1168338--2/29/2008--CRUM_&_FORSTER_HOLDINGS

related topics

{loss, insurance, financial}

{financial, litigation, operation}

{product, market, service}

{debt, indebtedness, cash}

{stock, price, operating}

{condition, economic, financial}

{competitive, industry, competition}

{customer, product, revenue}

{tax, income, asset}

{regulation, government, change}

{product, liability, claim}

Reserves for asbestos, environmental and other latent claims may be insufficient. Catastrophic events could cause unanticipated losses and reduce net income. The Company operates in a highly competitive environment, which makes it more difficult to attract and retain business. Results in the property and casualty insurance industry are subject to fluctuations and uncertainty, which may adversely affect management s ability to write policies. If the Company is unable to realize its investment objectives, its net income and financial condition may be adversely affected. Recent credit market events could adversely affect the Company s financial results. The Company may be unable to obtain reinsurance coverage at reasonable prices or on terms that adequately protect it. Certain business practices of the insurance industry have become the subject of investigations by government authorities and other parties and the subject of class action litigation. Securities and Exchange Commission ( SEC ) requests for information may adversely affect the Company. The loss of any of the Company s key producers could have an adverse effect on the Company s ability to generate business. The effects of emerging claim and coverage issues on the Company s business are uncertain. The Company bears credit risk with respect to its reinsurers and certain policyholders, and if one or more of them fails to pay, the Company could experience losses, which would reduce its net income. The Company is a holding company and is dependent on dividends from its insurance subsidiaries to pay its obligations, including interest and principal on its debt securities. The Company s debt securities are effectively subordinate to all of the obligations of the Company s insurance subsidiaries, including all of the Company s liabilities with respect to insurance policies that the Company has written or will write in the future. Control of the Company s corporate actions is retained by Fairfax, which may have interests that are different from the interests of holders of the Company s debt securities. The Company is subject to extensive government regulation, which may limit the rates it can charge or otherwise adversely affect its business. If certain policies with respect to which other insurance companies have assumed liability from Crum Forster have not been effectively novated, the Company could be subject to increased liabilities that are not reflected on the balance sheet, including with respect to asbestos, environmental or other latent exposures.

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1168338--2/29/2008--CRUM_&_FORSTER_HOLDINGS_CORP