The counterparty credit rating on Fairfax Financial Holdings Ltd. (FFH) is based on the company's good competitive position, substantially improved earnings in 2007, strong liquidity, and very strong investment team. Offsetting these positive factors are the historical utilization of finite reinsurance, high reinsurance recoverables (although decreasing), and lack of a strong earnings track record in a softening market. The competitive position of FFH's consolidated operating companies, including runoff 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 runoff) and market position. FFH is a globally diversified P/C company, and Standard&Poor's Ratings Services believes this is a strength to the rating. Crum&Forster
