(Reuters) -Canadian insurer Fairfax Financial Holdings (OTC:FRFHF) on Thursday beat estimates for fourth-quarter profit, helped by higher gains from investments.
Firming bets that central banks will cut rates this year are fuelling a stock market rally, which has driven strong gains on investments for companies with substantial exposure to equities.
Fairfax's equity exposure drove net gains from investments to $2.13 billion in the fourth quarter, up from $1.09 billion last year.
The earnings beat comes just a week after Muddy Waters (NYSE:WAT) said it had taken a short position in Fairfax, citing manipulation in its asset values.
Fairfax has rejected the short seller's report, calling it "false and misleading."
Net insurance revenue was up at $5.68 billion from $5.31 billion in the year-ago period.
The Toronto-based insurance company posted a consolidated combined ratio of 89.9% in its property and casualty insurance and reinsurance segment, compared with 90.9% a year earlier.
A ratio below 100 means that the insurer earned more in premiums than it paid out in claims for the period.
Net earnings were $1.67 billion, or $52.87 per share, for the three months ended Dec. 31. Analysts on average expected a profit of $52.15 per share, as per LSEG estimates.