Fairfax Financial (FFH) shed 8% on the back of its Q1 earnings, which were down materially versus last year driven by some mark-to-market investment losses…

… and a smaller reserve release, with management calling out Q4 as the main period of actuarial reserve review.

While the main swing factors in Q1 look temporary, the underwriting environment could have some staying power - with slow-to-no growth in North America…

… being carried by double-digit growth in international, which historically has been a less profitable line of business for the company…

… with management expecting underwriting economics to improve as the segment matures, supporting ROE and keeping a floor on the book value multiple.