stooonks

Understand any stock in simple English
Enter a ticker to learn what the company does and how it makes money.

× 🔎 Explain it

---

Fairfax Financial Holdings Limited

Fairfax collects insurance premiums and invests the money in stocks, bonds, and whole businesses.

Fairfax is an insurance company that behaves a lot like an investment fund. It sells property and casualty insurance — coverage for things like car crashes, fires, floods, and lawsuits — to people and businesses around the world. Customers pay premiums up front. Fairfax then takes that money, called float, and invests it in stocks, bonds, and entire companies before it ever has to pay claims. That gap between collecting premiums and paying claims is the engine of the whole business. Roughly half its revenue comes from insurance premiums, and the rest comes mostly from investment gains and the earnings of businesses it owns outright. It's headquartered in Toronto.

Think of it as a club that collects dues today and only pays out for the occasional broken window, while investing everyone's dues in the meantime. For decades, Fairfax was best known for hedging its stock portfolio heavily, which hurt returns when markets rose but protected it in crashes. Under founder Prem Watsa, often called Canada's Warren Buffett, the company has shifted in recent years to a more fully invested stance, and that change has paid off. It also runs a big side operation: it buys whole non-insurance companies, like restaurant chains and industrial firms, and owns large stakes in others. A notable recent move was its stake in Bengaluru-based travel technology firm MakeMyTrip, plus its longstanding holdings in companies like Kennedy-Wilson and Thomas Cook India.

Investors like Fairfax because insurance float is cheap money, and Watsa has a long record of putting it to work. The company also buys back its own shares when they trade below what management thinks they're worth, which quietly boosts the value of the shares that remain. Profits swing with markets and disasters, so a bad hurricane season or a stock market slump can dent a quarter. But the core idea stays simple: sell protection, invest the cash, and let time do the heavy lifting.

Saved answer · last researched 10 Oct 2026