Annual Meeting

April 09, 2014

Note: All financial disclosure in this presentation is, unless otherwise noted, in US$

Forward-Looking Statements
Certain statements contained herein may constitute forward-looking statements and are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Such forwardlooking statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Fairfax to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: a reduction in net earnings if our loss reserves are insufficient; underwriting losses on the risks we insure that are higher or lower than expected; the occurrence of catastrophic events with a frequency or severity exceeding our estimates; changes in market variables, including interest rates, foreign exchange rates, equity prices and credit spreads, which could negatively affect our investment portfolio; the cycles of the insurance market and general economic conditions, which can substantially influence our and our competitors' premium rates and capacity to write new business; insufficient reserves for asbestos, environmental and other latent claims; exposure to credit risk in the event our reinsurers fail to make payments to us under our reinsurance arrangements; exposure to credit risk in the event our insureds, insurance producers or reinsurance intermediaries fail to remit premiums that are owed to us or failure by our insureds to reimburse us for deductibles that are paid by us on their behalf; risks associated with implementing our business strategies; the timing of claims payments being sooner or the receipt of reinsurance recoverables being later than anticipated by us; the inability of our subsidiaries to maintain financial or claims paying ability ratings; risks associated with our use of derivative instruments; the failure of our hedging methods to achieve their desired risk management objective; a decrease in the level of demand for insurance or reinsurance products, or increased competition in the insurance industry; the failure of any of the loss limitation methods we employ; the impact of emerging claim and coverage issues; our inability to access cash of our subsidiaries; our inability to obtain required levels of capital on favourable terms, if at all; loss of key employees; our inability to obtain reinsurance coverage in sufficient amounts, at reasonable prices or on terms that adequately protect us; the passage of legislation subjecting our businesses to additional supervision or regulation, including additional tax regulation, in the United States, Canada or other jurisdictions in which we operate; risks associated with government investigations of, and litigation and negative publicity related to, insurance industry practice or any other conduct; risks associated with political and other developments in foreign jurisdictions in which we operate; risks associated with legal or regulatory proceedings; failures or security breaches of our computer and data processing systems; the influence exercisable by our significant shareholder; adverse fluctuations in foreign currency exchange rates; our dependence on independent brokers over whom we exercise little control; an impairment in the carrying value of our goodwill and indefinite-lived intangible assets; our failure to realize deferred income tax assets; and assessments and shared market mechanisms which may adversely affect our U.S. insurance subsidiaries. Additional risks and uncertainties are described in our most recently issued Annual Report which is available at www.fairfax.ca and in our Supplemental and Base Shelf Prospectus (under "Risk Factors") filed with the securities regulatory authorities in Canada, which is available on SEDAR at www.sedar.com. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements.

2

Guiding Principles
Objectives
 We expect to compound our book value per share over the long term by 15% annually by running Fairfax and its subsidiaries for the long term benefit of customers, employees and shareholders – at the expense of short term profits if necessary Our focus is long term growth in book value per share and not quarterly earnings. We plan to grow through internal means as well as through friendly acquisitions  We always want to be soundly financed  We provide complete disclosure annually to our shareholders
3

Guiding Principles
Structure
 Our companies are decentralized and run by the presidents except for performance evaluation, succession planning, acquisitions and financing, which are done by or with Fairfax. Cooperation among companies is encouraged to the benefit of Fairfax in total  Complete and open communication between Fairfax and its subsidiaries is an essential requirement at Fairfax

 Share ownership and large incentives are encouraged across the Group
 Fairfax head office will always be a very small holding company and not an operating company
4

Guiding Principles
Values
 Honesty and integrity are essential in all of our relationships and will never be compromised  We are results-oriented — not political  We are team players — no "egos”. A confrontational style is not appropriate. We value loyalty — to Fairfax and our colleagues  We are hard working but not at the expense of our families  We always look at opportunities but emphasize downside protection and look for ways to minimize loss of capital  We are entrepreneurial. We encourage calculated risk-taking. It is all right to fail but we should learn from our mistakes  We will never bet the company on any project or acquisition  We believe in having fun — at work!

5

Fairfax – 28 Years
Shareholders – Book Value per Share plus Dividends $
28 Year Compound Annual Growth Rate 22%
431 409 240 293 393 407 157

Book Value Cumulative Dividend
167 167 156

148

1.52

11

4

1985

6

8

1989

15

18

19

1993

26

31

39

63

1997

86

112

2001

118

127

2005

143

2009

2013

339

339
6

402

Financial Results
Book Value per Share (1) 2006 2007 2008 2009 2010 2011 2012 2013 $ 150 $ 230 $ 278 $ 369 $ 376 $ 365 $ 378 $ 339

% Change

53% 21% 33% 2% (3%) 4% (10%)
7

(1) Excludes dividends paid

Historic Performance vs Peer Group
Compound Growth in Book Value per Share (5 Years ending 2013) (1)
19.8%

16.5% 15.4% 14.4% 13.9% 12.7% 11.7% 11.2% 10.8% 10.7% 10.2% 9.1% 8.7%

4.0%

(1.2%)

8
(1) Except for S&P 500 and TSX which are compound index return excluding dividends

2008 Change in Book Value per Share
23% 11% 10% 8% 7% 6% 5% 5% 3% 3% 3% 3% 2% (1%) (3%) (3%) (3%) (4%) (5%) (5%) (6%) (7%) (7%) (8%) (8%) (9%) (9%) (12%) (13%) (14%) (14%) (14%) (15%) (16%) (17%) (18%) (18%) (19%) (19%) (19%) (22%) (24%) (31%) (32%) (37%) (37%) (43%) (48%)
SOURCE: Dowling & Partners, IBNR #12 Fairfax and AIG calculated using the same methodology as Dowling & Partners, based on company data (AIG excludes government financing)

(65%) (100%)
9

Historic Performance vs Peer Group
Compound Growth in Book Value per Share (28 Years: since Fairfax’s inception) (1)
21.3%

17.0%

16.3% 14.6% 13.3% 13.1% 10.1%

9.0%

8.1% 5.7%

10
(1) Except for S&P 500 and TSX which are compound index return excluding dividends

Source of Earnings in 2013
($ millions) Underwriting profit – (Combined Ratio of 92.7%) Investment income and other Operating Income Other (1) Realized investment gains Pre-tax income including realized investment gains Unrealized investment losses (mostly from bonds) Hedging losses Pre-tax loss Net Loss 440 382 822 (259) 1,380 1,943 (962) (1,982) (1,001) (565)

11
(1) Includes: Runoff underwriting income, Interest expense and corporate overhead & other

Net Gains on Investments in 2013

Realized Unrealized Gains Gains (Losses) (Losses)
($ millions) ($ millions)

Net Gains (Losses)
($ millions)

Equity and equity related investments Equity hedges Net equity Bonds CPI-linked Derivatives Other

1,324 (1,351) (27) 66

-

(10) 29

121 (631) (510) (995) (127) 39 (1,593)

1,445 (1,982) (537) (929) (127) 29 (1,564)
12

Net Gains on Investments 2010 – 2013

Realized Unrealized Gains Gains (Losses) (Losses)
($ millions) ($ millions)

Net Gains (Losses)
($ millions)

Equity and equity related investments Equity hedges Net equity Bonds CPI-linked Derivatives Other

2,767 (1,344) 1,423 1,622

-

(209) 2,835

(91) (2,166) (2,256) (468) (462) 118 (3,068)

2,676 (3,510) (834) 1,154 (462) (91) (233)
13

Accident Year Combined Ratios
2004-2013
Cumulative Net Premiums Written ($ billions) Northbridge Crum & Forster OdysseyRe Fairfax Asia Cdn 11.0 9.9 21.6 1.3 43.8 Average Combined Ratio

98.4% 101.8% 92.6% 86.7% 96.0%
14

Accident Year Reserve Redundancies
Average Annual Reserve Redundancies 2003-2012
Northbridge Crum & Forster OdysseyRe Fairfax Asia 10.3% 4.6% 11.3% 7.9%

15

Strong Operating Companies’ Capital - 2013

Net Premiums Written
($ millions)

Statutory Surplus
($ millions)

Net Premiums Written/ Statutory Surplus 0.9x 1.1x 1.4x 0.6x 0.4x

Northbridge Crum & Forster Zenith National OdysseyRe Fairfax Asia

1,031 1,233 700 2,377 257

1,172 1,142 516 3,809 610

(1) (1)

16
(1) IFRS total equity

Well Positioned for a Turn in the Cycle
($ millions)
3,000
OdysseyRe Northbridge (Cdn $)
Crum & Forster

2,500

Gross Premiums Written

2,000

1,500

1,000

500

Soft Market
0
1999 2000 2001 2002

Hard Market
2003 2004 2005
17

Importance of Float
Year-End
Operating Companies 1985 2013 $ 12.5 million $ 11.9 billion Total (Including Runoff) $ 12.5 million $ 15.6 billion Per Share $ 3 $ 734

10 year average cost of float: 0.7% (2004 – 2013)
18

Importance of Float
Year-End 2013 ($ millions) Total Float Common Shareholders' Equity Net Liabilities Total Investment Portfolio 15,551 7,187 2,124 24,862 Per Share $ 734 $ 339 $ 100 $ 1,173

Investment Portfolio in 1985

24

$5
19

Pre-Tax Realized and Unrealized Gains
Gains ($ millions) 1985 0.5 Per Share 10¢

2008 2009 2010 2011 2012 2013 Cumulative Gains

2,144 1,981 (3) 691 643 (1,564) $ 10 billion

$ 118 $ 108 $ 34 $ 31 $ (77)
20

Pre-Tax Income – Runoff Operations
($ millions)

2007 2008 2009 2010 2011 2012 2013 Cumulative (2007-2013)

188 393 31 165 351 184 (229) 1,083
21

Acquisitions in 2013
 American Safety – 100% ownership  Hartville – 100% ownership

 Thomas Cook/IKYA/Sterling  Prime/CARA/Keg
22

Investment Performance
Hamblin Watsa Investment Performance
As at December 31, 2013 5 Years 10 Years 15 Years Common stocks (with equity hedging) S&P 500 Taxable bonds Merrill Lynch U.S.corporate (1-10 year) bond index 3.2% 17.9% 11.2% 8.4% 7.6% 7.4% 10.3% 5.0% 13.5% 4.7% 9.9% 5.7%

Notes:

Bonds do not include returns from credit default swaps.

23

Fairfax’s Investment Portfolio 2008 vs 2013
September 30, 2008 (1) $20.4 billion December 31, 2013 (1) $24.9 billion

Government Bonds 47%

Common Stocks 16% (~100% Hedged)

Cash/Short -Term 27%

Municipal Bonds 25%

Gov't Bonds Common Stocks 22% 12% (~100% Hedged) Cash/ShortTerm 31%

Corporate Other Bonds Investments 4% 6%

Corporate Bonds 6%

Other Investments 4%
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(1) Includes holding company cash and marketable securities

Fairfax Focused on the Long Term
Earnings and book value volatile on a quarterly basis

2013 Earnings Book (Loss) per Value per Share Share
At December 31, 2012 First quarter Second quarter Third quarter Fourth quarter n/a $ 7.1 $ (8.6) $ (29.0) $ (1.0) $ 378 $ 373 $ 362 $ 335 $ 339
25

Financial Strength
2012 2013
($ millions) Holding Company Obligations Subsidiary Debt Total Debt Holding Company Cash and Marketable Securities Net Debt 2,378 671 3,049 1,128 1,921 2,491 504 2,995 1,242 1,753

Total Equity & Non-controlling Interests Net Debt/Net Total Capital Total Debt/Total Capital

8,890 17.8% 25.5%

8,461 17.2% 26.1%
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Investments Not Carried at Market Value

Carrying Value
($ millions)

Fair Value
($ millions) 1,815 253 131

Unrealized Gain
($ millions) 382 91 61 109 643

Investments in Associates Thomas Cook India Ridley Eurobank Properties (Rights Offering) Total

1,433 162 70

27

Emerging Markets and Asian Footprint
Gross Premiums Written 399 151 100 73 58 781
1,240 900 533 48 334 3,055 3,836

First Capital Fairfax Brasil Polish Re Pacific Insurance Falcon Insurance (Hong Kong)

Ownership 100% 100% 100% 100% 100%

Fairfax's Share of Gross Premiums Written 399 151 100 73 58 781
322 135 219 20 84 780 1,561
28

ICICI Lombard Alltrust Insurance Gulf Insurance Falcon Insurance (Thailand) Other Reinsurance Total

26% 15% 41% 41% 25%

U.S. Private and Public Debt as % of GDP
400% 380% 360% 340% 320% 300% 280% 260% 240% 220% 200% 180% 160% 140% 120%
Panic Year 1873 Panic Year 1929 1870-2013 avg. = 180.2%

400%
Current total debt = $58.9 trillion Debt/GDP of 180.2% would require total debt of $30.8 trillion

380%
Panic Year 2008

360% 340% 320% 300% 280% 260% 240% 220% 200% 180% 160% 140% 120%

100% 100% 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Source: Hoisington Investment Management

29 30

Total Public and Private Debt as a % of GDP – Major Countries
700% 700%

annual
600%

Japan

600%
U.K.

500%
Eurozone

500%

400%
U.S.

400%

300%

Australia Canada

300%

200%

200%

100% 1979

100%

1983

1987

1991

1995

1999

2003

2007

2011

Source: Hoisington Investment Management

30

Velocity of Money 1900-2013 Equation of Exchange: GDP (nominal) = M*V
2.25 annual
1997 = 2.2

2.25

2.00

1918 = 1.95

2.00
Avg. 1900 to present = 1.71

1.75

1.75
Avg. 1953 to 1983 = 1.74

1.50

1.57

1.50

1.25
1946 = 1.18

1.25

1.00 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Source: Hoisington Investment Management

1.00
31 32

Long-Term Government Bond Yields Historic Panic Years
7%
Japan 1989
Debt Induced Panic Years and Long-Term Government Bond Yields 1. Average low level of interest rates after panic 2.0%

6%
5% 4% 3% 2% 1% 0% 1 2 3 4 5 6 7 8 9
2.

U.S. 2008
3. 4.

Average number of years after panic to lowest level of interest rates
Average level of interest rates 20 years after panic Change from low level of interest rates to 20th year

13.7 years
2.5% 0.5%

U.S. 1929

10 11 12 13 14 15 16 17 18 19 20 21
32

Source: Hoisington Investment Management

Long Term Treasury Rate 1871-2013
14%
Fall of Berlin Wall

14%

12%
Onset of Iron and Bamboo Curtains

12%
10%
Interest rate avg. = 6% Inflation rate avg. = 3.9% Interest rate avg. = 2.9% Inflation rate avg. = 1.0%

10% 8% 6%
avg. = 4.3%

8% 6% 4% 2%

4% 2% 0% 1871 1891
Global market

Restricted market

Global market

0% 1931 1951 1971 1991 2011
33 34

1911

Source: Hoisington Investment Management

Shiller’s Price-Earnings Ratio 1881-2013
50 45 40 35
Sept. 1929 32 Dec. 1999 42

50 45 40 35

30 25
20
Average June 1901 25 Jan. 1966 24

30 25
20
Avg. = 16.4

15 10 5 0 1881 1893 1905 1917 1929 1941 1953
Average at end of recessions = 13.1 Range = 5.3 to 19.3

15 10 5 0

1965

1977

1989

2001

2013
34 35

Source: Hoisington Investment Management

S&P 500 Index and Profit Margins
2,000 1,800 1,600 1,400 10 9

8
7 6

1,200
5 1,000

4
800 600 400 200 Jan 1994
Source: Bloomberg

3 2 1 Jan 1998 Jan 2002
Profit Margin

Jan 2006
Index

Jan 2010

0 Jan 2014
35

Deflation in Japan
3% 10%

2%

5%

1%

0% -5% -1% -10%

-2%

-3%

2002

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Annual Deflation
* Estimate Source: Organization for Economic Cooperation & Development

Annual Inflation

Cumulative
36 37

2013

*

-15%

Cumulative

0%

Annual

7-10 Year US High Yield Debt (Yield To Maturity)
25

20

15

10

5

0
2003
Source: Bloomberg

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013
37

High Tech Speculation
Market Cap.
(US$ Billions)

P/E Ratio

Price to Sales

Social Media
Twitter Netflix Facebook LinkedIn Yelp Yandex Tencent Holdings 39 27 174 24 7 12 150 (loss) 186x 116x 887x (loss) 33x 59x 38x 6x 21x 15x 27x 11x 16x

Other Tech/Web
Groupon Service Now Salesforce.com Netsuite 6 10 38 9 (loss) (loss) (loss) (loss) 2x 22x 9x 21x

Source: Bloomberg

38

Monstrous Real Estate & Construction Bubble in China
  China built 50 Manhattans between 2008 and 2012 China built 20 million housing units in 2012 compared to 2 million in the United States at its peak
 At the end of 2013 China had 60 million units under construction

   

In many Chinese cities, the existing housing stock has been replicated and is empty Home ownership rates in China are estimated to be over 100% versus 65% in the United States Since 2009 the Chinese banks have grown by the equivalent of the entire United States banking system The shadow banking system in China is estimated by BoA to be $4.7 trillion or 51% of Chinese GDP
 Prior to the credit crisis, the U.S. had $4.5 trillion in asset-backed securities (31% of U.S. GDP)

A combination of explosive growth and high interest rates has resulted in a massive carry trade where speculators borrow at low rates across the world and invest in China – when the capital flows reverse, watch out!

39

CPI-Linked Derivative Contracts December 31, 2013
Notional Amount ($ billions) 34 39 6 4 83 Weighted Average Strike Price (CPI) 230 110 244 125

Underlying CPI Index U.S. European Union U.K. France

Dec 31, 2013 CPI 233 117 253 126

($ millions) Total Cost Total Market Value 546 132
40

Fairfax Historic Total Return on Investment Portfolio

20%

10%

0% 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

-10%

Total Return on Portfolio

Average Return on Portfolio 8.9%
41

Superior Long Term Investment Track Record
Return on Average Investments 2004-2013

Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10

4.7% 4.6% 4.5% 4.4% 4.3% 4.2% 4.1% 4.0% 3.8% 3.6%

Average Fairfax
Source: SNL Financial LC; Returns calculated by Fairfax

4.2% 7.4%

42

Ready for the Next Decade Building on Fairfax’s Strengths
 Our guiding principles have remained intact

 Excellent long term performance
 Demonstrated strengths
 Strong operating subsidiaries focused on underwriting profitability and prudent reserving  Conservative investment management providing excellent long term returns

 Well positioned for the future
 Fair and friendly Fairfax culture

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