Strong and geographically diversified business profile. Very strong investment management. Very strong consolidated financial profile. Catastrophe risk can create earnings volatility. Above-average tolerance for market risk. Exposure to the pricing cyclicality of the property/casualty marketplace. Susceptibility to adverse reserve development, especially in its run-off operations. The counterparty credit rating on Fairfax Financial Holdings Ltd. (FFH) is based on the company's strong and geographically diversified business profile, strong investment management, and a strong consolidated financial profile. Partially offsetting these positive factors are the company's exposure to catastrophes, an above average tolerance for market risk, and cyclical industry conditions. FFH's strong and competitive market position is based on its sizable geographic footprint and sector diversification. Its four principal operating units include wholly-owned
