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The London Life Insurance Company is a Canadian life insurance company best known for its “Freedom 55” slogan, evocative of saving money to an extent that would allow one to retire at age 55. London Life is a part of Great-West Lifeco subsidiary The Great-West Life Assurance Company, which in turn is controlled by Power Financial Corporation (Great-West Lifeco owns 100% of The Great-West Life Assurance Company; Power Corporation owns 72% of Great-West Lifeco. Great-West Lifeco is the only one of those finance companies that is a member of the TSX Composite Index.)
The company reportedly had assets under management of $40 billion (Canadian funds) as at December 31, 2004, and 1.9 million participating life insurance policies.
Allen Loney is the president and chief executive officer of The Great-West Life Assurance Company.
London Life was founded in London, Ontario in 1874, and remains headquartered there.
Fairfax Financial is a financial holding company based in Toronto, Ontario, which is engaged in property, casualty, and life insurance and reinsurance, investment management, and insurance claims management. The company operates primarily through several subsidiaries, including Odyssey Re, Northbridge Financial, Crum & Forster and Zenith Insurance Company.
Fairfax is led by Chairman and CEO Prem Watsa. Watsa controls nearly half of Fairfax; his value-oriented investing strategies have been compared to those of Warren Buffett.
Fairfax was incorporated as Markel Service of Canada on March 13, 1951 and continued under the Canada Business Corporations Act in 1976. The name was subsequently changed to Markel Financial Holdings Ltd.
In 1984, Prem Watsa left GW Asset Management to found his own asset management firm, Hamblin Watsa Investment Counsel Ltd. together with his former boss from Confed, Tony Hamblin. Tony was the Chief Investment Officer at Confed. The five founding partners were: Tony Hamblin, Prem Watsa, Roger Lace, Brian Bradstreet and Frances Burke.
In 1985, Watsa took control of Markel Financial, a Canadian-based specialist in trucking insurance. The company was controlled by the Virginia-based Markel family. The company was almost bankrupt, but Watsa figured it just needed a capital injection. Watsa hit it off with Steven Markel.
Fairfax Financial Holdings Limited
In May 1987, Watsa re-organized Markel Financial Holdings Limited and renamed it Fairfax Financial Holdings Limited (FAIRFAX: short for “fair, friendly acquisitions”).
From 1985 to the end of 2010, Fairfax Financial had a compound growth rate of approximately 25% in book value per share (per year), it’s about 243 times what Fairfax began with in 1985.
Prem Watsa has served as Chairman and Chief Executive Officer of Fairfax Financial Holdings Limited (formerly Markel Financial Holdings) since 1985 and as Vice President of Hamblin Watsa Investment Counsel since 1985. Mr. Watsa, directly, and indirectly through 1109519 Ontario Limited, The Sixty Two Investment Company Limited and 810679 Ontario Ltd., owns the controlling equity voting interest of Fairfax Financial Holdings Limited(“Fairfax”). He owns roughly 10% of Fairfax, which accounts for 99% of his personal wealth. His 10-for-1 multiple voting shares give him just over 50% ownership.
Subprime mortgage bubble
As early as the 2003, in an annual report issued by the company, chief executive Prem Watsa raised concerns about securitized products and talks about the subprime mortgage crisis and the United States housing bubble.
In an interview in the Globe and Mail in 2007, Mr. Watsa said believed that the global credit squeeze is in its “early days,” and indicated he believed there may be similarities to the Japanese asset price bubble.
As of December 31, 2010, Fairfax had total assets of approximately $31.7 billion, and its revenue for the prior twelve months was approximately $6.2 billion. Since Watsa took over, the company book value per share has compounded by 23% per year, while the common stock price has followed the growth at 19% per year.
On September 23, 2013, Fairfax made an offer to purchase cell phone maker BlackBerry for $4.7 billion or $9.00 a share. BlackBerry announced it had signed a letter of intent but would be open to other offers until November 4, 2013. Fairfax already held 10% of BlackBerry.
Fairfax Financial has over 8,200 employees worldwide (5,000 of them in the United States). There are just 30 employees at head office in Toronto.
Hamblin Watsa Investment Counsel Ltd. (HWIC)
Fairfax’s internal money management firm, Hamblin Watsa, earned 19.9% compounded returns annually, on its stock investments (includes Equity Hedging) between 2000 and 2009. The investment team is led by Brian Bradstreet, Roger Lace, Sam Mitchell and Chandran Ratnaswami. The fixed income/CDS portfolio managers team has only two members, Brian Bradstreet and Enza LaSelva.
The following table shows the time-weighted performance of HWIC vs S&P 500 Index and the BofA Merrill Lynch U.S. Corporate Bond Index.
Courtesy : Wikipedia