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Fairfax ups stake in Odyssey Re

Fairfax Financial, the Canadian parent of Odyssey Re, is to increase its holding in the US reinsurer ...

Fairfax Financial, the Canadian parent of Odyssey Re, is to increase its holding in the US reinsurer to over 80% from approximately 74%.
Fairfax plans to buy privately 4.5 million shares from existing shareholders. The move will enable New York-based Odyssey Re to be "included in Fairfax's US consolidated tax group".
Fairfax has reported a strong growth in profit for the final quarter of 2002 and the full year, despite restructuring charges and reserve strengthening.
Net income for the fourth quarter was C$76m ($50m), up from C$35.4m a year earlier. For the full year the company returned to profit with net income of C$415.7m, after a loss of C$346m a year earlier.
Fairfax's fourth quarter results were hit by reserve strengthening of C$314.3m and restructuring charges of C$99.9m as a result of merging its TIG Insurance Co. and International Insurance Co. subsidiaries and discontinuing TIG's programme business.
In the fourth quarter revenues rose 21% year-on-year to C$2.1bn. For the full year revenues rose 30% to C$8bn.
Fairfax refuted claims by analysts last month that it was under-reserved, saying the researchers' report was "totally wrong" as it only used one methodology for estimating reserves, did not take into account Fairfax's stop-loss reinsurance and did not take account of the "dramatically different payment patterns" in Fairfax's business lines.
Odyssey Re made a net profit of $31.3m in the fourth quarter of 2002, compared with a loss of $6.7m a year earlier. For the full year its profit was $208.2m, up from an $8m loss in 2001.
Gross premiums rose 65% year-on-year to $562.9m in the fourth quarter and 64% to $1.9bn for the full year. Net premiums written were $477.5m and $1.6bn respectively.
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