The counterparty credit rating on Fairfax Financial Holdings Ltd. (NYSE: FFH) is based on the company's good competitive position, improving earnings, good and improving capitalization, and strong liquidity. Offsetting these positive factors are historically frequent and sizeable reserve charges, the historical utilization of finite reinsurance, high reinsurance recoverables, and remaining weaknesses in the areas of governance and risk controls after some improvement in recent years. The competitive position of FFH's consolidated operating companies, including run-off entities, (collectively Fairfax) is good, based on its diversification globally and by segment (Asia insurance, U.S. commercial property/casualty (P/C), Canadian P/C, global reinsurance, and run-off) and market position. FFH is a globally diversified P/C company, and Standard&Poor's Ratings Services believes this is a
