Fairfax Financial Holdings Limited (FFH) Earnings Call Transcript & Summary

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, 39. 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 3 of our key leaders passed away. Rick Salsberg, Mr. Athappan and Vinod Loganadhan. In May 2024, with great sadness, we reported that 2 of our key leaders passed away. First with Rick Salsberg, who is our -- who was our [ conciliary ] for 40 years. And I wrote -- and Rick and I wrote the guiding principles for the first 15 years. We work together on every acquisition. Together, you must remember, we began with $10 million in premium, 1985. 15 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 adviser for 40 years. We are 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 22, also in May 2024. He built Fairfax Asia from scratch with acquisitions in Hong Kong, Malaysia, Sri Lanka, Indonesia, 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 were 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 Loganadhan, my brother-in-law and Vice President, Administrative Services, passed away after suffering a cardiac arrest almost 2 years ago. Vinod was my Chief of Staff. He was with me in everything I did for the past 15 years. Our AGM, where 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, 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 would very blessed to have him in my own family. He would 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 the Vinod, we all become -- 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 will 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 Eric Salsberg Memorial Lecture Series at the University of Toronto Faculty of Law, and that will 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 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 3 gentlemen were instrumental in the success of Fairfax. We missed 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 that recently that he said Prem begins with the AGM with his corny jokes, but it relaxes everyone. So anyway, thank you very much for coming. Now we've got 2 winners of the -- 1 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 price is Bijan Khosrowshahi. Bijan joined us in -- 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 -- this is a plaque and that'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 will be kept in our boardroom. So congratulations again, Bijan.

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 [ Can ] company. Over the last 5 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 at Northbridge are the firstever 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. Athappan.

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, there's competition for innovation. It's not one centralized approach. It's all of the companies looking at it, and it's so nice to see. It is now more than 3 years since Russia invaded Ukraine, February '22. As I mentioned last year, our presidents are keeping our people safe, and there are heroes working with extraordinary difficult conditions. And our business is doing exceptionally well. And I particularly wanted to recognize General Dallaire, who is here with us, Canadian General Dallaire and his wife. And [ Andre, Aleski and Sara ] 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 5 years, particularly, this has happened for a long time, our fair and friendly culture has shown 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 Black North initiative. We have a Black Initiative Action Committee at Fairfax under the Chairmanship of Craig Pinnock, the CFO of Northbridge, and 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 it what's amazing, 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's been ups and there's 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, the biggest achievement for the past 39 years. It's tough for us to copy. And it's -- year after year, we have focused on it, and it's now ingrained in our companies. Fair and friendly culture, we say -- and 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 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 has 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, [ Feliz ], 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, cofounded Sleep Country in Canada. Most of you have seen her ads as a prominent player in the sleep products industry and prior to 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 our business experience and entrepreneurship. Christine. Now 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, a few offices 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 that we 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, Peter and I will be talking about a few, there's retirement. Brad Martin, our 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're 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 6 very busy years as our CFO, Jennifer Allen will transition to new executive role with Fairfax as Vice President and Chief Business Officer. Jen has been with Fairfax for 19 years, and she continues. No indication of any retirement in the case of Jen, has done a wonderful job. And if you'll bear with me, we are very happy to announce that Amy Sherk, who has 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, I forget -- 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, Peter Clarke. In October 2024, I'm sorry, we had a few -- quite a few things happened in '24. 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 -- where it's taken them private, and he's going to build the company over the next decades, and 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. And 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. And our hockey, 50% market share, hockey company should be owned by a Canadian company and a wonderful leader, Ed Canale. We want to welcome Ed. And one more investment, which I talked about in the annual report, Berkeley Group, largest independent timeshare company in the United States, now run by Caroline Shin and Wade Burton is intimately involved in this, is really excited about our investment here. And Caroline is here this morning, and let's welcome our Caroline Shin. So this is -- we've got lots of boots. We've got lots of information in 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 did a fantastic -- 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, January, there's a booth here, January 11 to 18th '26, next year, early in 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 recommended, 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 -- we're going to have something for them 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 have done a fantastic job, just a terrific job long before Fairfax India came in. And as I remember being asked by the Prime Minister to provide 1,000 dialysis machines, 1,000, 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, and we have now done 1,400, 1,400 dialysis machines for free, and we are going to 2000. But a big thank you to Madhavan Menon who has been fantastic for us. So you've noticed that tenure, 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 5 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 5 separate successions, all from within the company, not from -- even in our company, we don't go to Odyssey to get someone in come and foster, it's all from within. And it shows a strengthened talent that we have in the group. And for those retiring from their position, the 5, let's -- this here right here, give them a nice round of applause. So I know you know there's -- that's going to be -- once we finish here, we have some food for you, lots of booths that you could look at, some you can even pay some money and do some shopping. And -- but I just wanted to highlight for you, and I've got in the slide, 34 years since we began our donations program. Our annual donations have gone up approximately 550x compound growth rate. We like compound growth rates, 20% per year, for cumulative donations of USD 480 million. One, we donate 2% of pretax, 1% from the company's, 1% to our foundations. This is a wonderful book. You all should -- as 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 is right there, and 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, our 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 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 goodness, 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 3 -- tabling our annual report, followed by 3 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, through the formal business, announced that the minutes of the previous Annual Meeting, April 11 are available for inspection from Fairfax's Corporate Secretary. As well, I formally place the annual report, which is right here, beautiful annual report is right here in front of you for '23, '24, with the auditors signing off. Finally, I declare that the total number of votes attached to the shares represented at the 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 opened to registered holders and appointed proxy holders. The polls are now open on the platform, all registered holders can vote and it will be properly logged. Following the presentation of the motion, Jennifer Allen will confirm for us when the polls have closed. Once the 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.

Sorry, I usually think I'm the last, but -- that's true.

Alphabetical.

Terrific. Thank you. Are there any further nominations? As there are no other nominations for directors have been received, and 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. And 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.

And can I have a seconder?

I second the motion.

Thank you, Jen. So now for those attending in person, I would ask that you please vote for resolutions 1 and 2 by a show of hands. All in favor? Any contrary? Seeing none, the -- 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 M.S. 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 the shareholder resolution requesting financial 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 have 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 LA 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? And 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. And 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. And yet, Fairfax hasn't taken the most basic step that we do see from its peers, which is disclosing financed emissions. And of course, this doesn't need to be perfect. It just really needs to address a disconnect. So on one hand, there is an acknowledgment that climate risk is material. And 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 CEO's 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, 1 of the 3 Ts 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 600x 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. Vanderson ]. 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 recommends 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 proxyholders to complete their electronic voting on all of the motions brought forth at this meeting. Jen Allen will give us 60 seconds, Jen, as this takes place. Thank you. [Voting]

Mr. Chairman, the voting is now complete, and the polls are closed.

Thank you, Jen. I have been advised by the scrutineers 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. As there are a greater number of votes against them than in favor, this motion is not carried, and the shareholder proposal has 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 3, as you will imagine, is our guiding principles. That's the base for our company, the guiding principles. And that basically says that we are long term and we are 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 of which -- I'm just shocked at what the free enterprise system has allowed us to do, and we'll talk a little about it in the Q&A, but it's amazing what can happen, and we never expected it when we began 40 years ago. So it's run for our shareholders with a long-term focus, always want to be soundly financed and complete disclosure to our shareholders in our annual report. Guiding principles structures, 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. And 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, 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 are entrepreneurial, and we have -- we work very hard. We have a few laughs in the office. And yes, 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 got Judaism, you've got the Islam, you 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 they'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 our company to have 25 years, 28 years, all our companies, and I show that to you. Flexibility, ownership, account of -- 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 this transparency. They're going to 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 there's about 26 companies in total, not including Digit, which is not consolidated, and our company in Vietnam, not consolidated. If you had the 2, 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 paid 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 business can be a force for good. What business does. Cumulative donations, I told you. Paid taxes, we paid taxes across the world, $7 billion. Little surprised with that number, $7.1 billion. And we grew 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 a compound rate at 19.2%. There were 6,000 companies listed -- 6,000 companies listed in 1985 in the United States where they bought data, 6,000. And if you look at it in '24, only 600 survived bankruptcy, takeovers, mergers, whatever, 90% didn't make it, only 10% survive, 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 did Fairfax rank? 19.2% ranks us #8. You can see the ones in on the top, Apple and Home Depot and very, very good companies a 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 got to perform. We don't worry about performing in 3 months, 6 months, 9 months. We worry about performing over time, and that's what that shows. And so 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 reserved 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 did not -- we had a whole bunch of 60% plus in 2021, and we look 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, it's $2.5 billion. That's USD 2.5 billion. That's up about 30% from the $1.9 billion. And that $2.5 million, 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 company is 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 we -- to summarize then, interest and dividend income, we use to never make forecast. And now we can say interest and dividend income for the next 3 or 4 years, it's $2.5 billion. We can see that because it's coming from mainly treasuries, mainly government bonds, not -- our corporate bonds might be 1 or 2 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. And our operating income, it's USD 5 billion. I'm looking at that. And you have to remember, we came from a $10 million company and I can't believe I'm saying $5 billion in operating income that we can see in the next few years, but no guarantee that I mentioned to you. If you worked 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. And so you can see what -- our stock price was $3.23 when we began. And here, it's now in U.S. dollars, it's about [ $1,400 ] there, [ $1360, $1390 ], 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 go down, Peter Clarke, on and on and on. And I just wanted to highlight Johnny Varnell now, 38 years. Give him a nice round of applause. Johnny doesn't make any speeches. He just gets things done. And if I want to really know what's happening, I had 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 great culture does, and it's such a big strength for us over all these years. That let you have a look. Silvy Wright, 31 years at Northbridge. This is the investment committee. The 2 guys, Roger Lace and Brian Bradstreet on the left. I've 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 McLean 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. So 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 a 6.7%, 6.7% of 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 $0.5 billion 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 -- this slide is it. This is a total float that we have of 37 billion, which is $1,700 a share. Our book value is about $1,100 a share. It's all the 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 a benefit of the float. In the last 5 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% for the -- 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. So you can see that the whole ton of money working for you. So this is the biggest. The importance of the float. And yes, last night, I said, I'm -- 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 a single biggest thing for us. I can't emphasize that enough for you. Our operations are global, it's 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 4 or 5 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. He started a company from scratch, zero. First guy to be working in the company 7 years ago. Today, it's writing more than $1.2 billion, 4,500 people working at Go Digit, and it just began. 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 1/3 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 3 years. There's any maturity to be finance because things change in the bond market, you can't count on it. Do you think interest rates are lower, it goes up. So we have no maturities for the next 3 years. All our borrowings 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. The 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. 5-year lines. Jen's got 5-year lines, which means that if you don't want -- you'd say, I don't want to be with Fairfax. I want to get out, you still have to stay for 4 years. You can just pull out. So very, very strong. You look at the ratios, very strong. And last slide, before we open it on 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 from -- by all of us here. So thank you for listening, and we'll open it up for your questions.

So this is the time we answer any and every question you've got. There's 1, 2, 3, 4 mics and -- 4 mics are there. Let me just get my thing from here and -- so we'll start from mic 1, [ Yelena ]. Do me a favor, just speak close to the things that we can hear, okay. Thank you.

Okay. I'm [ Paul Durdan ] 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?

So 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, the stock 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 1 share or 2 shares or 5 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 it is. So this is a company that has no stock splits, doesn't do any investment promotion. And so we -- we attract people like you who really look -- read our statement, read out 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. Do you have a follow-up?

I have another question, but I'm willing to go in rotation, if you want to go to another mic.

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 percent interest 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 raised -- 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 is 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 very much. Number 2.

Hi, Prem, [ Sean Lu ] from Portland, Oregon. Thank you for everything you do, 23 years as a shareholder. Really...

Give him a nice round of applause. 22. That's what we like. 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 to Kennedy Wilson.

So 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. And it will be great to hear from Bill in terms of first mortgages and any comments about Kennedy-Wilson. Bill, come right in there. Give Bill, a great partner that we had, a nice warm welcome.

First of all, Prem, I just -- for your 40 years, to congratulate you, I mean, 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, and about 2 years ago now, in the United States, we have a series of banks that failed. We had 3 major banks that failed. And as a result of that, really all the regional banks that were under $50 billion in assets had to run on their deposits. And in the case of the bank that we bought this loan portfolio from, they lost 1/3 of their deposits in 2 weeks. With the advent of the iPhone, you can move your money pretty quickly. And so what happened was that the bank had to sell assets and they had to sell their best assets. And we had a relationship with this bank for over 20 years, and 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, they I don't say for certain, but they had a chance of also being closed by the regulators. So in May of '23, 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. And so we closed on $4.5 billion. And one of the key parts -- so there were 2 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. And one of the conditions of us doing it was that they came to Kennedy Wilson. So 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 were -- 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 of $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 2 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 has gone from $20 trillion to $36 trillion in a very short period of time. And so 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. And so anybody that's in a hard asset business that has an impact. But fundamentally, we're -- we have a great business, 70% of our income relates to housing, housing and credit. And so in the 3 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 3 markets 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. And we've been in Japan now for 30 years. We started the 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 1.5 years 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 has been a fantastic partner, and the $5.5 billion of loans, 7% or 8% interest rates, no risk, 2-, 3-year maturity has been just fantastic. So thank you for your question. Thank you very much. We go into Number 3. Can you come close, please?

Mr. Watsa, my name is [ Akash Danzo ] from the [indiscernible] 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 we 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 was about 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?

Yes. No. Of course, we don't talk about specific companies and sectors. But the valuations are still high, especially in the Magnificent 7 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 will 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 are opportunistic. So we need to get a good price, good people, good companies that we are -- like our Sleep Country, like the ones that I talked about. But otherwise, we just wait and see. Thank you very much, Akash. Give him a nice round of applause. A young man. Number 4?

My name is [ Talani ] from Toronto. First, I just want to thank you, Prem, and the rest of the team for all your hard work. I've been a shareholder for only 4 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 key insurance led by Mark Allan after it spun out of Bryte at the beginning of the year. To me, it seems like the returns at Key might be similar to what Go Digit has delivered under the leadership of Kamesh Goyal over the last 8 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 5 years, including if they foresee requiring additional capital to grow.

Yes. Thank you for your question. This is a good question for Peter. Peter, what do you say?

Well, I'll start with Key and maybe I'll pass it back to -- on Vacatia to you. But no. Key has been a huge success, led by Mark Allan, it was incubated at Bryte and developed at Bryte. It's technology-based. It's built on an algorithm. They work 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 follow -- or there's a leader in the market, and then there's other markets that follow that. And what Bryte and Mark Allan came -- 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 2 functions in that is, one, to take the expenses down, that you don't have teams of underwriters doing it. And two, that if the algorithm is right, you should be able to outperform the market. And today, I think Key is writing almost $1 billion of premium. And 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 Bryte, but at January 1, they're effectively separately, a separate company. And Mark Allan has done a wonderful job. Let's recognize Mark. Thank you, Mark. On -- did you ask about Vacatia too?

I did, yes.

It's time share. And so when you time share that, let's say, about 50% are taken by time share. 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. So you've done it in smaller operations. Now we're doing it in a big scale and a 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 into Number 5 with Jeff.

Prem, the first question's 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 insurance gurus led by Andy Barnard, who is 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?

Yes. You got it.

So of course, we had a fantastic year in 2024, $1.8 billion of underwriting profit. 7 of our companies achieved record underwriting profits during 2024, which we're 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. And I'd like to go back to that slide that Prem 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, it's just a revolving door. And it's not just -- it's not the CEO necessarily, although sometimes, but it is 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 company 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 has had a great run, and I have no doubt they'll continue to be hugely successful in the years ahead. On the market, the market, we've made a lot of money as an insurance business over the last few years, a lot of companies have. And when you do well, more capital tends to flow into the industry. And we've seen that. And there's more appetite for the business today. And so we are seeing more challenging market conditions, but we can still make a profit in this market. We see opportunity for profit. Across our 26 countries -- sorry, it's 26 companies, we have more than 250 profit centers. We're more than 100 countries around the world. We have access to business in so many different areas. And markets move at different pace, different direction. And because we're local, because we have this diverse business, we're able to take advantage of opportunities today. And so 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 my -- 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 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 be a big -- 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 could walk around a little bit. Congratulations, Brian. Great. It'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 time frame. At Allied, we were looking for a transaction, right? We were a midsized public company. We thought getting a bigger, better platform would help us continue our journey, build our company out. We felt that we still have 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. It 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 could 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 in 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 a meeting. I went across the street to the restaurant with John Bender and Wes DuPont, who are sitting up there and a couple of 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 to Fairfax. And we did the transaction. And very quickly, since Fairfax exceeded most of our expectations, the skepticism went away, right? So 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 part of Fairfax if it wasn't for it. And I think the second thing to take away is that I think Fairfax is going to have the #1 slot to talk to companies and acquire companies that still feel that they could do great things, right? Because that's the platform that you want to be able to move your company forward. So we had our own same management team, staff, strategies, no layoffs, right, and we move forward. So where does that bring us today? So if you look at the full 6 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 6 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 and 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 in a merged company, that level of performance I don't think would have been possible. And 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, right? 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 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, right? And we trust Fairfax explicitly. We believe they trust us as well. But trust equals transparency, right? So you could have decentralization. We have a tremendous amount of transparency without having to write thousands of reports, right? Andy and I, in a 1-hour call, will cover what would take me 7 hours of reports that I would have had to write, okay? 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, 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.

Thank you. We've got one more, Andy. We got Silvy Wright 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 '94, I joined Markel. And Markel, as you all know, was the first company Prem bought. And in '94, Markel was about $60 million in revenue, 60 people, okay, and the share price was [ $67 ]. So -- and I was not a president 30 years ago. Well, my parents would have been pretty proud if that happened. But I wasn't the 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. And 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 relationships 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, and I was appointed the CEO of Northbridge Financial. Northbridge Financial represented the Canadian insurance operations of Canada for separate companies. And at that time -- I know you're not going to like this Prem. But at that time, we asked for the unthinkable. And that is to bring the 4 companies together from an operational perspective. And 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. But we knew that we could leverage the combined talents of the group. We can leverage the diverse portfolios that we had in the various companies so that we could be a stronger force with the broker distribution and then obviously to leverage scale to invest in that company. So that's what we did. But 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 empower -- we continuously fostered an employee empowerment. And empowerment does not work if it just sits at the top, right? 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 that 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 Ben 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. Let's give her 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 mic number 1.

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 2 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 is 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.

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 some time in the months to come and discuss it further with you. But we appreciate you coming in and putting your points forward.

I'll take you up on that.

Number 2, [ Philemon ]

Chairman Watsa, first of all, my apologies and my apologies from my family about reading about your 3 losses that you had in the company. Certainly, it's heavy. And it hit also 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, and I've been a shareholder since following and investing in Fairfax since 2015. Me and my grandfather were sad at the Keg and we just finished a snowball. And then I said, 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 why we started doing through were personally and through our operating company, which is drilling contracting. So I reached out you in the Christmas of 2024, and you sent me a book. So I sat down and I said, you know what, we should make some changes because I've been making a mistake. We've been cutting the check and we've been buying Fairfax common shares, but we haven't been -- we haven't been sending you to check for the commercial launch 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 and Halifax. And Gallagher and Halifax and myself had a few interchanges in e-mail. And I said, well, I would like to deal with a broker in Newfoundland, like Northbridge write commercial lines in Newfoundland. And first, they said, "Well, no, we don't have an office in Newfoundland, like I'm sorry, but I can hook you up with Northbridge or perhaps another company. And I said, "Well, no, like I wanted to be set up with Northbridge. So I said, 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 attractable history with the same company, with the same insurance business through the broker, right? So I said that, well, I want to get a quote from Northbridge. And first of all, they say, well, oh, how come, why are your requesting Northbridge, the whole 9 [ yards ]. And so it works out, we get quote from Northbridge, and we're very satisfied with the original quote that we had for Northbridge. It was better price -- 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 2 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 me that we took the policy to America, right? So they had a fit because I mean we've only made 2 claims in 30 or 40 years, none of which you'd lose sleep over. So they undercut the price like a dog, like come in, it was like 28% lower than what we had anticipated them to be. And I sat down and I was -- I mean, I should have a Fairfax hat on. I just said, ma'am, like, is that so. 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 come in with a much lower price. What are you going to do about it? And then I kind of rolled my eyes. I was like, this is not how we do business. Like if I'm going to buy a tractor trailer or stuff, we're going to get 3 prices. It's not going to be a very complicated formula on the price versus who we feel most comfortable with to get to lower stuff. We're not going to go back and forth and say, xyz, xyz. I said to my grandfather, when was the last time in 50 years of business, you ever made a good long-term partnership by saying, "Hey, such and such companies do an xyz, what are you going to do? We're not asking out how it works. So we were not impressed but how that kind of went down, and I'm sorry if there's someone from a broker here that's listening. But that -- it kind of -- we said no like Northbridge got back to us and they said, we thought that the price that we gave you was very fair and friendly. And you know what, we said, we think that's a price that they give us was very friendly and very fair to -- it was exactly worth of what you'd say. So we -- we say, "Well, what's a bit 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 of on us all of a sudden in a year or 2 thinking we won't go back to market. We're just going to just send me the papers from Northbridge, we've got our decision made. So that was what we did. At the end of March, I went around, put in all our liability cards on all of our equipment. And I met up with -- we met up with some commercial friends like that own some main companies or whatever. And my grandfather is all excited. He's telling them about how we just signed over with a new company, Northbridge, they're an as a company, xyz. And we're the kind of shareholders like we left after writing a policy, we went to Montano's owned by Recipe, and we had something to eat like we're disciplined shareholders on North America. So we kind of just say, if I had a pocketful of business cards in me right now, I've got all these people that are $1 million or $20 million in revenues that we had to deal with like I 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 are for Northbridge or if they've got to see how the broker is always saying, you can get a quote maybe somewhere cheaper. So it's like I had the deal -- we had the deal with Fairfax through the broker. Meanwhile, these other companies, I mean, a competitor in Canada has purchased a 50 brokerage companies across Coast to Coast in the last, say, 2 years or whatever.

So Peter here will answer your question, Peter?

Well, that's a great story, actually, a wonderful story, and thank you for supporting Northbridge.

What do you guys think of the direct-to-consumer and the broker line business? How does that impact the moat moving forward over many years? You know what I mean, because almost like I got to lose sleep, wondering if the brokers at home are going to be snapped out by some business.

Well, that happens in the industry. But specifically for Northbridge in the trucking business, you can see your example that it's very competitive. And -- 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 I think your decision, you'd be very happy with in the future.

Number 3.

Prem and Peter, Ian Collins from Vancouver coming to Fairfax AGM for about 14 years, gets better every year. 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 our Canadian leadership at this time?

That plays for the Canadian people, for the enterprise.

Was that on the elections that you were talking about, no?

Not so much the elections. Last night, you had a great dinner and you were talking about your $10 million entrepreneurial...

I talked a little about it last night, but the free enterprise system is what developed Canada, 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 -- 52 years ago, I was about 22 years old. I never -- as I said yesterday, never bought a stock before, I 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 are 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 -- Huron University under Barry Craig, it's going to be the #1 free enterprise center across Canada. So thank you. Thank you for that. Can I go on to #4, please?

[ Saurabh Abhyankar ] from Bay Area, California, I've been shareholder for 10 plus 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 investments that are being talked about in the media. I wonder like what will be the structure of those investment considering different alliances or like investment Fairfax had so far, be it via Thomas Cook, Quess, Fairfax India may be Anchorage. Some of these will be a listed companies, and they might have a different shareholder base than the Fairfax. So how do you think about allocating different investments? Will it be different sectors, attractiveness of the investor?

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 the company over a long period of time, not wanting to sell it. The 5 or 6 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 onto number or that's number #4. It's the #5. 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 6 or 7 years, built a tremendous company. We are a fortunate beneficiary 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 because I know a lot of people from speaking last night, don't know much about Poseidon. Basically, we're a company called Seaspan. The Poseidon name was merely is 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 -- gave 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 our -- 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 co-terminus with the charters. And so we're really a finance and operating company. Our customers tell us where they want the ships to go, our captains take them there and 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, 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 when they affect the customer, they do affect us. With that, we appreciate Prem, the partnership.

Thank you very much, David. Phenomenal performance. We go on to #1.

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 or private equity players have dominated the life and annuities market in a relatively short amount of time. And to take a specific example, if you take Apollo and Athene, they've taken the 100 to 200 basis points of liquidity 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 the P&C is more volatile. But do you see private equity players are 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?

Yes. No, we think the spreads are very narrow. We think private credit may be risky. And so we don't have any allocation to private credit, and for the Life business, maybe there's -- you get the spread and you can lock up the returns. But any time lots of money goes into one area as it is now in private credit all over the world, we worry. And so 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 3 years went up 7.5x, 7.5x in 3 years. That's an extraordinary, very good. But then it's worth 45x, price earnings ratio at 45x 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. government, it's Canadian governments, and it's very, very, very -- we have that expression caveat emptor, buyer beware. But thank you for your question. we'll move on to -- yes, #2, please come close to the mic.

My name is [ Wyatt ]. I am an analyst at an investment firm based in New York. This question is for whoever you think should answer it. 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 5 to 10 years?

Peter, right up, Peter's alley, 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 yes, 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 5 in the U.S. And all of -- many of our companies write the business. But it's getting more competitive. Everyone's writing the business as the underwriting margins are there. It attracts competition. And so we think there's still strong margins in the business. We're writing it. We're getting mid- to single-digit price increases. We're keeping up with claims inflation. And I think it still will remain profitable for the foreseeable future.

As Peter will say 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 will be a soft market sometime. You don't know when, but there will be and our companies are focused on underwriting profit, so you'll expect them to cut back unless they see the opportunity in the underwriting side. And the E&S market has gone up and down depending on hard market, soft market, right? And so I can't make any forecast, but that's what we've done in the past. Thank you for your question. I'll go on to #3.

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 -- if any year, I'm going to ask a question that's going to be this year. Been a shareholder since November 2005. And it was an interesting first year, but 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 and Fairfax blessed has me and my foundation tremendously. I have two questions. Number one, I've had 2 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. It -- Argentina is 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 Chiu ] gave you the best advice ever. While 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. So 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. It's -- 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 are watching it and looking and seeing how we can -- 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 #4?

Morning Prem and Peter. First, I just want to say Prem, thanks for speaking at the charity dinner last night. I've been 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 that I was looking back in your 97 letter, you referred to him as the Michael Jordan of 5x. 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?

Yes. That's a very good question. Henry, I didn't think -- I mean he did a fantastic job over 27 years. What he did, 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 in -- 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. Owners 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 the -- so that's very important. And the other is to have the company professionally run, people from -- like what you have many a time is family-run businesses. Like the son and 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 like it's difficult to look long term, right? But that's the structure that we're thinking going forward. Thank you very much. We're going to Jeff, again, to you, #5.

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 almost 7, 8, 9, 10 years, Fokion, who runs Eurobank, he's right here. And I'm going to ask him to answer the question. But I want to -- 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% of the 2025 highs in terms of share price. But I think you would agree with me that in the end of the day, these fundamentals that count. And in the case of Eurobank, fundamentals remained 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 3 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 ], PE ratio less than 4% and also the acquisition of the largest insurance company, which is -- which was a subsidiary of CNP at a price to book of 1. 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 a 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 in 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 are 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 3-year business plan for 2025, '26, '27. 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 3 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 3 main pillars of growth. One is the organic loan growth. We estimated at 7.5% per annum over the 3-year period. Second is to further enhance the [indiscernible] 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 3 years, but about 40% of these figures should come in 2025. So this is about our business plan. At the same time, we have 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 a 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.

And by the way, Fokion, the dividends that come to us add up to $200 million, $200 million dividend from Eurobank. So number #1, 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 5 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 emission or commission that you could share and lessons that you derived from these experiences?

Thank you very much for your question, Jerome, lots of mistakes, lots of mistakes that we 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. He was my mentor, and he said to me, Prem, 2/3 of the decisions, only 2/3 are right for him. 1/3, these are the decisions were wrong. I bought too early. The company didn't work out. I misjudged the management, whatever, all sorts of problem 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 have, I don't know, 20, 25 names all over the place. So some of them, we may make a mistake. In spite of that, in spite of that, in the last 4 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 and one year, it was like a really bad return. And they stand up like here in a line. And they say, "Mr. Templeton, we put all our money with you and your 1-year rates and your 2-year returns are very bad, right at the bottom, sir." And he listened patiently and he said, you're exactly right. The 1-year return, I really apologize, is very, very poor. The 2-year returns really, really poor. The 5-year returns are not too bad. And as you go further, he says, our 30-year returns are among the best of the world. And that's what we are 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 -- you are owning a piece of a business, you don't want to sell and you want to take a long-term view. That's what I'd suggest to you. But there are 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 results will be not bad. So [ Jerome ], thank you very much. And Oh my God, did you see who is there. Peter, this is my great granddaughter coming in before 12:00. [ Chloe ], give her a nice round of applause. [ Chloe ], I got Peter here so if I can't answer it. He's going to answer it.

Okay. 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?

When I started Fairfax, it was mainly -- my best advice was on following value investing from my boss, which is John Watson 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. When I read Ben Graham it was the Road to Damascus. It changed my life. And -- but I'm -- I have a wonderful granddaughter and another 4 grandkids, give them a nice round of applause. And #3, Charles.

[ 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 crack of dawn, 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.

Thank you. We have such a wonderful group of people. You are exactly right. We have such wonderful people.

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 what -- how you're thinking about that. And the new folks from Meadow as the CEO and the CFO today. Lovely folks with a great business. Maybe you can give us a couple of words on those three things?

So yes. So we -- very quickly on the first one, AGT but before that, on all. 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 at 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, selling at 3x or 4x free cash flow. One of the lowest cost, it's -- I mean the cost of production is like USD 900, 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 has gone all over the place. And I think his revenue base, he was telling me is worth 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 has got a very good track record. And so we continue to build that and see what the opportunity was. The last one was Meadow. See this year, I get this from Meadow, Cadbury's chocolates. The ingredient for Cadbury's chocolates, the one that the sweetener, the 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 is here. And it's quite fascinating here -- is exclusive, right? They don't -- Cadbury's in the U.K. uses no one else, only this company. But Cadbury 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. 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, he is Sanjay Tugnait's brother. And he'll tell you the story sometime. But tremendous potential, and they're working on all of that. But thank you very much. A real pleasure to see you, [ Charles ] and thank you for all your comments. We want shareholders like [ Charles ], a terrific shareholder forever always supportive. #4 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, that's great. 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 -- Brian was talking about it, all -- that we have a collaboration, but we don't force them. Fairfax doesn't force them to say, you got to use this at that. Brian gets all the best intel on AI and other things, and then we allow them to take whatever they want. They say, here, you can do this, you can do this, you can do that. And he's developed all that and it just, it's decentralized. It's allowing people to make their own decisions. 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, "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 -- I mean, South Africa is so different from other countries, right? They come out with ideas. They innovate and we take them to whatever ideas they have. And -- 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.

It's 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 once a month or twice a month or something like that.

I read a lot, a lot of things. And 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, [ Brad ] 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. #5, [ 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 -- that is the last question?

Before that. We have 2 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 got a terrific entrepreneur in Stewart Schaefer. And I would love you all to meet him, and Stewart is right here, Stewart where are 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 Reno and then Nav and Wade Burton made my life a little nervous for about 2 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 heard it from everyone today, culture, decentralization, and long-term thinking. We're in the mattress business. A customer comes to us once every 8 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 well -- 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. Huge opportunity for Stewart, Sleep Country to build a business. They got 40% market share, 40% market share, some of the biggest retailers, including Easton's and few other big ones from the United States. They've survived and the others happened. 40% market share in Canada, but of course, the world is oyster and over time, he's going to look at other places. One other Bauer [ Skates ], Peak Achievement, Ed Kinnaly. Come on Ed, say a few words here. Give him a nice round of applause.

Thank you, everybody, 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, it 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 it 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 120,000 square foot RD&D center outside of Montreal. For any of you that are hockey fans, it's 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 #1 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 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 8 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 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% to 50% market share over the last 7.5 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 and drinks, I'll get the question of who's going to win the Stanley Cup? Who's the best team in hockey? 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 100% position in the company and my three words were "sign me up". Peter, it's been a pleasure working with Peter too. He's the 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. And a final question. And after that, of course, we'll have some food and some time to chat. Final question.

[ Matthew Cohen ] from Richmond, Virginia. Since on the last question, I was just hoping we could spend a minute talking about each of the previous 39 meetings. No, I am kidding. First of all, 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, have made some great friendships from this, some of which asked questions today. And 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 buying Allied World or the loan platform at Kennedy Wilson or Waterous with Strathcona, maybe now Greenfire or 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 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 you have maybe a growth spurt comment. I'd never say who's your favorite? But thank you very much.

Thank you very much for your question. On -- when you -- you just say 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 look into their backgrounds and you'll find out they're good people. And we've just been mightily blessed, mightily blessed with a whole bunch of very good people. And then some of our people who join us, Peter is very involved and 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. Just very, very strong culture. And we -- 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 -- and there are a lot of brilliant people who are perhaps not likable. And we'd rather not do -- grow with them. But 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. Maybe in terms of expanding, borrowing money. So he leaves. And 3 years later, they go bankrupt, and we bought it with the Sagard under bankruptcy. But he left for 3 years, didn't have another job and 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 the 50% market share. And same with Stewart Schaefer, he's on wheels. He's got 40% market share here in Canada competing. And then all sorts of possibilities in the future. So yes, 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. We 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 -- for the next [indiscernible]. Thank you.