The counterparty credit rating on Fairfax Financial Holdings Ltd. (NYSE: FFH) and its related core entities is based upon the company's good competitive position, improving earnings, good and improving capitalization, and strong liquidity. Reserves, recoverables, and financial leverage have all improved in the last few years and are not viewed as significant negatives to the rating. In contrast to these positive factors are the negative views of qualitative areas of governance, risk controls and enterprise risk management (ERM), which support the negative outlook. Fairfax's competitive position is viewed as good based upon its global diversification and by segment (Asia insurance, U.S. commercial, Canadian property/casualty (P/C), global reinsurance, and runoff) and market share. FFH is a globally diversified P/C company and
