Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2025 |
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| Income Taxes |
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| Schedule of provision for (recovery of) income taxes |
The company’s provision for income taxes for the years ended December 31 were comprised as follows: | | | | | | | 2025 | | 2024 | Current income tax: | | | | | Current year expense(1) | | 1,008.5 | | 1,132.0 | Adjustments to prior years’ income taxes | | (53.9) | | (11.4) | | | 954.6 | | 1,120.6 | Deferred income tax: | | | | | Origination and reversal of temporary differences | | 193.7 | | 291.3 | Adjustments to prior years’ deferred income taxes | | 8.2 | | (36.3) | | | 201.9 | | 255.0 | | | | | | Provision for income taxes | | 1,156.5 | | 1,375.6 |
(1)Includes Pillar Two global minimum taxes of $41.8 in 2025 which primarily related to income earned in Singapore and Bermuda and $93.7 in 2024 which primarily related to income earned in Bermuda.
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| Schedule of earnings before income taxes by jurisdiction |
A significant portion of the company’s earnings before income taxes may be earned or incurred outside of Canada. The statutory income tax rates for jurisdictions outside of Canada generally differ from the Canadian statutory income tax rate, and may be significantly higher or lower. The company’s earnings before income taxes by jurisdiction and the associated provision for income taxes for the years ended December 31 are summarized in the following table: | | | | | | | | | | | | | | | | | | | | | | | 2025 | | 2024 | | | Canada(1) | | U.S.(2) | | U.K.(3) | | Other(4) | | Total | | Canada(1) | | U.S.(2) | | U.K.(3) | | Other(4) | | Total | Earnings before income taxes | | 1,619.7 | | 2,072.4 | | 577.0 | | 2,171.2 | | 6,440.3 | | 1,089.9 | | 2,182.8 | | 662.5 | | 1,703.3 | | 5,638.5 | Provision for income taxes | | 350.6 | | 408.7 | | 58.3 | | 338.9 | | 1,156.5 | | 499.9 | | 454.0 | | 81.2 | | 340.5 | | 1,375.6 | Net earnings | | 1,269.1 | | 1,663.7 | | 518.7 | | 1,832.3 | | 5,283.8 | | 590.0 | | 1,728.8 | | 581.3 | | 1,362.8 | | 4,262.9 |
| (1) | Includes Fairfax India. |
| (2) | Principally comprised of Crum & Forster, Zenith National, Odyssey Group (notwithstanding that Odyssey Group has operations outside of the U.S.), U.S. Run-off and other associated holding company results. |
| (3) | Comprised of Brit, Ki, and Meadow Foods. |
| (4) | Primarily includes companies in India, Asia and Europe (excluding the U.K.), and Allied World, which has operations in multiple jurisdictions, and also includes Gulf Insurance which is based in Kuwait and operates through its subsidiaries throughout the Middle East and North Africa region. |
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| Schedule of reconciliations of the provision for (recovery of) income taxes |
Reconciliations of the provision for income taxes calculated at the Canadian statutory income tax rate to the provision for income taxes at the effective tax rate in the consolidated financial statements for the years ended December 31 are summarized in the following table: | | | | | | | | 2025 | | 2024 | | Canadian statutory income tax rate | | 26.5 | % | 26.5 | % | Provision for income taxes at the Canadian statutory income tax rate | | 1,706.7 | | 1,494.2 | | Non-taxable investment income and losses | | (163.0) | | (88.2) | | Tax rate differential on income and losses outside Canada | | (347.1) | | (140.0) | | Change in unrecorded tax benefit of losses and temporary differences | | (26.9) | | 87.3 | | Change in tax rate for deferred income taxes | | (1.2) | | 49.1 | | Recovery relating to prior years | | (45.7) | | (47.7) | | Foreign exchange effect | | 27.7 | | (23.3) | | Other including permanent differences | | 6.0 | | 44.2 | | Provision for income taxes | | 1,156.5 | | 1,375.6 | |
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| Schedule of income taxes refundable and payable |
Income taxes refundable and payable were as follows: | | | | | | | December 31, | | December 31, | | | 2025 | | 2024 | Income taxes refundable | | 86.9 | | 86.7 | Income taxes payable | | (439.9) | | (432.3) | Net income taxes payable | | (353.0) | | (345.6) |
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| Schedule of changes net income taxes (payable) refundable |
Changes in net income taxes payable during the years ended December 31 were as follows: | | | | | | | 2025 | | 2024 | Balance - January 1 | | (345.6) | | (247.9) | Amounts recorded in the consolidated statements of earnings | | (954.6) | | (1,120.6) | Payments made during the year | | 953.5 | | 1,005.6 | Foreign exchange effect and other | | (6.3) | | 17.3 | Balance - December 31 | | (353.0) | | (345.6) |
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| Schedule of changes in net deferred income tax asset |
Changes in the net deferred income tax asset (liability) during the years ended December 31 were as follows: | | | | | | | | | | | | | | | | | 2025 | | | | | | | Insurance | | | | | | | | | | | Operating | | | | contracts and | | | | | | | | | | | and | | | | reinsurance | | | | | | | | | | | capital | | | | contract | | Intangible | | Tax | | | | | | | losses | | Investments | | assets held | | assets | | credits | | Other | | Total | Balance - January 1 | | 254.1 | | (767.5) | | (476.8) | | (442.8) | | 59.0 | | (15.0) | | (1,389.0) | Amounts recorded in the consolidated statement of earnings | | (19.8) | | (440.6) | | 188.7 | | (9.6) | | (5.5) | | 84.9 | | (201.9) | Amounts recorded in total equity | | 6.3 | | (33.2) | | — | | — | | — | | (22.2) | | (49.1) | Acquisitions of subsidiaries (note 21) | | 15.8 | | — | | — | | (9.7) | | — | | (2.1) | | 4.0 | Divestitures of non-insurance subsidiaries (note 21) | | (8.8) | | 0.1 | | — | | (13.3) | | — | | 43.3 | | 21.3 | Foreign exchange effect and other | | 3.6 | | 52.4 | | 0.5 | | (15.4) | | (0.7) | | (5.3) | | 35.1 | Balance - December 31 | | 251.2 | | (1,188.8) | | (287.6) | | (490.8) | | 52.8 | | 83.6 | | (1,579.6) |
| | | | | | | | | | | | | | | | | 2024 | | | | | | | Insurance | | | | | | | | | | | Operating | | | | contracts and | | | | | | | | | | | and | | | | reinsurance | | | | | | | | | | | capital | | | | contract | | Intangible | | Tax | | | | | | | losses | | Investments | | assets held | | assets | | credits | | Other | | Total | Balance - January 1 | | 313.4 | | (611.8) | | (358.0) | | (308.3) | | 33.6 | | (18.1) | | (949.2) | Amounts recorded in the consolidated statement of earnings | | (59.8) | | (183.7) | | (119.0) | | 36.3 | | 25.5 | | 45.7 | | (255.0) | Amounts recorded in total equity | | 5.8 | | 14.4 | | — | | — | | — | | (27.8) | | (7.6) | Acquisitions of subsidiaries (note 21) | | 10.7 | | 0.1 | | (0.3) | | (186.1) | | (0.3) | | (31.1) | | (207.0) | Foreign exchange effect and other | | (16.0) | | 13.5 | | 0.5 | | 15.3 | | 0.2 | | 16.3 | | 29.8 | Balance - December 31 | | 254.1 | | (767.5) | | (476.8) | | (442.8) | | 59.0 | | (15.0) | | (1,389.0) |
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