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The Once and Future C&F - Fair and Friendly
In the 2005 Fairfax annual report, Prem commented: “Over the past few years, many of you have asked me if we made a mistake in acquiring Crum & Forster. I have always said it might be a mistake but it was too soon to tell, as we were only at the end of the third inning in a nine-inning ball game … The long term continues to be our focus.” The third inning sounds just about right! Fairfax stepped up and cleaned up the companies that were causing issues – but here were a few loose ends floating around, and Fairmont Specialty was one of them. Even though Prem is a big believer in decentralization, he thought it would be good to team Fairmont Specialty up with one of the other Fairfax companies. It came as a happy surprise when C&F CEO Nick Antonopoulos (promoted in 2004), invited Fairmont Specialty to become part of Crum & Forster. On January 1, 2006, Fairmont Specialty merged into C&F. Nick planted the second acorn. A fter an outstanding run at Seneca (pound for pound, one of Fairfax’s best insurance company acquisitions), Doug Libby became C&F’s next CEO. In keeping with his background at Seneca, he set about rebuilding the company’s specialty businesses. Right in the middle of his first year on the job, the Great Financial Crisis hit. Fortunately, Fairfax had made “the big short” of the credit markets and netted almost $2 billion when the market crashed in 2008. Fairfax was back in a big way — and looking to make more fair and friendly acquisitions. In early 2011, C&F acquired First Mercury Insurance, a Southfield, Michigan–based underwriter of excess and surplus lines business that had started out as CoverX, an escapee from the Illinois Insurance Exchange.
Doug Libby.
If you imagine that picture of a series of fish being eaten by successively larger fish, First Mercury had itself recently gobbled up a few companies, including Emerald Insurance, Valiant Insurance and American Management Corporation. In 2013, Fairfax acquired American Safety Insurance — another E&S underwriter — and the ongoing business was rolled into C&F. By then, C&F had a variety of often-competing E&S underwriting operations. It was admittedly a bit messy. By this time, Fairmont Specialty had developed its own collection of interesting niche businesses. The Accident & Health team had built up a nice pet health insurance business (starting in 2006) – and by 2013, when
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