2009 Agm Slide Presentation

Annual Meeting g April 15, 2009

Note: All financial disclosure in this presentation is, unless otherwise noted, in US$ and, except per share data, in $ millions

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Forward-Looking Forward Looking Statements Certain statements contained herein may constitute forward-looking statements and are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward forward-looking looking 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 income if our loss reserves are insufficient; underwriting losses on the risks our subsidiaries insure that are higher or lower than expected; the occurrence of catastrophic events with a frequency or severity exceeding our estimates; the cycles of the insurance market, market which can substantially influence our and our competitors’ premium rates and capacity to write new business; changes in economic conditions, including interest rates and the securities markets, which could negatively affect our investment portfolio; insufficient reserves for asbestos, environmental and other latent claims; the inability of our subsidiaries to maintain favourable financial or claims-paying ability ratings; an inability to realize our investment objectives; exposure to credit risk in the event e ent our o r subsidiaries’ s bsidiaries’ reinsurers reins rers or insureds ins reds fail to make payments; pa ments a decrease in the level of demand for our subsidiaries’ products, or increased competition; an inability to obtain reinsurance coverage at reasonable prices or on terms that adequately protect our subsidiaries; an inability to obtain required levels of capital; an inability to access cash of our subsidiaries; risks associated with requests for information from government authorities; risks government investigations g of, and class action litigation g related to, associated with current g insurance industry practice; the passage of new legislation; and the failure to realize future income tax assets. Additional risks and uncertainties are described on pages 150 – 153 in our 2008 Annual Report which is available at www.fairfax.ca. For a fuller detailing of issues and risks relating to the company, please see Risk Factors in Fairfax’s most recent Supplemental and Base Shelf Prospectus filed with the securities regulatory authorities in Canada and the United States, which is available on SEDAR and EDGAR. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements.

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Guiding Principles Objectives ƒ 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 O f is i long l term t growth th in i book b k value l per share h and d not quarterly earnings. We plan to grow through internal means as well as through friendly acquisitions ƒ We always want to be soundly financed ƒ We provide complete disclosure annually to our shareholders h h ld 3

Guiding Principles Structure ƒ 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 ƒ C Complete l t and d open communication i ti b between t F Fairfax i f and d it its subsidiaries is an essential requirement at Fairfax p and large g incentives are encouraged g ƒ Share ownership across the Group ƒ Fairfax head office will always be a very small holding company and d nott an operating ti company 4

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

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Financial Results

Book Value per Share Growth in Book Value per Share

2006

2007

2008

$ 150.16 150 16

$ 230.01 230 01

$ 278.28 278 28

53%

21%

Investments per Share

$ 1,076

$ 1,141

Earnings per Share (diluted)

$ 58.38

$ 79.53

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(65%) (100%)

(1%) (3%) (3%) (3%) (4%) (5%) (5%) (6%) (7%) (7%) (8%) (8%) (9%) (9%) (1 12%) (13 3%) (14 4%) (14 4%) (14 4%) (15% %) (16% %) (17% %) (18% %) (18%) (19%) (19%) (19%) (22%) (24%) (31%) (32%) (3 37%) (3 37%) (43%)) (48%)

11% 10% 8% 7% 6% 5% 5% 3% 3% 3% 3% 2 2%

23% %

2008 Change in Book Value per Share

SOURCE: Dowling & Partners, IBNR #12 Fairfax and AIG calculated using the same methodology as Dowling & Partners, based on company data (AIG excludes government financing) 7

U.S. P&C Insurance Companies 5-Year 5 Year BVPS and Share Price 5-Year Compound Annual Growth Rate 2003-2008 BVPS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 (1)

Fairfax (1) Chubb T Travelers l Markel Corp. PartnerRe Loews ACE Ltd. Berkshire Hathaway RenaissanceRe White Mountains Leucadia National IPC Re Hartford XL Capital p AIG

11.2% 11.0% 9 9% 9.9% 9.6% 8.7% 8.2% 8.0% 6.9% 5.5% 3.9% 2.2% 0.4% (5.6%) ((19.8%)) (49.5%)

Share Price 11.5% 8.4% 2 7% 2.7% 3.4% 4.2% 11.4% 5.0% 2.8% 1.0% (10.3%) 5.2% (5.1%) (22.6%) ((45.6%)) (52.7%)

BVPS in U.S. dollars. Share price in Canadian dollars

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Fairfax Long Term Performance Compound Annual Growth Rate to 2008

Book Value Per Share g Ranking Growth Rate

5 Years 1 11.2%

10 Years 4 9.5%

15 Years 1 17.0%

23 Years 1 25.4%

Share Price 5 Years

10 Years

15 Years

23 Years

Ranking Growth Rate

1 11 5% 11.5%

12 (3 2%) (3.2%)

2 13 1% 13.1%

1 23 1% 23.1%

Number of Companies

15

15

12

8

For Fairfax: BVPS in U.S. dollars. Share price in Canadian dollars 9

2008 Subsidiary Financial Results

Combined Ratio

Net Earnings

Return on Avg. Equity

N thb id Northbridge

107 3% 107.3%

46

3 6% 3.6%

Crum & Forster (US GAAP)

114.6%

333

27.1%

OdysseyRe (US GAAP)

101.2%

549

20.5%

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2008 Underwriting Results Crum & Northbridge Forster As Reported Underwriting Loss Combined Ratio Adjustments Foreign Currency Impact Crum & Forster Reinsurance Commutation and Lawsuit Settlement

OdysseyRe

Consolidated

(78.7)

(177.2)

(73.5)

(457.7)

107 3% 107.3%

117 6% 117.6%

103 5% 103.5%

110 1% 110.1%

52.8

-

45.8

99.1

-

109.7

-

109.7

74.3

136.9

242.5

Advent Underwriting Loss

25.0 -

-

-

112 4 112.4

Adjusted Underwriting Profit (Loss)

(0.9)

6.8

109.2

106.0

100.1%

99.3%

94.7%

97.6%

Hurricanes Ike and Gustav Losses

Adjusted Combined Ratio

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Importance of Float – Operating Companies ƒ Unlike money management business (royalty on funds managed), g ), results (g (gains)) accrue to owners ƒ Manage money with a long term perspective ƒ Underwriting profit (loss) = benefit (cost) of float ƒ Float belongs to policy holders but income accrues to shareholders (with 100% or better combined ratios) Underwriting Profit / (Loss)

Average Float

Benefit / (Cost) of Float

Avg. Long Term Canada Treasury Bond Yield

1986

2.5

21.6

11.6%

9.6%

1996

(37)

1,089

(3.4%)

7.6%

2007 2008

281 (458)

8,618 , 8,918

3.3% (5.1%)

4.3% 4.1%

Weighted Avg. Financing Differential Since Inception

2.3% 12

Importance of Float – Operating Companies ƒ Unlike money management business (royalty on funds managed) results (gains) accrue to owners managed), ƒ Manage money with a long term perspective ƒ Underwriting profit (loss) = benefit (cost) of float ƒ Float belongs to policy holders but income accrues to shareholders (with 100% or better combined ratios) Underwriting Profit / (Loss)

Average Float

Benefit / (Cost) of Float

Avg. g Long g Term Canada Treasury Bond Yield

Investment Gains

1986

2.5

21.6

11.6%

9.6%

1

1996

(37)

1,089

(3.4%)

7.6%

91

2007

281

8,618

3.3%

4.3%

2008

(458)

8,918

(5.1%)

4.1%

Weighted Avg. Financing Differential Since Inception

2.3%

976 1,559 $5.3B (cumulative) 13

Investment Performance Hamblin Watsa Investment Performance 5 Years to Dec. 31 '08

10 Years to Dec. 31 '08

15 Years to Dec. 31 '08

Common Stocks with Equity Hedge Common Stocks S&P 500

12.2% 1.5% (2 2%) (2.2%)

19.1% 13.3% (1 4%) (1.4%)

16.1% 12.3% 6 5% 6.5%

Bonds Merrill Lynch U.S. Corporate Index

9.6% 1.6%

9.3% 4.4%

9.4% 5.4%

Source: Notes:

Hamblin Watsa Investment Counsel - Annualized Rate of Return (%). Bonds do not include returns from credit default swaps. 15 year investment performance includes portfolios managed by Hamblin Watsa which were not owned by Fairfax. Past performance is no guarantee of future results.

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Other-Than-Temporary Impairment and Mark-to-Market Mark to Market Losses in 2008

Northbridge

Crum & Forster

OdysseyRe

Consolidated

OTTI

274

197

359

996

MTM

103

87

141

504

Total

377

284

500

1,500

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Subsidiary Growth in Book Value Per Share 2001-2008 Compound Annual Growth Rate Northbridge

19.2%

Crum & Forster (US GAAP)

18.9%

OdysseyRe (US GAAP)

21.2%

ƒ Three excellent companies: ¾ Underwriting culture ¾ Conservative reserving ¾ Total return investing 16

Fairfax - Yesterday and Today 1985

2008

Net Premiums Written

12.2

4,332

Net Earnings

(0.6)

1,474

Investment Portfolio

23.9

18,395

7.6

4,866

Common Shareholders' Equity Per Share

Growth

Book Value

$ 1.52

$ 278.28

183x

Share Price (C$)

$ 3.25

$ 390.00

120x

Investments

$ 4.80

$ 1,140.85

238x

Net Premiums Written

$ 2.44

$ 247.74

102x 17

International Diversification India – ICICI Lombard General Insurance For the Years Ended March 31 In USD millions 2002

2008

Gross Premiums Written

6

894

Combined Ratio

-

105 7% 105.7%

Net Income

(2)

26

Investment Portfolio

23

626

Total Shareholders' Equity

21

264

Customers (millions)

0.0

3.5

Employees

116

5,570

11

340

Offices

2002-2008 2002 2008 Average

105 8% 105.8%

ƒ Cumulative Investment: $88MM ($30MM after March 2008) ƒ Ownership Interest: 26% 18

International Diversification Singapore – First Capital Insurance For the Years Ended December 31 In USD millions 2002

2008

Gross Premiums Written Combined Ratio Net Income

195 65.9% 27

Investment Portfolio Total Shareholders' Equity

10 101.8% (0) 33 32

2002-2008 Average 71.2%

255 130

ƒ Initial Investment: $32MM in 2001, no additional investment ƒ Ownership Interest: 100% 19

International Diversification Hong Kong – Falcon Insurance For the Years Ended December 31 In USD millions 2002 Gross Premiums Written Combined Ratio Net Income Investment Portfolio Total Shareholders' Equity

57 98.5% 2 59 20

2008 28 158.9% (14)

2002-2008 Average 110.2%

88 39

ƒ Cumulative Investment: $40MM ƒ Ownership Interest: 100% 20

International Diversification Jordan – Arab Orient Insurance For the Years Ended December 31 In USD millions 2002

2008

Gross Premiums Written Combined Ratio Net Income

45 79.3% 3

Investment Portfolio Total Shareholders' Equity

9 79.7% 1 6 4

2002-2008 Average 85.6%

25 20

ƒ Initial Investment: $11MM in 2008 ƒ Ownership Interest: 22% 21

International Diversification Dubai – Alliance Insurance For the Years Ended December 31 In USD millions 2002

2008

Gross Premiums Written Combined Ratio Net Income

32 68.4% 12

Investment Portfolio Total Shareholders' Equity

17 74.7% 5 62 18

2002-2008 Average 68.9%

74 65

ƒ Initial Investment: $22MM in 2008 ƒ Ownership Interest: 20% 22

International Diversification Poland – Polish Re For the Years Ended December 31 In USD millions 2002 Gross Premiums Written Combined Ratio Net Income Investment Portfolio Total Shareholders' Equity

37 96.0% 1 52 27

2008 95 106.1% (11)

2002-2008 Average 100.0%

103 39

ƒ Initial Investment: $57MM in 2009 ƒ Ownership Interest: 100% 23

Financial Strength Holdco Cash and Marketable Securities

2003

2004

2005

2006

2007

2008

$410

$567

$559

$767

$972

$1,564

Year End 2003

Year End 2005

Year End 2008

Subsidiary Debt Holdco Obligations Total Debt Holdco Cash and Marketable Securities Net Debt

784 1,587 2,371 410 1,961

933 1,610 2,543 559 1,984

910 1,058 1,968 1,555 , 413

Total Equity & Minority Interests

2,896

3,396

6,352

Net Debt / Net Total Capital

40.4%

36.9%

6.1%

Total Debt / Total Capital

45.0%

42.8%

23.7% 24

The Perfect Storm in the U.S. Economy Subsiding 1) Risk repriced 2) Deleveraging taking place 3) U.S. economy and U.S. stock markets have declined significantly ¾ Pessimism rampant 25

U.S. Stock Valuations Back To Normal Stock Market Capitalization as a Percentage of Nominal GDP Monthly - 1924 to Present 180% 160% 140% 120% 100% 80% 60%

Average = 60.6%

40% 20% 0%

Source: Ned Davis Research Inc. 26

Can the Japanese Experience Be Repeated in the U.S.? Nikkei 225 Index vs. Japanese 10-Year Gov't Bond Yields Monthly - 1986 to Present 40,000

9% 8%

35,000

7% 6% 5%

25,000

4%

20,000

3%

15,000

Nikkei 22 25 Index

10-Year Bo ond Yield

30,000

2% 10,000

1% 0% 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Bond Yields

5,000

Nikkei 225

27

Stock Market Crash of 1929 Dow Jones Industrial Average vs. Long Term U.S. Treasury Yields 1925 to 1939 5%

400

4%

300 250

3%

200 00 150

2%

100

Dow Jones Ind D dustrial Averag ge

Long Term U.S L S. Treasury Yie eld

350

50 1% 1925

0 1927

1929

1931

1933

1935

Long Term U.S. Treasury Yield

1937

1939

DJIA

Source: Bloomberg and Hoisington Investment Management 28

Long Term U.S. Treasury Rate 1872 2008 1872-2008 14% Fall of Berlin Wall

12% Onset of Iron and Bamboo Curtains

10% 8% 6% 4%

Average = 4.24%

2% Global market

0% 1872

1889

1906

1923

Global market

Restricted market

1940

1957

1974

1991

2008

Source: Hoisington Investment Management 29

High Yield Spreads 1-10 Year High Yield Spreads 2,000

Spre ead (bps) overr U.S. Treasurries

1,800 1,600 , 1,400 1,200 1,000 800 600 400 200 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Merrill Lynch 30

Investment Grade Spreads 1-10 Year Investment Grade Spreads 800

Spre ead (bps) overr U.S. Treasuriies

700 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Merrill Lynch 31

Fairfax’s Fairfax s CDS Portfolio 3,000

20.0 18.0

2,500

16.0 14.0

2,000

12.0 1,500

10.0 8.0

1,000

6.0 4.0

500

2.0 0

00 0.0 31-Dec-04

31-Dec-05

Notional Amount of CDS Portfolio

31-Dec-06 Market Value

31-Dec-07

31-Dec-08

Realized Proceeds

Cost

Notional A Amount of CD DS Portfolio ($ $ billions)

Cumulative Cos C st, Cumulative G Gains on Sale and a Cumulative e Market Valu ue Including Sa ales Proceeds ($ millions)

Results of Fairfax's CDS Portfolio Since Inception

U.S. Real Housing Price Index 1890 2008 1890-2008 220 200 32% decrease

180 160 140

1894 123.9

1979 122.1

120 100

1989 124.2

Average = 101.2

80 60 1890 1899 1908 1917 1926 1935 1944 1953 1962 1971 1980 1989 1998 2007 Source: Hoisington Investment Management and Robert Shiller, Yale University 33

Fairfax Investment Portfolio Positioned For Income & Capital Gains 2007 21%

2008 32%

50%

16%

1%

20%

Corporate Bonds Total Fixed Income Yield

4% 55% 4.2%

7% 43% 6.9%

Common Stocks

17%

Cash and Short Term Government Bonds Municipal Bonds

Other Investments Total Total Investment Portfolio (1) Pre-tax equivalent yield (2) Approximately 85% hedged (3) Includes holding company cash and marketable securities

(3)

(2)

(1)

22%

7% 100%

3% 100%

$19.1B

$20.0B

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Capital Erosion Has Preceded Several Past Cycle Turns '69

'73

'74

'00

'01

'02

'08P

0%

U.S. U S P&C Surplus

-10% 0%

GAAP

S&P 500 -20%

-30% Cumulative real premium growth i three in th following f ll i years

16%

31%

30%

-40% Sources: Swiss Re, Thomson Financial, A.M. Best, Towers Perrin, Swiss Re Economic Research & Consulting

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Well Positioned for a Turn in the Cycle 3,000

Northbridge (C$) Odyssey Re Crum & Forster

Gross Premiu G ums Written

2,500

2,000

1 500 1,500

1,000

500

Hard Market

Soft Market 0 1999

2000

2001

2002

2003

2004

2005 36

Fairfax’s Strengths Demonstrated Over 23 Years 1. Operations – Disciplined operating management focused on underwriting profitability and prudent reserving ¾ P&C Insurance Operations • Canada – leading commercial insurance operation • United States – large commercial operation across the country • Asia – Hong Kong, Singapore, Thailand and largest private operation in India • Middle East – Dubai and Jordan • Eastern Europe p – Poland ¾ P&C Reinsurance Operations • Worldwide – Top p 5 broker reinsurer in the U.S.,, top p 20 in the world 37

Fairfax’s Strengths Demonstrated Over 23 Years 2. Investments – Long term, value-oriented philosophy ¾ Worldwide • Stocks • Bonds • Distressed debt • Wherever Wh “value” “ l ” prevails il ¾ Many large successful investments like Zenith, Russel Metals Metals, Hub Hub, etc etc.

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Ready for the Next Decade Building on Fairfax’s Fairfax s Strengths ƒ Our guiding principles have remained intact ƒ Excellent long term performance ƒ Demonstrated strengths ¾ Strong operating subsidiaries focused on underwriting profitability and prudent reserving ¾ Conservative investment management providing excellent long term returns ƒ Well positioned for the future

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