FAIRFAX SELLS SINGAPORE UNIT TO MITSUI SUMITOMO FOR $1.6BN

Canadian re/insurance and investment group Fairfax Financial Holdings has sold First Capital Insurance, Singapore’s largest property/casualty insurer, to Japan’s Mitsui Sumitomo Insurance for $1.6bn in cash. Mitsui Sumitomo is acquiring Fairfax’s 97.7% interest in First Capital , with Fairfax retaining a “meaningful” but unspecified quota-share exposure to First Capital’s portfolio. Under terms of the deal, which was announced in August, Fairfax and Mitsui Sumitomo have entered into a global strategic alliance that includes reinsurance relationships. The sale results in a $900m realised investment gain for Fairfax that translates into a $33 per-share increase in its book value. First Capital chief executive Ramaswamy Athappan will retain that post as well as his position as chairman of Fairfax Asia.