for our company, the guiding principles.
It basically says that we're long-term and we're focused on doing well for our customers, our employees, our shareholders, and the community where we operate. This whole company, when we began, was worth $2 million. Today, we donate each year $80 million, $40 million of which I'm just shocked at what the free enterprise system has allowed us to do. We'll talk a little about it on Q&A. It's amazing what can happen. We never expected it when we began 40 years ago. It's run for shareholders with a long-term focus, always want to be soundly financed, and complete disclosure to our shareholders in our annual report. Guiding principle structure is decentralized. We talk about decentralization. It's decentralized because that's such a big positive. We'll be responsive to your questions and happy to hear more from you.
We always will be a small holding company, not an operating company. Our values are part of the guiding principles so important in any company. Honesty and integrity are essential. Results-oriented, team players, no egos. All of this has followed, and the Golden Rule you'll see in the next slide, but the way you fail in a business is not to take risk. You have to take risk. Risks are there, but you do it in a very careful, calculated way, and sometimes you're going to make mistakes, but we never forget that we have to take risk. I'd like to think we're entrepreneurial, and we work very hard. We have a few laughs in the office, and here, the Golden Rule. This is such a terrific chart, and it shows that the Golden Rule, treat people like you want to be treated yourself, is in all the faiths.
You've got Christianity here. You've got Judaism. You've got the Islam. You've got Hinduism. You've got about 20 faiths, and they all say one thing. Treat people like you want to be treated yourself. Not too complicated. The golden rule. We are so excited about this that we have that picture in each of our offices across the world so that everyone recognizes that we're all the same. Centralization, decentralization. I think the heading says it all. Faith in many leaders, not a few. Not myself, not Peter Clarke, not Andy Barnard, not Brian Young, but all of the leaders that we have here. It's decentralized. They can run it, and because of that, you'll see later on, we have huge management retention. Very rare for a company to have 25 years, 28 years, all our companies, and I'll show that to you. Flexibility, ownership, accountability.
You can understand all that. But it's trust. All of these leaders stay with us because they trust us. They're very talented. And they know there's transparency. They can ask us any question, and we can ask them any question. Always flowing information, flowing both sides. Here's our decentralized thing that you've seen before. Slide. And you know there's about 26 companies in total, not including Digit, which is not consolidated, and a company in Vietnam, not consolidated. If you add the two, it'd be 28. We show it in our annual report. And very, very powerful structure. I can say that because I've lived it. It's unbelievable when you empower people, what happens. And they develop like you won't believe. So this is a nice slide. We used to have it at the end. Business can be a force for good.
Over 39 years, we wrote almost $300 billion in premium. But we paid claims. Claims is how we help our customers. Almost half of that, $150 billion. And each year, I think we pay something like $23 billion now because we've become bigger. $23 billion of claims on time, and we pay them. Annual salaries and benefits each year, $2.6 billion to our employees all over the world. This is business can be a force for good. What business does? Cumulative donations, I told you. Paid taxes. We pay taxes across the world. $7 billion. A little surprised with that number. $7.1 billion. And we grow book value at 18.7%, almost 19% since inception. And most importantly, our moat is a strong, strong culture. It's very tough to develop that. And how did we do? I told you we are compound rated 19.2%.
There were 6,000 companies listed: 6,000 companies listed in 1985 in the United States where there's more data, 6,000. And if you look at it in 2024, only 600 survived: bankruptcies, takeovers, mergers, whatever. 90% didn't make it. Only 10% survived, 600. Then you say, how many did more than 15% compounded? How many had a stock price listed? How many compounded more than 15%? 55, almost 60. 1%. Only 1% did more than 15%, and then where does Fairfax rank? 19.2% ranks us number eight. You can see the ones on the top: Apple and Home Depot and very, very good companies. Long period of time, so we're so grateful for that, but the point I'm making is you must have a good culture, but you have to perform. In a free enterprise society, we've got to perform.
We don't worry about performing in three months, six months, nine months. We worry about performing over time. And that's what that shows. And I've showed this slide for you. Underwriting income, very disciplined underwriting is what we're all about. And so you can see our underwriting. $1.8 billion in 2024. That's about 20% more than the previous year. And we absorbed $1.1 billion in cat losses after absorbing that. And we had reserve redundancies. We always want to reserve well. And so you can see our reserve redundancies for a long period of time. I think we've got like 18 years of reserve redundancies continuous. And that's how we want it to be, reserve redundancies. This just shows you the investment income, interest and dividend income. We did not reach for yield. We had a whole bunch of 60+% i n 2021. And we looked quite silly.
But that allowed us to invest in treasuries as the rates went up. And now you can see our interest and dividend income in 2024 is $2.5 billion. That's U.S. dollars, $2.5 billion. That's up about 30% from the $1.9 billion. And that $2.5 billion, we think, will continue. The share of profits, you can see that. And the total investment portfolio has grown up very significantly because we grew our premium during that time period. So you can see our P&C insurance operating income has gone from basically nonexistent in 2017 because we had a big hurricane, a few hurricanes. And now it's running at about $5 billion. But in spite of all of that, what is good about our companies, we've reduced the shares outstanding.
So if you're a shareholder and you haven't sold out, then you see you get more of our company because there's only 22 million shares now outstanding. So to summarize then, interest and dividend income, we used to never make forecasts. And now we can say interest and dividend income for the next three or four years is $2.5 billion. We can see that because it's coming from mainly treasuries, mainly government bonds. Our corporate bonds might be one or two years in terms of term. Underwriting profit. Now, that's not certain because you could have a huge amount of hurricanes. You could have all sorts of catastrophes, wildfires, whatever. And so we have $1.5 billion over time. But that could be much less depending on catastrophes. The share of profit from associates, we feel a lot more comfortable. $1 billion.
These are the big positions we have in associates like Eurobank and Atlas and Poseidon and the other companies that are listed. Our operating income is $5 billion. You, I'm looking at that and you have to remember we came from a $10 million company. I can't believe I'm saying $5 billion in operating income that we can see the next few years. But no guarantees as I mentioned to you. If you work all that out, it's about $150 per share before any investment gains or losses, fluctuations in investment portfolio that we have. So for all these years, we focused on discipline. What's our formula? Disciplined underwriting, value investing, and the combination of that gives us a good return. Value investing, disciplined underwriting gives us the return. So you can see our stock price was $3.23 when we began.
And here it's now in U.S. dollars. It's about $1,400 there, $1,360, $1,390. And you can compare our returns to the 19% compared to the S&P. This is in U.S. dollars compared to the S&P 500 index. Now, this is a big strength we have. Just look at the years of service that we have as you just have a look at each of the vice presidents and Andy Barnard at almost 30 years, Brian Young almost 30 years, Jonathan Godown, Peter Clarke, on and on and on. And I just wanted to highlight John Varnell now, 38 years. Give him a nice applause. John doesn't make any speeches. He just gets things done. And if I want to really know what's happening, I ask John because he doesn't sugarcoat anything in terms of what's happening in the company. He tells me even to my face when I'm wrong.
I always like to listen to him and then our operating management. Look at the years of service. This is what decentralization does. This is what a great culture does and it's such a big strength for us over all these years. So just let you have a look. Silvy Wright, 31 years at Northbridge. This is the investment committee. The two guys, Roger Lace and Brian Bradstreet on the left, I worked 39 years here, 38, 39. But I've worked with them for 50 years. Unbelievable. Give them a nice round of applause. You can see Wade Burton, 17 years. And you can see Kleven and Lawrence Chin, Chandran, 31 years. This is why Fairfax has done well, all of these people being with us for such a long time. So that's the management team, decentralized operating management, decentralized investment management.
Very quickly then, for the investment, for the income statement, this is how it works. $32 billion in premium, underwriting profit, 92.7% combined ratio, investment income, including gains, was 6.7%, 6.7% on the total portfolio that we have. And you add all that and you get $3.9 billion. And that results in a book value increase of 14.5%. Now, in that, there's some foreign exchange. Last year, we had about almost $500 million of foreign exchange fluctuations that went through our company. The previous year, it was a positive $400 million-$500 million. So book value, again, has to be looked over time. This is the single. If I had to leave you with one thought, this is the slide. This is a total float that we have is $37 billion, which is $1,700 a share. Our book value is about $1,100 a share.
It's all U.S. dollars. But we have a float of $1,700, more than 50% more than our book value per share. And that float is earning money for you, our shareholders. And how does it earn money? It's the benefit of the float. In the last five years, it's 4%. That means the underwriting profit divided by the float. In 2024, $37 billion of float, $1.8 billion of underwriting profit. That's a 5% profit on the float that we get comes to shareholders. And that money, the $37 billion, we can invest. And our fixed income is giving you about 5%. So 5% from underwriting profit, 5% from you get 10% before we even go into the investment side and the other 10% we get as long as you're focused on underwriting profit. And then we've got the $37 billion. Our investment portfolio is close to $70 billion.
You can see there's a whole ton of money working for you. This is the importance of the float. And yes, last night I said, unfortunately, I wasn't the guy who figured this out. It was Francis Chou who told me about the benefit of the float. And it's the single biggest thing for us. Can't emphasize that enough for you. Our operations are global, 21,000 plus, 50 countries. This just shows you where our money is. Fixed income portfolio, about 5%. We're always not focused on short-term results. Capital preservation, especially with all the things going on in the marketplace. Capital preservation, very important. It's always been important, particularly important now. And we expect $2.5 billion for the next four or five years. I'm not going to spend too much time on this. You know that. Investments in India.
India, we think, is a massive opportunity, unlimited opportunity, decades to come because we had a really good presentation on Fairfax India yesterday. It's all going to be on the website. You should review it if you haven't. The opportunity in that country, democracy, free enterprise is going to be very, very significant. And here we just show you our investments. And the big one is Digit. Kamesh Goyal is here. And it's been a spectacular performance. It started a company from scratch, CEO, first guy to be working in the company seven years ago. Today, it's writing more than $1 billion, 4,500 people working at Go Digit. And it's just begun. Business is growing at 35%-40%. And it's phenomenal what Kamesh is doing. But this just shows you all our investments. And our financial position, very, very strong.
You can't be long-term unless you have a strong financial position. That means I was just reading something about U.S. interest rates were low. And about a third of the U.S. debt matures in the next year, 1/3. It's like $6 trillion. And that's a tough spot to be in because you have to go in and refinance. What we do is we don't have any maturities for the next three years. If there's any maturities, we finance because things change in the bond market. You can't count on it. You think interest rates are low, it goes up. So we have no maturities for the next three years. All our borrowings, there are long-term debt, bond issues, pay your interest, pay your principal, no bank borrowings. And we have $2 billion of, as I mentioned previously, $2 billion of bank lines for problems.
If problems we're going to have, that's how business works. So when you have a problem, you don't want to go looking for money because you're not going to get it. So we always have $2 billion there. Five-year lines. Jen's got five-year lines, which means that if you don't want, you say, "I don't want to be with Fairfax. I want to get out." You still have to stay for four years. You can't just pull out. So very, very strong. You look at the ratios, very strong. And last slide before we open it up for Q&A. Guiding principles have remained intact. Our performance, we think, is good. You see the strengths there. And most important, we're well positioned for the future. Our fair and friendly Fairfax culture, which is represented by all of us here. So thank you for listening.
We'll open it up for your questions. Thank you. So this is the time we answer any and every question you've got. There's one, two, three, four mics. And four mics are there. Let me just get my thing from here. And so we'll start from mic one, Yelena. Do me a favor, just speak closer to the thing so we can hear, okay? Thank you.
Okay. I'm Paul Durden from Burlington. The most important question I think I have for you is, why have you not had stock splits along the way to make the share price more accessible to the small retail investor?
Very good question. We started at $3 and change, as I mentioned to you. And I haven't been asked that question for some time. So obviously, it's not going up to $1,000, $2,000, brought that question. We just think it doesn't make any difference. You can buy. You're just having more slices of the same pie. And so we'd rather people analyze it and buy one share, two shares, or five shares. And these days, Walter, the brokerage houses are being able to sell shares at half a share or a quarter share or whatever. They slice it and they do that. But we just like to not have any stock splits. We think that's the way this. So this is a company that has no stock splits, doesn't do any investment promotion. And so we attract people like you who really read our statement, read the annual report.
And they like what they read and they come and buy it. And because they've done their work, they hold it for a long time. So that's the reason. Thank you. You want to follow up?
I have another question, but I'm willing to go in rotation if you want to go to another mic.
No, go right ahead while we've got you.
Okay. This whole thing about tariffs, I understand that the numbers are not finalized yet. But this is a huge international corporation. And not just are you selling insurance, you're doing charitable things around the world. And you are also buying % interests in all different kinds of companies, some even 100%. And as things are moving around the world and as these percentages are finalized, what's the impact on this company?
You made a good point. As they're finalized, the question is, what's going to happen? You don't know. I just wanted to say, you're dealing with the President in the United States, who's a fantastic negotiator. What he's done recently has brought, I think, 75 countries to negotiate with the United States. And you just have to wait and see what happens. Our view basically at our insurance business is hardly affected other than an economic downturn, which we'll all be affected on. But otherwise, we just have to wait and see what happens. We feel very comfortable with our financial position, with where we're located. And we think it might result in significant opportunity. But that's how we look at it. But your question is a good one. And we don't know what the answer is yet. Thank you.
Thank you.
Thank you very much. Number two.
Hi, Prem. John Liu from Portland, Oregon. Thank you for everything you do. 23 years as a shareholder. Really love being here.
Give him a nice round of applause. 22. That's what we like. All right. That's what we like.
Really love being here. It's clear that your culture doesn't just permeate your management and your workers, but also your shareholders because I've really had the pleasure to meet most of you folks, and they're all very pleasant and fantastic and smart people. My question is, last year, I was here and I asked about Kennedy Wilson. And after the meeting, I was actually surprised that some of the shareholders came up to me, and they didn't seem as enthusiastic about Kennedy Wilson as I was and am. I went back and looked at some of the concerns that they expressed, and I still like it, and I particularly like it at cheaper prices, and I'd love to hear your opinions and your thoughts on your holding of Kennedy Wilson.
It's even better because we have Bill McMorrow with us, who's been a fantastic partner for 15 years. It's because of Bill we've been able to get first mortgages, almost $5 billion of first mortgages. It'll be great to hear from Bill in terms of first mortgages and any comments about Kennedy Wilson. Bill, come right in there. Give Bill, great partner that we had, a nice warm up.
First of all, Prem, I just, for your 40 years, to congratulate you on this extraordinary company that you have built. And it has been really one of the great honors and privileges, I think, of my business life to have 15 years together with you and Peter and Wade and Brian. And we've done some really extraordinary things together, really built around the principle, I think, of trusting each other and being transparent on everything that we're doing. The credit business that we did, and we've done many different things together, but the credit business that we did together, just as a bit of a refresher in about two years ago now in the United States, we had a series of banks that failed. We had three major banks that failed.
As a result of that, really all the regional banks that were under $50 billion in assets had a run on their deposits. In the case of the bank that we bought this loan portfolio from, they lost a third of their deposits in two weeks. With the advent of the iPhone, you can move your money pretty quickly. What happened was that the bank had to sell assets and they had to sell their best assets. We had had a relationship with this bank for over 20 years. They needed a counterparty that they knew they could count on to do something in a very short period of time. Because if they hadn't, I don't say for certain, but they had a chance of also being closed by the regulators.
In May 2023, just to refresh everybody's memory, under the guidance of Matt Windisch, who's our President, he's here today, we bought a $5.7 billion construction loan portfolio at a discount. We brought another company in for $1.2 billion of that. We closed on $4.5 billion. One of the key parts, so there were two parts of it. One was buying it and the other was what we're going to do with the business going forward. There were 40 people in the business, Prem, as you know. One of the conditions of us doing it was that they came to Kennedy Wilson. Now in the afterlife, what has happened is that the roughly $4.5 billion, 27 of those 65 loans have paid off at par. Remember, we bought it at a discount, but they paid off at par.
Over the last now 18 months, we've generated almost $500 million of interest income, and the current portfolio is generating roughly $350 million a year in interest income. The second part of the idea was to build a business around these 40 people, and we had really great timing in the sense that the banking industry in the United States was going through its own correction. The regional banks, which were big providers of loans to the multifamily and the student housing market, backed away from that market, and so over the last 18 months, as Prem pointed out, we've generated about $5.5 billion of new loan origination. There's hardly anything outstanding on that portfolio right now because the borrowers, which are all very first-class borrowers, big companies, they have to put their equity in before we fund our loan.
And 100% of the loans that we've done have been to the multifamily, the housing market, multifamily housing, and student housing at major universities around the United States. So the interest income at $350 million, we expect to grow significantly over the next couple of years. And that's the story. It was another one of these success stories that really turned out well for both our companies. As it relates to our company, I think the one thing that has heavily impacted anybody in the real estate business the last two years has been the elevated interest rates that were really brought on by, and Prem referred to it a little bit, the United States has gone from we're running a deficit of $2 trillion a year. Our national debt's gone from $20 trillion - $36 trillion in a very short period of time.
What happened out of the pandemic, where there was so much printing of money, it caused the highest inflation rates that we've had in 40 years and the highest interest rates that we've had in 20 years. Anybody that's in a hard asset business, that has an impact. But fundamentally, we have a great business. 70% of our income relates to housing, housing and credit. In the three key markets that we're in, which are the United States, the United Kingdom, which ironically has become somewhat of a safe haven for capital, but the United Kingdom, the United States, and Ireland, and those are the three markets that we're focused on. We also are fortunate that alongside Fairfax, we have some very big capital partners, the Government of Singapore, AXA, the big French insurance company. We've been in Japan now for 30 years.
We started a company from scratch there 30 years ago. That became a public company in 2002. It's now owned by one of the largest banks in Japan. And so we've had very, very good success over the last year and a half of attracting capital from Japan to our platform in the United States. So I think the future for the company is great. And we've had just incredible support from Prem and his team. We've done now almost $17 billion of ventures together, all highly successful.
Please give Bill a nice round of applause. Bill's been a fantastic partner. And those $5.5 billion of loans, 7% or 8% interest rates, no risk, two- to three-year maturity has been just fantastic. So thank you for your question. Thank you very much. We go on to number three. Can you come close, please? Yeah.
Hi, Mr. Watsa. My name is Akash Uddandam from the Horatio Alger Association. And I just want to start off by, first of all, sincerely thanking you for all your mentorship and inspiration you've given, not just me, but no doubt, some of the other people in this room, and definitely some of the younger people that I've met just outside of the hall. And as you guys all know, Prem is always the first to applaud others on their journey, which is incredibly supporting. But if you could just take a moment to give this man an amazing round of applause for all the work he's done so far.
Hey, I'm supposed to do that.
Mr. Watsa, my question to you is that Fairfax has historically taken a contrarian approach to investing, often deploying capital when others are pulling back. With valuation in certain sectors still elevated despite macro uncertainty, are there any specific industries or asset classes where you're seeing mispriced value today?
Yeah. No, of course, we don't talk about specific companies and sectors. But the valuations are still high, especially in the Magnificent Seven, tech industry. So we just, as I said in the annual report, we're saying caveat emptor, be very careful in your investments. All sorts of individuals are in the stock market. Lots of speculation taking place, crypto and all the others. And so you just have to be careful. You don't know how it'll end. On the other hand, there's a possibility that President Trump creates a wonderful environment. He's got lots of good things going there. And so we just have to wait and see. We don't forecast things. We're opportunistic. So we need to get a good price, good people, good companies that we like, like our Sleep Country, like the ones that I talked about. But otherwise, we just wait and see.
Thank you so much.
Thank you very much, Akash. Give him a nice round of applause. A young man. Number four.
Hi. My name is Seth Alani from Toronto. First, I just wanted to thank you, Prem, and the rest of the team for all your hard work. I've been a shareholder for only four years, but the more I learn, the more I appreciate the masterpiece you have all created. To that end, I recently began spending more time on Ki Insurance, led by Mark Allan after it spun out of Brit at the beginning of the year. To me, it seems like the returns at Ki might be similar to what Go Digit has delivered under the leadership of Kamesh Goyal over the last eight years. In addition, Blizzard Vacatia, led by Caroline Shin, is a brand new investment that also looks like it has the potential to generate outsized returns.
If all these CEOs are here today, I would love to hear what opportunities they see for their businesses over the next five years, including if they foresee requiring additional capital to grow. Thank you.
Yeah, thank you for your question. That's a good question for Peter. Peter, what do you say?
Thanks. Well, I'll start with Ki, and maybe I'll pass it back on Vacatia to you. But no, Ki has been a huge success, led by Mark Allan. It was incubated at Brit and developed at Brit. It's technology-based. It's built on an algorithm. They've worked with Google, Google Cloud. And as Prem mentioned last night, that Lloyd's, it's a syndicate within Lloyd's, which is a syndicated market. So there's a follower, there's a leader in the market, and then there's other markets that follow that. And what Brit and Mark Allan had this idea that using an algorithm to be able to predict which markets to follow and then take the data that they collect and build on that over time. And it's been very successful. And there's two functions in that. One, to take the expenses down, that you don't have teams of underwriters doing it.
Two, that if the algorithm is right, you should be able to outperform the market. Today, I think Ki is writing almost $1 billion of premium. Thankfully, it's making a very good return that's driving the capital to take the business forward.
Thank you, Peter. And for your information, we have Mark Allan, the brains behind it. And as I said last night, he's the one who's developed it with Matthew Wilson. And they were part of Brit. But at January 1st, they're effectively separately a separate company. And Mark Allan has done a wonderful job. Let's recognize Mark. Thank you, Mark. Did you ask about Vacatia too?
I did, yeah.
Yeah, it's timeshare, and so when you timeshare, there's, say, about 50% are taken by timeshare. You get a week here and a week there, and you pay for that privilege. The other 50% is not used, so it's just lying vacant, and Caroline figured out how to make it like a hotel for the other 50%. And it can be phenomenal if you're able to do that. She's done it in smaller operations. Now we're doing it in a big scale, and huge opportunity if she's able to do that. We, of course, think she's going to do it, but that's where that came from. So thank you, and we'll go on to number five with Jeff.
Prem, the first question is about the broader insurance market, and just would like an update on the investment or the insurance underwriting environment and also whether you see the market turning soft.
Terrific. So this is when we get our insurance gurus, led by Andy Barnard. Who's almost 30 years. Our insurance operations have changed because of the leadership of this man. Andy Barnard, why don't you come in, Andy? And then a few others.
Thank you, Prem. Is this on?
Yeah. You got it.
Of course, we had a fantastic year in 2024, $1.8 billion of underwriting profit. Seven of our companies achieved record underwriting profits during 2024, which we were very pleased and happy and proud to see. But what I'd like to focus on, and I might let some of my colleagues talk a little bit more about the market conditions, is the reasons that we've been able to achieve this success. I'd like to go back to that slide that Prem showed. He shows it every year. But the slide that shows the tenure of our CEOs across Fairfax. Because I really don't think there is any more important factor behind our success than what that slide reveals. Continuity of management is just so vitally important in our industry, as it is in many businesses. But I think it's especially important in the insurance business.
It allows us, over time, to build, to grow, to improve our operations. And we do so without the distractions and the disruptions that come from changes at the top. Now, for those of you that might follow the trade press in our industry, you would see amongst many of our competitors, and I'm sort of referring to the global commercial property and casualty market, which is really the main theater that we operate in. But for so many of these companies, there's just a revolving door. And it's not just the CEO necessarily, although sometimes, but it's also so many of their key executives. And this creates circumstances that make it very hard for companies to have the stability that enables them to thrive and improve and build and grow over time.
At Fairfax, our decentralized operating philosophy, whereby we keep our companies separate and autonomous, creates a much more favorable, much more rewarding environment for our CEOs and for their management teams. And it is that environment that allows them to continue to build and grow and improve their operations. And that's what you're seeing in the results that we've been able to achieve at Fairfax. And so we've said this many times, we may say it every one of these meetings, we are so blessed. And this gets better and better every year because of that continuity. But we are so blessed with the remarkable collection of CEOs and leaders that we have running our companies. And again, I don't think there is any more important explanation for the underwriting success that we've been able to achieve. Prem referred to our moat, the culture of Fairfax being our moat.
This retention of employees is really something that is attributable to the unique culture that we've had at Fairfax, supportive, rewarding, empowering, and that's what's enabled us to have this remarkable duration. I would say if you compare us to any of the major companies in that global P&C world, I don't think you would find anyone with close to the duration of tenure at the top, and not just at the top, at the very top, but also amongst their senior management teams that you find at Fairfax, so that's something that we're very grateful for, and I just wanted to sort of reemphasize all of that because I just think it's so vitally important for people to understand as to what is behind the success that we've been able to grow and build and kind of get better each year at.
So with that, let me turn it over to my colleague here, Brian Young, and he can give you some further perspective on our business.
Thank you, Andy. Andy and I have worked together for 35 years. We joined Fairfax 29 years ago. He's been a mentor and a friend. And it's been a tremendous partnership. I've now moved up to Fairfax alongside Andy, overseeing all of our insurance operations after 29 years at Odyssey, the last 14 leading the company. And I leave the company in great hands. Carl Overy, who is my replacement, Carl and I have worked together for 23 years. And again, as Andy points out, the continuity of leadership. Carl was my chief actuary when I was running London for Odyssey. And after that, he's run various businesses within Odyssey for 15 years. And now he's taken over the company. And he's supported by a great leadership team. Odyssey's had a great run. And I have no doubt they'll continue to be hugely successful in the years ahead.
On the market, we've made a lot of money as an insurance business over the last few years. A lot of companies have. When you do well, more capital tends to flow into the industry. We've seen that. There's more appetite for the business today. We are seeing more challenging market conditions. We can still make a profit in this market. We see opportunity for profit. Across our 26 countries, sorry, 26 companies, we have more than 250 profit centers. We're in more than 100 countries around the world. We have access to business in so many different areas. Markets move at different pace, different direction. Because we're local, because we have this diverse business, we're able to take advantage of opportunities today. I still think we can grow. I still expect us to make profits.
But with Fairfax, I mean, one of the strengths of Fairfax is the long-term approach to the business. We don't measure performance quarter to quarter, even year to year. We look at it over time. And as a business leader and all of our business leaders, it's really wonderful to not be pressured to write business when the opportunity to make a profit is not there. I've been doing this for 29 years at Odyssey. I was never pressured to write business that I didn't think we could make money. So Fairfax has always been patient for growth. But we've also encouraged, when the opportunity is right, we want to encourage our companies to grow profitably. And we have over the last few years. One point I'd like to make, I mean, we are decentralized across all of our companies and profit centers.
But that doesn't mean that we don't collaborate. We collaborate. It's really important. I see my job, one of the key parts of my job as I move to Fairfax is fostering that collaboration across the group. We have working groups across different disciplines. The most recent is an AI working group that we've formed. And we have 75 people across the Fairfax network that are engaged in that working group. And a lot of good things are coming out of that. But not just that. All the other disciplines, whether it's claims or actuarial or IT or finance, it's important, even if we are decentralized and our companies are operating independently, that we communicate with each other. Where we can, we want to share capacity and use the larger resources we have to swing a bigger bat in the market. We want to share intelligence and knowledge.
If we're doing something well in one business, how can we transfer that to another part of the company? And because of the spirit, it's a really strong spirit in the company led by Prem. People want to work together. People want to help each other. So it really is. It's been a wonderful run for me. And again, I'm really excited to now be working alongside Andy, supporting all of our insurance companies. So with that, I might turn it over to Lou Iglesias at Allied to talk a little bit about his journey. Thank you.
See if we can walk around a little bit. Congratulations, Brian. Great. That's good to see everybody. Obviously, one of the themes at the AGM this year is decentralization, so I thought I would try to make that a little bit exciting and talk about Allied World and decentralization and how it affects an operating company, and I'd like to start with a little story. I know some of my new friends that I met last night would like to hear a story about that, so going back to 2016, 2017 timeframe, at Allied, we were looking for a transaction. We were a mid-sized public company. We thought getting a bigger, better platform would help us continue our journey, build our company out. We felt that we still had the ability to create a lot of value, so we were talking to several suitors.
And one we got pretty far along with. We were working with them for over a year. And we're getting close to the finish line. And so now we're getting into the details. And we started to realize that this would be a merger. And that it would be likely that Allied World would be broken up. And that didn't sit very well with us. That wasn't what we wanted as a company. So that transaction never happened. Shortly after that, we get a call from Fairfax. And at the time, we didn't know a lot about Fairfax. We were a little bit tired of working for over a year on a transaction that didn't work. And we were a little reluctant. But Prem said, "Wait a minute. Fairfax does things differently. You should hear us out." And we all know Prem can be very convincing.
So we took the meeting. And we heard a lot about the Fairfax culture, which sounded very good to us. And we heard a lot about decentralization and the independent operating model, which sounded great to us. Because again, we felt that we still had a great runway to build our company out. So we finished the meeting. I went across the street to the restaurant with John Bender and Wes Dupont, who were sitting up there, and a couple others. And being the good underwriters that we are, we were kind of skeptical. A little bit. Prem loves to tell that story. We're a little skeptical. But we did our diligence. And we found out, yes, that is how they do it at Fairfax. And we did the transaction. And very quickly, since Fairfax exceeded most of our expectations, the skepticism went away.
Very quickly, we got past that. But the point of this story is, number one, decentralization was so important to Allied World that it's likely that we may never have been a part of Fairfax if it wasn't for it. I think the second thing to take away is that I think Fairfax is going to have the number one slot to talk to companies and acquire companies that still feel that they could do great things. Because that's the platform that you want to be able to move your company forward. We had our own same management team, staff, strategies, no layoffs. We moved forward. Where does that bring us today? If you look at the full six years that we've been part of the Fairfax family, we've posted over $1.6 billion of underwriting profit, over $3.6 billion of net income.
Our combined ratio has improved for six years in a row, every year. In 2024, just last year, we had $540 million of underwriting income, which is a record for Allied World in our third record year in a row. And we've more than doubled the size of the company at over $7.2 billion since we were acquired. So a lot of things go into that. I credit our people, who I think are fantastic. And Andy talked about people. The ability to keep the best people certainly is a huge part of the results that I just talked about. That's one thing. We have great professionals at our company. But I'd also say, I could say with great confidence that in a centralized company or a merged company, that level of performance, I don't think would have been possible.
Now, prior to Allied World, I was with a large centralized company for many years, so I could see the differences pretty clearly, and they're stark. The ability to run your business, the ability to carry out your strategy seamlessly, to keep the best people, the lack of bureaucracy, which is a really, really big benefit for all the Fairfax companies, is tremendous, and the last thing I really want to touch on is trust, because I don't believe that you could have a successful decentralized operation without trust, and we trust Fairfax explicitly. We believe they trust us as well, but trust equals transparency, so you could have decentralization. We have a tremendous amount of transparency without having to write thousands of reports. Andy and I, in a one-hour call, will cover what would take me seven hours of reports that I would have had to write.
Transparency is key, and I also think that Fairfax deserves a tremendous amount of credit. It's not easy to run a large decentralized company as successfully as they do, a large global company. It takes dedication, it takes discipline, professionalism, and it takes a very unique skill set to be able to do it effectively, so great credit to Fairfax, and I think all the operating companies benefit tremendously, so I think Brian covered the market well enough, and I'm going to sign off from here, so thank you, everybody.
We've got one more. Andy, have you got Silvy right now? Silvy, you want to add the Canadian perspective? Give Silvy a nice round of applause.
I'm removing that for a different reason. So as you can appreciate, we've all had different journeys. And mine started in 1994. So I just want to take just a few moments to share an employee experience. And that's me. In 1994, I joined Markel. And Markel, as you all know, was the first company Prem bought. And in 1994, Markel was about $60 million in revenue, 60 people. And the share price was $67. And I was not a president 30 years ago. Well, my parents would have been pretty proud if that happened. But I wasn't a president back then. And I joined. I was an accountant, but with a strong entrepreneurial drive. And it was very clear to me when I joined Markel that Prem's philosophy on decentralization really inspired that entrepreneurial spirit in Markel. There were 60 of us.
When I refer to entrepreneurial spirit, I'm thinking you feel like an owner of the company. So you work like an owner of the company. You've got the freedom to take risks, or you have the freedom to challenge the status quo. And then you have a great sense of pride of what you do. And that spirit lived in all 60 people, from the collections manager who collected every dollar like her own to the underwriting head who developed strong relations with the customers. And within that environment, all the employees built the leading transportation insurer of Canada. Now, of course, it didn't happen overnight. But over the years, that's what all the employees did. So flash forward. So I'm still here. 16 years later, I learned a lot at Markel, a lot of freedom, a lot of mistakes, learning along the way.
I was appointed the CEO of Northbridge Financial. Northbridge Financial represented the Canadian insurance operations of Fairfax for separate companies. At that time, I know you're not going to like this, Prem, but at that time, we asked for the unthinkable. That is to bring the four companies together from an operational perspective. We asked for that because we really wanted to compete more effectively in the changing landscape in Canada. Not for layoffs. We didn't have layoffs. We knew that we could leverage the combined talents of the group. We could leverage the diverse portfolios that we had in the various companies so that we could be a stronger force with the broker distribution. Then, obviously, to leverage scale to invest in that company. So that's what we did. The top goal of that beginning was not the obvious.
The obvious was, okay, you're going to make changes. You better make a profit. The top goal was not that. The top goal, having been with Fairfax already 16 years at that time, was to build the culture and the entrepreneurial spirit that I knew creates success in the long term. And so that's what we did. We continuously fostered employee empowerment. And empowerment does not work if it just sits at the top. Yes, presidents have freedom. But the success is when you cascade that empowerment throughout the organization. When people feel that they have the freedom to challenge the status quo, to come up to the President and share an idea. And that's what we've done. And we're not perfect. But we've unleashed a lot of talent. And it's all in the talent of those employees that we have established a very good record.
And now we have a nice shiny silver cup. So with that, thank you for taking the time. And Prem, again, the trust, that trust of doing something that Prem did not like. But we both took, I think, a risk. And it paid off.
Thank you. Give him a nice round of applause. Outstanding, Silvy. Thank you very much. And if you hear our other CEOs, it'd be very similar. But in the interest of time, we're going to move on. And we'll go to Mike number one.
Thank you. My name is Michael Van Dusen. I'm an Anglican deacon. I'm a member of Faith and Climate Action. In our Baptismal Covenant, we say we will respect, sustain, and renew the life of the earth. But we know that the climate is burning. The planet is burning. So I have two questions related to that. One is that I respect very much the long-term perspective that you've taken on everything in your operations. And I would ask if you would consider amending your values to add one more, which would be to say we care for our common home, the earth. And the second question that I have is related to it. And it's related to it in the name of not only us who are here, but our children, our grandchildren, our great-grandchildren, for all the employees, all the shareholders, all the customers of Fairfax.
And that is that the organization would not do new underwritings of extractive industries that are contributing to putting carbon dioxide into the atmosphere. Those are my questions. Thank you for taking them.
So Michael, thank you very much. You seconded the proposal. We've disclosed our view in our proxy circular. But having said that, Michael, I would be happy to meet you sometime in the months to come and discuss it further with you. But we appreciate you coming in and putting your points forward.
Thank you. And I'll take you up on that.
Number two, if you don't mind.
Good morning, Chairman Watsa. First of all, my apologies and my apologies from my family about reading about your three losses that you had in the company. Certainly, it's heavy, and it hit us heavy, and it hits everyone heavy who's a long-term shareholder because, of course, a wonderful business is really only made out of wonderful people. So my apologies. Second of all, I guess, like I said, I'm Justin Hammond from Newfoundland, Canada. I've been a shareholder since following and investing in Fairfax since about 2015. Me and my grandfather were set up Keg. We just finished a Snowball. Then I said, you know, we started going through what was happening with Keg and what was happening with Fairfax. We said, let's start buying shares. So that's what we started doing through our personally and through our operating company, which is drilling contracting.
So I reached out to you in the Christmas of 2024, and you sent me a book. So I sat down, I said, you know what? We should make some changes because I've been making a mistake. We've been cutting a check, and we've been buying Fairfax common shares, but we haven't been sending you a check for the commercial lines company through Northbridge. So we decided to make that change this year. Now, it was with a few trials and tribulations through brokerage companies. For instance, I said, let's reach out to Northbridge through their website, so I did, and they sent me to a preferred broker, which was Gallagher in Halifax. And Gallagher in Halifax and myself had a few exchanges in email, and I said, well, I would like to deal with a broker in Newfoundland, like Northbridge writes commercial lines in Newfoundland.
And first, they said, "Well, no, we don't have an office in Newfoundland. I'm sorry, but I can hook you up with Northbridge or perhaps another company." And I said, "Well, no. I wanted to be set up with Northbridge." So I said, "You know, if you don't have an office, that's fine. I'll just find a broker in Newfoundland." So I said, "I'll just call my own broker." And we've been dealing with this broker for, say, 40 years and 30 years of trackable history with the same company, with the same insurance business through the broker, right? So I said, "Well, I want to get a quote from Northbridge." And first of all, they say, "Well, oh, how come? Why are you requesting Northbridge? You know, the whole nine yards." And so it works out. We get the quote from Northbridge.
We're very satisfied with the original quote that we had from Northbridge. It was better priced, about 10% better priced than what we had anticipated from the competitor insurance company. So we said, this is great. We're going to make the switch. So the broker said, well, you got about two weeks. Just wait for the competitor company to get back to us first and see what they got to say. So they get back to us. It's not a friendly quote from the competitor company because the broker had already told them that we took the policy to market, right? So they had a fit because, I mean, we've only made two claims in 30 or 40 years, none of which you'd lose sleep over. So they undercut the price like a dog. Come in, it was like 28% lower than what we had anticipated them to be.
I sat down. I mean, I should have a Fairfax hat on. I just said, man, is that so? Before we could really react, the broker said, well, I already went back to Northbridge and said, hey, the competitor company, I went back to Northbridge and told them that the original insurance company was not pleased and coming with a much lower price. What are you going to do about it? Then I kind of rolled my eyes. I was like, this is not how we do business. If I'm going to buy a tractor-trailer load of stuff, we're going to get three prices. It's not going to be a very complicated formula on the price versus who we feel most comfortable with to get the lowest stuff. We're not going to go back and forth and say XYZ, XYZ.
I said to my grandfather, you know, when was the last time in 50 years of business you ever made a good long-term partnership by saying, hey, such and such company is doing XYZ. What are you going to do? You know, that's not how it works. So we were not impressed with how that kind of went down. And I'm sorry if there's someone from the broker here that's listening. But it kind of, you know, we said, no, Northbridge got back to us. And they said, you know, we thought that the price that we give you was very fair and friendly. And you know what? We said, we think that the price that they give us was very friendly and very fair too. It was exactly worth what you'd say. So we said, well, what's about to happen? Why is it so low?
Are we about to be just decimated by a soft market? Is there something about maybe we've had, say, decades' worth of insurance policies never really made a claim? Are they just going to jack the prices up on us all of a sudden in a year or two thinking we won't go back to market? You know, we're just going to send me the papers from Northbridge. We've got our decision made. You know, so that was what we did. The end of March, I went around, put in all our liability cards and all of our equipment, and we met up with some commercial friends like that own some companies or whatever, and my grandfather's all excited. He's telling them about, you know, how, oh, you know, we just signed over with a new company, Northbridge; they're an awesome company, XYZ.
You know, we're the kind of shareholders like we left after writing the policy, we went to Montana's owned by Recipe and we had something to eat. Like we're disciplined shareholders out and out of America. We kind of just said, you know, if I had a pocket full of business cards in me right now, I've got all these people that are one or $20 million in revenues that we had to deal with. And I could say, you know what? Like, what's your insurance company? But it kind of makes it difficult when if they have to go through a broker and they've got to see if they offer Northbridge or if they've got to see how, you know, how. The broker is always saying, you can get a quote maybe somewhere cheaper.
It's like, you know, I had to deal with, we had to deal with Fairfax through the broker. Meanwhile, these other companies, I mean, a competitor in Canada has purchased, say, 50 brokerage companies across coast to coast in the last, say, two years or whatever.
Peter here will answer your question. Peter.
That's a great story, actually. A wonderful story. Thank you for supporting Northbridge.
What do you guys think of the direct-to-consumer and the broker loan business? How does that impact the moat moving forward over many years? You know what I mean? Like, it's almost like I got to lose sleep wondering if the brokers at home are going to be snapped up by some business.
That happens in the industry, yeah. But specifically for Northbridge and the trucking business, you can see your example that it's very competitive. But I think what Northbridge brings to the table, and you witnessed, is the customer service. And I think you'll see that going forward. They've been writing trucking business in Canada. They've seen many cycles up and down. They go through brokers. They have great relationships with brokers. And you know, I think your decision, you'll be very happy with in the future.
Yes. Thank you. Thank you very much. I'm enjoying it.
Thank you.
Number three.
Thanks very much, Prem and Peter. Ian Collins from Vancouver. I've been coming to the Fairfax AGM for about 14 years. It gets better every year. Thank you very much. Given the difficult position Canada is in, we find ourselves in, what wisdom and advice would you have for the Canadian people first and for Canadian leadership at this time?
Advice for the Canadian people.
Would that tell the elections that you were talking about, or?
Not so much the elections. Last night, you had a great dinner, and you were talking about your $10 million.
Yeah, the free enterprise.
Yeah.
Yeah. I talked a little about it last night. But the free enterprise system is what developed Canada, a small country to become one of the G7. And in the last 10 years, we've strayed from the principles of free enterprise. And I'm an immigrant to Canada. I came at the age of, you know, 52 years ago. I was 22 years old. I never, as I said yesterday, never bought a stock before, never knew any business. My father was a teacher, principal of a school. And I learned everything in Canada. And the idea is you have to produce before you distribute, right? So you can't give money away until you produce. So we produce. And so we're now giving $80 million away. But we're earning $4 billion. And before that, we were giving much smaller amounts of money. So the free enterprise system is an unbelievable system.
It's one that I subscribe to, and we're going to, in Huron University under Barry Craig, make it the number one free enterprise center across Canada. So thank you. Thank you for that.
Thank you.
Thank you. Can I go on to number four, please?
Hello, Prem. Saurabh Panikar from Bay Area, California. I've been a shareholder for 10 + years now. I really appreciate all the charity work that you have done in personal capacity and via various Fairfax companies across the world and especially in India. My question is regarding various investments that Fairfax has made via various vehicles in India and some of the future investment that are being talked about in the media. I wonder, like, what will be the structure of those investments considering different alliances or, like, investment Fairfax had so far, be it via Thomas Cook, Quess, Fairfax India, maybe Anchorage. Some of these will be listed companies. And they might have different shareholder base than the Fairfax. So how do you think about allocating different investments? Will it be different sectors, attractiveness of the investment?
Yeah. Thank you. Good question. Always we're looking for good people first, not sectors and all. Good people, good track record. When I say good people, honest people with high integrity, track record, and who want to build a company over a long period of time, not wanting to sell it, you know, the five or six years and then sell it. And we've been very fortunate, as you know, in Fairfax India and in Thomas Cook and in Quess, and really good companies, really well built. And we're following the same process as we go forward. Okay. So thank you very much for your question. I'm going to go on to number, oh, that's number four. It's a number five, Jeff.
Prem, the next question is about Poseidon. Fairfax was part of a group that took Atlas private in 2023. It's now called Poseidon. Could you please provide an update on how the company is performing?
More than that, we have David Sokol here, who has, by the way, been fantastic for the last six or seven years, built a tremendous company. We're fortunate beneficiaries from it. Give David a nice round of applause.
Thank you, Prem and Peter. To respond to that question, I brought a couple of facts just because I know a lot of people speaking last night don't know much about Poseidon. Basically, we're a company called Seaspan. The Poseidon name was merely going private, a name we had to come up with. But today, we have 191 major container ships on the water throughout the world, 38 more vessels under construction. So total vessels and construction, about 229 vessels. And they average around $150 million per ship. 2024 was a, I give a couple of statistics just because it was an important step, which is kind of the way this business will grow as we bring more ships online, continue our long-term chartering. It grows in a bit of a step pattern. So for this last year, revenue was up 35% to $2.3 billion.
Net earnings up 58% to $656 million. EBITDA up 48% to $1.8 billion. And the return on equity at 14.3%. Perhaps more importantly, we ended 2024 with gross contracted cash flow, our long-term charters with the major shipping companies. It was a little over $26 billion. And today, that long-term cash flow under contract is about $30.5 billion. And we burn about $2.3 billion a year. So that's really important because the model of the business is to lock up long-term charters with the 10 major shipping companies, 10 to 15-year contracts. And then we design in cooperation with the major companies, the ships. We get them built. We finance them, coterminous with the charters. And so we're really a finance and an operating company. Our customers tell us where they want their ships to go. Our captains take them there.
Our customers pay the fuel and any taxes or emissions costs in various parts of the world. So we control what we can control. They control what they can control. And it's a very good partnership. Year-end last year, we sold APR Energy. Basically came out with a small gain. We're redeploying that capital and calling a couple of preferred stocks and a debt instrument. But that $400 million, you know, we really want to keep the company focused on the opportunities we have in the shipping industry, which are really quite significant. And then for the first quarter, about 15% better than budget so far in the year. Although, as the recent news would identify, the industry is going to have some challenges. Although they really don't affect us, but you know, when they affect your customer, they do affect us. With that, we appreciate the partnership, Prem.
Thank you very much, David. Phenomenal performance. We go on to number one.
Hi, Prem. My name is Omar Malik. I'm an investor based in Dallas. I had a specific question about competition. And so it's been really interesting over the last few years to see how the American-backed private equity firms, private equity players have dominated the life and annuities market, you know, in a relatively short amount of time. And to take a specific example, if you take Apollo Athene, you know, they've taken the 100-200 basis points of illiquidity premium in private credit to effectively underprice the fixed annuity market. And they have an absurd market share now. And so I was curious, and I get that P&C is more volatile, but do you see private equity players making inroads into your areas and specifically into P&C? And how do you think about how that competition might evolve?
And then if so, do you think private credit deserves a larger allocation in insurance portfolios?
Yeah. No, we think the spreads are very narrow. We think private credit, you know, may be risky. And so we don't have any allocation to private credit. And for the life business, maybe there's, you know, you get the spread and you can lock up returns. But anytime lots of money goes into one area, as it is now in private credit all over the world, we worry. And so, you know, it's like lots of money going into the high-tech area. I gave you the example in our annual report. NVIDIA, its net income three years went up seven and a half times, seven and a half times in three years. That's extraordinary, very good. But then it's worth 45 times, price-earnings ratio at 45 x on that high net income. And maybe the net income continues to go up.
But our value investors, we shy away from stuff like that. And right now, we're not taking any credit risk to speak of. It's U.S. governments, it's Canadian governments. And it's very, very, very, you know, we have that expression, caveat emptor, be a buyer beware. But thank you for your question. We'll move on to, yeah, maybe number two, please come close to the mic.
Hi, my name's Wyatt. I am an analyst at an investment firm based in New York. This question is for whoever you think should answer it. I'm just curious about what you're seeing in the Excess and Surplus, the E&S market presently, and then also, I'm curious how you think about this market over the long term, maybe like five to 10 years.
Peter, right up. Peter's early, Peter.
I'll take a start. And maybe I'll pass it on to Brian as well, as he's fully involved in that. But yeah, it's, you know, it's performed very, very well over the last number of years, especially through the hard market. We're a big player in the E&S market, probably in the top five in the U.S. And many of our companies write the business. But it's getting more competitive. You know, everyone's writing the business. As the underwriting margins are there, it attracts competition. And so, you know, we think there's still strong margins in the business. We're writing it. We're getting, you know, we're getting mid- to single-digit price increases. We're keeping up with claims inflation. And I think it still will, you know, will remain profitable for the foreseeable future.
As Peter was saying, it's our business, as you know, being an analyst, it's a cyclical business. Brian Young was saying money comes in when you make a profit. Money comes in. There'll be a soft market sometime. You don't know when, but there will be. And our companies are focused on underwriting profits. So you'll expect them to cut back unless they see the opportunity on the underwriting side. And the E&S market's gone up and down depending on hard market, soft market, right? And so can't make any forecasts, but that's what we've done in the past. Thank you for your question. I'll go on to number three.
Good morning, Prem. And I just want to say thank you for all the board of directors, your CEOs, and your employees. What an incredible team you've built. And happy Ruby anniversary. It's your 40th. And my name is Ruby. So I thought by then in a year, I'm going to ask a question. It's going to be this year. Been a shareholder since November 2005. And it was an interesting first year. But, you know, as Ben said yesterday at the Fairfax India meeting, it's not what happens around us that determines our future. It's the way we react. And as stock prices go down in Fairfax India or Fairfax Africa, reflect on should we be buying more at these times? Because it certainly has blessed me. You've and Fairfax has blessed me and my foundation tremendously. I have two questions.
Number one, I've had two months of doing some due diligence in Latin America. And I've been very fortunate that your CEOs have given me a little bit of their time to talk to me a little bit about these opportunities. Argentina's growing almost as fast as India. And you were right when you saw a change in leadership in 2014. And you said, "this is going to unleash animal spirits." And you were right. And I don't know if I'm right, but I'm looking at some change in leadership in some of the countries you're invested in. And I go, "wow, why isn't Fairfax investing more money in Argentina?" So number one. And would there be an opportunity? I'm a former portfolio manager, semi-retired. And you started Fairfax India at the right time. Would there be an opportunity to do something like that?
Because you've got these great CEOs connected to business owners, providing them with insurance. You got boots on the ground. Wouldn't that be an opportunity? Because I just don't want to buy the Argentinian index in January 2024. I'd like to buy specific companies. Number two, you mentioned how Francis Chou gave you the best advice ever, well, Francis did a great presentation last night about reinsurance and about the incredible opportunities, so as a shareholder of Fairfax, are you grasping those opportunities?
So yes, thank you very much for your question. Reinsurance, of course, that's what we do. We've got reinsurance business and insurance business. And Brian and Carl Overy, they look after that. In terms of Argentina, it's a very good question. We've got an operation there. We've got boots on the ground. And I'm really impressed with the President, Milei. And read a lot about him here. I heard many podcasts. And what he's doing is unbelievable. It's amazing how, because it's not easy to go from socialism to free enterprise capitalism. And he's doing it really well. And we're watching it and looking and seeing how we can, you know, our people are going there and meeting specifically, as you said, we don't buy indices, looking at where we can invest. So thank you for the question. Can I move into the number four? Thank you.
Morning, Prem and Peter. First, I just want to say, Prem, thanks for speaking at the charity dinner last night and talking about free enterprise. A lot of people my age are thinking about it, concerned about it. So I appreciate you raising it. My question is about Henry Singleton. I know you've written about him a lot in the past. I was looking back in your 1997 letter, you referred to him as the Michael Jordan of Fairfax. But another aspect of Teledyne was the incentive structure that really led to the collapse, managers being over-incentivized. So maybe you could just speak on what you learned from Henry and how you applied it to Fairfax.
Yeah, you know, that's a very good question. Henry, I didn't think, I mean, he did a fantastic job over 27 years, but he didn't think that it could continue, unfortunately, and I'm looking at our company continuing for 100 years, long after I'm gone, and I thought the key for that is to have control and family control, but no sale of the stock, so no sale, basically saying to my family that you can't sell the stock, so you're a steward. You're not an owner in that sense. Owner means you can turn around and sell it and make a lot of money, well we can't because we're not going to sell, but so that's very important, and the other is to have the company professionally run. People from, you know, like what you have many a time is family-run businesses.
Like the son or the daughter will run the business. And I don't think that's, and it sometimes works, but we don't want to do that. We want to have it always professionally run from inside. The CEO is always coming from the inside. And that we think is a good way to keep the company going. I mean, you know, like it's difficult to look long term, right? But that's the structure that we're thinking goes forward. Thank you very much. We go into Jeff, again to you, number five.
The next question is about Eurobank. Eurobank had an amazing year in 2024. Can this continue going forward?
Very, very good question. And we have for almost seven, eight, nine, ten years Fokion, who runs Eurobank. He's right here. And I'm going to ask him to answer the question. But I want all of you to give a fantastic round of applause to Fokion.
Thank you, Prem. I will state the obvious, but we live in a very volatile environment. Share prices move up and down every day, and for instance, at the Eurobank, we are about 15% off the 2025 highs in terms of share price, but I think you would agree with me that in the end of the day, it is fundamentals that count. And in the case of Eurobank, fundamentals remain very strong. 2024 was indeed a great year. We had exceptional organic growth, a 10% increase in our loan portfolio, but also exceptional transformative, I would say, M&A activity. Our return on tangible book value was at 18.5%, EPS at EUR 0.39, and we had a record profitability of EUR 1.5 billion. About 50% of that came outside the operations of Greece. So Bulgaria and Cyprus, which together with Greece, are our three core markets, have done very well.
Especially in Cyprus, we are becoming not only the largest banking group, but also the largest insurance group in the country, following the acquisition of Hellenic Bank of Cyprus at a very attractive pricing, 2024 P/E ratio less than four, and also the acquisition of the largest insurance company, which was a subsidiary of CNP, at a price to book of one, so following a really exceptional year, we have increased the payout ratio for shareholders to 50% of 2024 financial results, up from 30% in 2024, and over the next couple of weeks, we're going to pay cash dividend of EUR 0.105 per share, and we are also launching a share buyback program of close to EUR 300 million to be initiated the first week of May.
Now, also the share price performance in 2024 was quite exceptional, 40%, close to 40% up, the highest in the Greek financial sector. Still, the stock, and after the small correction that we have seen during the last few weeks, trades slightly below the 2025 tangible book value that we project. It's in a multiple of about 0.9 of the tangible book value. So going forward, we have presented already the three-year business plan for 2025, 2026, 2027. And we project a return on equity of 15% on a sustainable basis. And through this interest rate cycle, which is at lower interest rates, we operate in an environment in three core markets with a growth rate in terms of GDP between 2% to 3%, which is a multiple of the European average. And we have three main pillars of growth. One is the organic loan growth.
We estimate it at 7.5% per annum over the three-year period. Second is to further enhance the F&C and business asset management and insurance. We project the revenues from this segment to increase by 30% per annum over the same period. And last but not least, we have the merger of our two institutions in Cyprus, Eurobank Cyprus and Hellenic Bank, which is going to release an envelope of synergies of about EUR 120 million over the course of three years. But about 40% of this figure should come in 2025. So this is about our business plan. At the same time, we have a quite ambitious plan to enhance further the technology in the group in terms of upgrading the digital transformation of the group, adopting GenAI use cases, and also upgrading, modernizing our core IT systems.
On that, we have great help, great support from Fairfax Digital Services and the CEO, Sanjay. Sanjay, thank you for all the support. So overall, despite the fact that we live in a very volatile environment, we don't want to underestimate that some of the major economies may enter a stagnation in 2025. In our region, the economies will do well. And despite the fact that interest rates may be lower than initially projected because of weaker economies, we believe that there is a great future for Eurobank in 2025 and that we would be able to deliver what we have promised in our business plan. Thank you.
Thank you very much, Fokion. And by the way, Fokion, the dividends that come to us add up to $200 million, $200 million of dividend from Eurobank. So number one, if you don't mind.
Good morning, Prem and Peter. My name is Jerome. I'm a shareholder since 2016. Back in school, in my program, they used to grade us either satisfactory or unsatisfactory and nothing else. So with your past decisions, Fairfax has gone from 400 to 2,000 in five years, which is a reasonably satisfactory outcome. But as investors, it's always important to be humble and question your processes. So I'm sure there's always room for improvement. So this question is for either of you. Could you share any notable errors in the past few years, not going back to BlackBerry days, of omission or commission that you could share and lessons that you derive from these experiences?
Thank you very much for your question, Jerome. Lots of mistakes, lots of mistakes that we've made. The insurance business is doing really well, as you can see. But in the investment business, lots of mistakes. But here's the deal. John Templeton, 15 years ago, had the best 50-year track record in the world, best 50-year track record with my mentor. And he said to me, you know, Prem, 2/3 of the decisions, only 2/3 are right for him. One-third, he said the decisions were wrong. I bought too early. The company didn't work out. I misjudged the management, whatever. All sorts of problems like that. That's the beauty of the business. And we're not diversified in terms of 100 companies, but we're quite diversified. We'd have, I don't know, 20, 25 names all over the place. So some of them we make a mistake.
In spite of that, in spite of that, you know, in the last four years, we've done well. But that long-term return is what we focused on. He always focused on the long-term return. I remember him right here. He used to have his meeting in Roy Thomson Hall. One year, it was like a really bad return. They'd stand up like here in a line. They'd say, Mr. Templeton, we put all our money with you. Your one-year rates and your two-year returns are very bad, right at the bottom, sir. He'd listen patiently. He said, you know, you're exactly right. The one-year return, I really apologize, is very, very poor. Two-year returns, really, really poor. Five-year returns, not too bad. As you go further, he says, our 30-year returns are among the best in the world.
And that's what we're focusing on, the long-term return. So I'm emphasizing that all that to you, our shareholders, think of it as long-term. Stock prices go up and down. We've got no control over that. And you see in the last few days, right, stocks go up, stocks go down. And you've got to train yourself, as Mr. Ben Graham said, to take your owning a piece of a business. You don't want to sell. You want to take a long-term view. That's what I'd suggest to you. But there's a ton of mistakes we've made in the past. And we'll continue to make them in the future. But when you put them all together, we're hoping that the result will be not bad. So Jerome, thank you very much. And oh my God, can you see who's there? Peter, this is my great-granddaughter coming in before 12 o'clock.
Chloe, give her a nice round of applause. Chloe, I've got Peter here. So if I can't answer, he's going to answer it.
Okay. Hi, Prem. I've been a shareholder for 13 years. My question is.
That's how old she is, 13 years.
My question is, what business advice do you wish that you have received when starting Fairfax?
What businesses?
What business advice did you get when you started?
Oh, when I started Fairfax, it was mainly, you know, my best advice was on following value investing from my boss, which is John Templeton. He said, forget what you learned in business school. You have to read Ben Graham, Value Investing, Security Analysis book, that you'll read when you get a little older. That's a thick book. And I was lucky enough to meet John Templeton. Those two were really, really good, big advice for me. For when I read Ben Graham, it was the road to Damascus. It changed my life. And but I'm so I have a wonderful granddaughter and another four grandkids. Give them a nice round of applause. Thank you, Chloe. And number three, Charles.
Hi, Prem. Charlie from Seattle. First thing I'd like to say is lovely hosting all week. I just want to tell folks that this has become a lovely trip for value investors all over the world. We've got people from Australia, all over the country, North America, Europe coming here. And it's really become the premier event. I get here on Monday. I leave on Friday. I'm up at crack of dawn. I go to bed after midnight every day. And there's so many lovely people and so much meetings and idea sharing that I think it's really, it has to be said, it's because of you and Fairfax. But it's a hell of a week.
Oh, thank you. We have such a wonderful group of people. You're exactly right. We have such a wonderful group.
I have questions on three businesses. Whoever made the Orla investment, really, congratulations. It's worked out really well. I was curious to see your thoughts on gold and where we're going with that, because it could be a very interesting commodity in a world of turmoil. And then I met the folks, I've met them before from AGT. And curious to see how you're thinking about that. And the new folks from Meadow Foods, the CEO and the CFO today, lovely folks with a great business. Maybe you give us a couple of words on those three things.
So yeah, so very quickly on the first one, AGT, but before that on Orla, Pierre Lassonde is a very good Franco-Nevada, created Franco-Nevada, terrific gold investor. And he began Orla with Jason Simpson. And I've got to know them over the years. Fantastic people running a really good company called Orla. As I said last night, I didn't realize we have a convertible. We have some warrants, and we have some shares. The shares are 56 million. I knew that. But I didn't realize once you take the convertible and you take the warrants, it adds up to 100 million shares. And it's a big impact on our company. But terrific company. It's trading at three or four times free cash flow. One of the lowest costs. I mean, the cost of production is like $900 U.S.
One of the lowest cost producers run by a terrific guy. That's what we like, right? And on AGT, there's a terrific entrepreneur. He's here. His name is Murad. Murad began from scratch, I don't know, 20, 25 years ago, and created lentils. Lentils weren't grown in Canada. He began with that. He's gone all over the place. And you know, I think his revenue base, he was telling me, was about $3 billion. Fabulous company. And we're just fortunate. So our thing is all about good people. And we invest with them, right, with a good track record. Murad's got a very good track record. And so we continue to build that and see what the opportunity was. The last one was, oh, Meadow. Meadow is, see this here? I get this from Meadow. Cadbury's Chocolates.
The ingredient for Cadbury chocolates, the one that the sweetener is a dairy product, exclusive in the U.K. They don't use anyone else but Meadow Dairy produces this stuff, and the fellow who runs it is Raj Tugnait. He's here, and it's quite fascinating here. This exclusive, right? Cadbury's in the U.K. uses no one else. Only this company. But Cadbury's is 300 years old in India, and this company has not gone into India. And so the possibility exists that Cadbury's, so happy with them in the U.K., might do something in India. And by the way, there's no name for chocolates in India. It's Cadbury's. Cadbury is chocolate. It's been there for so long, and so we're really excited about it. Really excited about Raj Tugnait. Again, by the way, with Sanjay Tugnait's brother. And he'll tell you the story sometime. But tremendous potential.
They're working on all of that. So thank you very much. A real pleasure to see you, Charles. Thank you for your comments. We want shareholders like Charles. You know, terrific shareholder, forever, always supportive. Number four, please.
My name is Joe. I would like to thank you for putting on this every year and letting us gain some knowledge and meet new people. It's been awesome for me, and I've talked to a few other people. They've taken the time to talk to me this week. My second question is that how do you foster innovation within your existing private companies to create products and services that are unique that will build your footprint?
So all of our companies, you know, Brian was talking about it. We have a collaboration. But we don't force them.
Right.
You know, Fairfax doesn't force them to say, you've got to use this or that. Brian gets all the best intel on AI and other things. And then we allow them to take whatever they want. We say, here, you can do this. You can do this. You can do that. And he's developed all that. And it's just, you know, it's decentralized. It's allowing people to make their own decision. I remember talking to the fellows at Bryte, which is a South African company. And it used to be run by a company in Europe. And they wouldn't even listen to any idea that they had. They said, you know, we're in Europe. We know what's happening. You're going to follow. You're going to do this. And with us, it's a, I mean, South Africa is so different from other countries, right? They come out with ideas.
They, you know, innovate, and we take them to whatever ideas they have. But it's very difficult for these large centralized companies to do that. So thank you very much for your question. One more question, Joe. Okay, go right ahead.
Really quick, and it's for everyone. What memos, similar to Howard Marks, would you recommend to read?
Books, you mean?
Memos. So Howard Marks has memos that come out, you know, once a month or twice a month or something like that.
I read a lot, a lot of things, and you know, I can't, I wouldn't feel good giving you some ideas, and there's a lot of podcasts that are very good. This guy, Lex Fridman, did a podcast on; he did it on Milei, which is well worth watching, and he did it on Mr. Modi, and that's excellent. But the guy who would know a lot about that is my son, Ben, and he'll know a lot about these podcasts, but those are the two that I come across. For me, it's hit and miss, but thank you, Joe, for your question. Number five, Jeff.
Prem, you wanted me to just remind you when it's noon hour. So we're just slightly past noon hour. I do see there's one still at the mic. I'd defer to the last question.
Before that, we have two companies here. And I'll come, and we'll be, yours will be the last question. But before we come to that, we have Sleep Country. We've got a terrific entrepreneur and Stewart Schaefer. And I would love y'all to meet him. And Stewart is right here. Stewart, where were you? Right. Come on and say a few words, Stewart. Give him a nice warm welcome.
Thank you, Prem. First of all, I have to start by saying this is my first Fairfax AGM. And I honestly don't know why I'm here and why you bought us. I'm unbelievably humbled and truly impressed by your leadership team, your shareholders, the tenure of this organization. And I just feel unbelievably humbled and proud. And so does my entire team to be part of this organization. I will also say that we weren't even for sale. And my partner and my mentor for many years, Christine Magee, who I'm sitting next to, a lot of private equity guys came knocking on the door because like many companies, many stocks, our stock was undervalued and underappreciated. And most of them were the wolf of Wall Street, no disrespect to any private equity guys in the room.
And nobody really saw the value that we created over the last 30 years until I met Prem. In fact, I just want to thank a few others before even Prem, because it started with Rino and then Nav and Wade Burton made my life a little nervous for about two hours in a drilling question. And so many others, Bill McFarland and Peter. And anyways, but the big difference was when I started to talk to Prem or to any other member of the Fairfax team. There was a consistency in terms of the questions that they asked, which were very different than any private equity. And you've heard it from everyone today, culture, decentralization, and long-term thinking. We're in the mattress business. A customer comes to us once every eight to 10 years. Talk about LTV.
You have to have the vision to be able to understand what we're doing, what we've done, how we've grown our market share over the years, how we've diversified and transformed our business, and how the value of our business is only starting, and the beautiful part of it is that it's a basic, boring commodity, like an ingredient in a Cadbury bar that everybody uses, and that the opportunities and the possibilities of us growing internationally couldn't be more well preserved and for a trajectory being part of the Fairfax team, so I want to thank you very, very much, Prem.
Thank you very much. Huge opportunity for Stewart, Sleep Country, to build a business. You get 40% market share, 40% market share. Some of the biggest retailers, including Eaton's and a few other big ones from the United States, they've survived and the others haven't. 40% market share in Canada, but of course, the world is his oyster, and over time, he's going to look at other places. One other, Bauer Hockey, Peak Achievement, Ed Kinnaly. Come on, Ed, say a few words, Joe. Give him a nice round of applause.
Thank you, everybody. So we're sitting here with all of these investment-type vehicles. So you're probably asking yourself, why hockey? Why sports? The simple reason is because regardless of what happens in the world, the one consistent theme is people are always going to play sports. And you can look at that as a divider of things. We very much look at it as a way to bring people together. Our business in 2027 will be 100 years old, founded just outside here in Toronto. We have offices across the globe, Europe, United States, where I'm based, a couple here in Canada. Four fundamental principles of what guides us and what drives us and what's been really integral to our business success. First and foremost is product innovation. Okay, you've heard a lot about innovation today. We just received a question on it.
We have a 120,000 sq ft R&D center outside of Montreal. For any of you that are hockey fans, it's the equivalent of the National Hockey League meets Willy Wonka's Chocolate Factory, and there's some really marvelous things going on there. We don't just spend time and money and resources developing product for the best players in the world. We also focus on how we bring new people into the sport, make it more accessible for them. Our First Shift program, by way of example here in conjunction with the NHL and the NHL PA, is an example of that. But we're committed really to making accessibility to the sport of hockey something Prem talks a lot about long-term. That is our long-term vision. Number two, building our brand. Okay, we are not a commodity.
The ability to strengthen our brand and have it be synonymous with the sport of hockey, which besides Canada, you have Finland, Sweden, the Czech Republic, Switzerland, where hockey is the number one most culturally relevant sport. Okay, building a brand, strengthening that brand, and evolving from just being a hockey equipment manufacturer to a hockey brand gives us the license and the opportunity to do things that we might not be able to do otherwise. Number three is managing the marketplace. 2017, when Fairfax first made an investment in our company, the marketplace was a mess. There was a perpetual imbalance of supply and demand, and because of that, nobody was making money. The retailers weren't making money. The manufacturers weren't making money.
Over the last eight years, we have driven deep investments in pulling data and point-of-sale information out of the marketplace to feed our demand and supply planning and our operational go-to-market execution, which has made the overall industry more prosperous for everybody. And it's something we're really, really proud of. We've grown our market share by about 10 points. We've gone from about 40%-50% market share over the last seven and a half years, in large part because we're able to deliver more value to the retail partners that do business with us. The more we can give them, the more we're going to get back and open-to-buy commitments. And the last thing that I'll say is people. We've heard a lot about decentralization and the value of people here.
I'll kind of close on this, which is I spend a lot of time in airplanes and visiting various cities. And invariably, over dinner or drinks, I'll get the question of who's going to win the Stanley Cup? Who's the best team in hockey? You know, is it Winnipeg? Is it Vegas? Is it Colorado? Is it Dallas? Is it Florida? And I have the same response to them every single time, which is the best team at hockey works at Bauer. And I honestly believe that. So I'll close on saying it's been an absolute privilege working with Prem. I remember this Saturday I got the phone call from him about taking a 100% position in a company. And my three words were, sign me up. Peter, it's been a pleasure working with Peter too. He's on, he's a chair of our board, Wade Burton and Joe C.
It's been an incredible experience, not just for me, but for our entire management team. We couldn't be happier. We're entering the second period of our growth right now. And the best is yet to come. So thank you, everybody.
Thank you very much. And our final question. And after that, of course, we'll have some food and some time to chat. Final question.
Thank you very much, Matthew Cullen from Richmond, Virginia. Since I'm the last question, I was just hoping we could spend a minute talking about each of the previous 39 meetings. I'm kidding. But first of all, thank you.
Thank you very much for having us. This is my second time here. I would just say, in addition to meeting all the wonderful people at Fairfax and your partners, I've made some great friendships from this, some of which asked questions today. And you know, I think my wife would say this is the first anniversary of my 39th birthday. But I think that I'm looking forward to 50 as much as 40. So happy birthday, Fairfax. My question, and the two gentlemen that just spoke really kind of drove this home, what I've been really impressed with is kind of the Lollapalooza effects or how things have worked out better than expected with, you know, buying Allied World or the loan platform at Kennedy Wilson or Waterous with, you know, Strathcona and maybe now Greenfire, Orla. Is that something, how do you do it?
Like, is that something you sort of look for when you choose your partners? I know culture is a huge part, but you know, kind of how do you do that to sort of say, this is how we're going to take it to a next level? And kind of a corollary to that would be, I would never ask you to choose among your children or grandchildren, but maybe a couple that would have maybe a growth spurt coming. I'd never say who's your favorite, but thank you very much.
Thank you very much for your question. You know, when you just hear Stewart Schaefer, you hear Ed Kinnaly, you hear our insurance guys, you don't need to be a genius, right? They're passionate about their business. They love their business. They're good people. You just look into their backgrounds and you'll find out they're good people.
We've just been mightily blessed, mightily blessed with a whole bunch of very good people. Some of our, you know, people who join us, you know, Peter is very involved in making sure that they fit the culture of the company. The culture is so strong that if we make a mistake, that person is not going to remain for long. You know, just very, very strong culture. Many years ago, we made the decision that you could be the most brilliant person, but if you don't fit our culture, we don't want you. Very difficult, but that's what we say. You could be the most brilliant person. There are a lot of brilliant people who are perhaps not likable. We'd rather not go with them. It's basically getting people like you see here with terrific track records, passionate about their business.
Ed Kinnaly, for example, what really impressed me was the company was owned by private equity and Nike previously. And he worked there for a long time and Bauer worked there for a long time. Then they were doing a few things that he didn't think was right, mainly in terms of expanding, borrowing money. So he leaves. And three years later, they go bankrupt. And we bought it with Sagard under bankruptcy. But he left for three years. He didn't have another job and they just left. And then we brought him back. And he is passionate, as you just heard about hockey. And he's going to build one fantastic company, already has a 50% market share. And same with Stewart Schaefer. He's just, you know, he's on wheels. He's just going to, he's got 40% market share here in Canada competing.
And then, you know, all sorts of possibilities in the future. So yeah, we look forward to, thank you very much for coming here. You're more than welcome to come every year. And all of you are more than welcome. We recognize that our company is run for shareholders. You all own the company. We try to do the best we can. We do it for the long term. But you own the company. So thank you very much. And we'll meet you at the next one.